Hong Kong Stocks Rise as Oil Stocks Soar; Hang Seng Index is up 1.3% at 19127
Author: Fong, Dominique
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Feb 2016: n/a.
Abstract:
Oil stocks lifted the Hang Seng Index, up 1.3% at 19127, with Sinopec (0386.HK) leading in a 4.8% surge.
Full text: 0544 GMT [Dow Jones] Hong Kong stocks rise midday Friday on energy share gains. Oil stocks lifted the Hang Seng Index, up 1.3% at 19127, with Sinopec (0386.HK) leading in a 4.8% surge. Cnooc (0883.HK) is up 3.8% and PetroChina (0857.HK) is up 3.2% as Brent crude hovers at about $35 a barrel. "We think pricing is going to remain very stable in the foreseeable future for this year and first half of 2017," says Marquette Chester, managing director at private equity firm WL Ross & Co. LLC. Still, oil prices are at multi-year lows, which have strained balance sheets of some energy firms. As they seek financing, they will start to spin off non-core assets, he says. "We think that the current prices are going to force some companies to divest some of their assets," he says. Write to Dominique Fong at Dominique.Fong@wsj.com Credit: By Dominique Fong
Subject: Petroleum industry
Location: Hong Kong
Company / organization: Name: W L Ross & Co; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768057829
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768057829?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Price To Leave Mark at Berkshire
Author: Das, Anupreeta
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Feb 2016: C.1.
Abstract:
Mr. Buffett had long argued that Berkshire's book value -- a measure of assets minus liabilities -- was a better gauge of his company's performance than any other yardstick. The conglomerate disclosed last week it recently bought roughly $400 million worth of shares in Kinder Morgan Inc., taking advantage of the steep slide in the energy infrastructure giant's stock price.
Full text: Berkshire Hathaway Inc.'s annual results Saturday will give investors a closer look at how Warren Buffett is coping with what could be the market's biggest problem: oil. Cheaper oil is a bright spot for many of Berkshire's manufacturing and industrial businesses. But it is a growing problem for key holdings including BNSF Railway Co., which makes a lot of money hauling oil and other commodities and accounted for about a fifth of Berkshire's profit in 2014. A less obvious casualty has been auto insurer Geico, another high-profile Berkshire business. Cheap gasoline and improved employment prospects are putting more drivers on the road, leading to more traffic accidents. For Geico and its rivals, that has meant paying out more claims. Those factors, along with poor performance by investments in companies like American Express Co., Wal-Mart Stores Inc. and International Business Machines Corp., weighed on Berkshire's shares. They fell 12% last year, while the S&P 500 index was down less than 1%. "Berkshire had a bit of a rough year in 2015," said Nomura analyst Clifford Gallant. "We learned that the company has more exposure to oil than we previously understood, from the revenue impacts on BNSF and some of the manufacturing businesses to loss trends at Geico." The price of oil is one of several topics investors expect Mr. Buffett to address in his latest letter to shareholders, a yearly tradition that accompanies release of the conglomerate's year-end results. Also anticipated: a discussion of Berkshire's acquisition strategy, including its partnership with 3G Capital Partners LP, and an update on Berkshire's April 30 annual meeting, which will be streamed online for the first time. Analysts expect Berkshire to report growth in book value that outperformed the S&P 500, which was essentially flat when dividends are factored in. Mr. Buffett had long argued that Berkshire's book value -- a measure of assets minus liabilities -- was a better gauge of his company's performance than any other yardstick. The billionaire investor used to set himself the goal of beating the S&P on a five-year rolling basis, although he has acknowledged it has gotten harder as Berkshire has gotten bigger. Last year, Mr. Buffett said for the first time that Berkshire's long-term stock price had become a better indicator of the company's performance than book value. A long-term investor, Mr. Buffett isn't likely to make much of last year's drop. In January, Berkshire closed its $32 billion acquisition of Precision Castparts Corp. Mr. Buffett swooped in to buy the Portland, Ore., company in August as investors dumped the stock because of Precision's exposure to the oil and gas industry. The company makes aircraft equipment, but had targeted the oil and gas sector as a growth market, only to be hurt when customers cut back operations. Precision's uncertain near-term outlook gave Mr. Buffett the opportunity to offer a lower premium than some analysts had forecast at the time. The company's stock pickers aren't shying away from oil companies, either. The conglomerate disclosed last week it recently bought roughly $400 million worth of shares in Kinder Morgan Inc., taking advantage of the steep slide in the energy infrastructure giant's stock price. Berkshire also has steadily acquired shares of oil refiner Phillips 66 and owns 14% of the company. "They appear to be making a long-term investment in the idea that demand for oil products will remain strong," said Nomura's Mr. Gallant. Precision's oil-related troubles won't hurt Berkshire's 2015 results, since it will be a new addition. Some analysts expect the deal to add significantly to book value growth in 2016. That is less true of BNSF. One of North America's biggest freight carriers, BNSF transports products including coal, grain, crude oil, metals and waste, as well as sand and gravel used by shale drillers. With oil futures now trading around $33 a barrel in New York, down 70% from mid-2014, and other commodities also suffering, growth in shipments has stalled. Drilling activity has fallen off in major U.S. shale-gas producing regions, and coal producers are hurting, because cheap natural gas has utilities switching fuels. BNSF is able to offset these effects partially because it too benefits from lower fuel expenses. Analysts say these trends, which are hurting all major railroads, will continue to squeeze BNSF's revenue. Barclays PLC analyst Jay Gelb said he expects the slowdown in rail traffic to weigh on BNSF and Berkshire going into next year. As of Dec. 26, BNSF's carload volume was down more than 5% for the fourth quarter to date and flat for all of 2015, according to data from the railroad. Last month, BNSF said it would cut capital spending for the first time in several years. It expects to spend $4.3 billion this year, down from $5.8 billion in 2015. --- Erik Holm contributed to this article. Credit: By Anupreeta Das
Subject: Acquisitions & mergers; Crude oil; Company reports
People: Buffett, Warren
Company / organization: Name: Precision Castparts Corp; NAICS: 336412, 331511, 331512; Name: BNSF Railway Co; NAICS: 482111; Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Feb 26, 2 016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768095474
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768095474?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Financial Sector Helps Lift Stocks --- Oil price rises 2.9%, propping up shares of energy companies; Shanghai tumbles
Author: Kuriloff, Aaron
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Feb 2016: C.4.
Abstract:
U.S. crude-oil prices rose 2.9% to $33.07 a barrel, and energy stocks in the S&P 500 erased earlier declines after Venezuela's oil minister said in a televised interview that the country would meet with Russia, Saudi Arabia and Qatar about efforts to stabilize oil markets.
Full text: U.S. stocks rose for a second consecutive day, drifting higher as oil prices rebounded from early losses. Energy shares eked out a gain and financial stocks led the S&P 500 after the oil rally, amid persistent concerns about the impact of low crude prices on energy companies and the banks that lent to them. Still, many investors said they were cautious after large stock-market swings earlier this month. The S&P 500 is up 0.6% so far in February, including a 6.7% gain from this year's low on Feb. 11. "Volume is depressed here, muted even, on this move today," said Michael Antonelli, equity sales trader at Robert W. Baird. "It's not like we're seeing a surge of activity." U.S. stock-trading volumes were the fourth-lowest this year, continuing a string of days below the 2016 average. The Dow Jones Industrial Average rose 212.30 points, or 1.3%, to 16697.29. The S&P 500 gained 21.90 points, or 1.1%, to 1951.70 and the Nasdaq Composite rose 39.60 points, or 0.9%, to 4582.20. U.S. crude-oil prices rose 2.9% to $33.07 a barrel, and energy stocks in the S&P 500 erased earlier declines after Venezuela's oil minister said in a televised interview that the country would meet with Russia, Saudi Arabia and Qatar about efforts to stabilize oil markets. Oil has rallied recently on hopes of production cuts, only to fall back again when no material change occurred. Stocks have been taking their cues from energy markets lately, as swings in oil prices ripple across risky assets such as stocks, high-yield debt and base-metals prices. Financial shares in the S&P 500 rose 1.4% Thursday but are the worst-performing sector so far this year, with a decline of more than 11%. Morgan Stanley rose 92 cents, or 3.9%, to $24.63, but is down 23% so far this year. "You have a couple of major pain points of the equity market seeing some relief today," said Brian Fenske, head of sales trading at brokerage firm ITG. Salesforce.com was the biggest gainer in the S&P 500 after the company late Wednesday gave an upbeat outlook for the year ahead and reported better-than-expected revenue for its most recent quarter. Shares of the company, which supplies software to help salespeople keep track of customers, gained 6.90, or 11%, to 69.42. The company's results are considered a bellwether for a portion of the cloud-computing industry, which investors have avoided recently. Salesforce.com shares have declined more than 11% so far this year. Campbell Soup rose 2.09, or 3.5%, to 62.62 after the company said profit rose by nearly a fifth, propelled by falling expenses. Investors have been watching corporate earnings as they assess the health of the U.S. economy. In a sign of stabilization in the U.S. manufacturing industry, orders for durable goods posted their largest monthly gains since last spring. Separately, jobless claims crept higher, while still suggesting the labor market is robust. "It's definitely a mixed picture, and it's mixed for some of the most important indicators for future financial market performance," said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas. Thursday's moves came after a 6.4% tumble in the Shanghai Composite Index, its worst one-day decline since Jan. 26, amid worries about market liquidity. While concerns around China have weighed heavily on global markets this year, investors are more concerned about declines in China's currency and the management of its economy than its stock market, which is less connected to the global economy. The yield on the 10-year U.S. Treasury note fell to 1.699%, from 1.748% Wednesday. Yields fall as prices rise. The Stoxx Europe 600 snapped a two-day losing streak to rise 2%, with bank shares adding 3.5%. Lloyds Banking Group gained 14% in London after the U.K. bank announced a special dividend. Shares of Deutsche Bank rose 2.7% in Frankfurt, but are still down 33% year to date. The euro was up less than 0.1% against the dollar at $1.1019. An estimate for eurozone inflation in January was lowered Thursday, while data also showed lending to firms in the eurozone accelerated last month. In Asia early Friday, Hong Kong's Hang Seng Index was up 1.8%, while Japan's Nikkei 225 Stock Average and Shanghai Composite were each up 0.8% The dollar rose 0.7% against the yen to 112.99 yen on Thursday. Credit: By Aaron Kuriloff
Subject: Stock prices; Dow Jones averages; Daily markets (wsj)
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Feb 26, 2016
column: Thursday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768102876
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768102876?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Bid to Prosecute BP Staff in Gulf Oil Spill Falls Flat; Judges dismissed charges related to Deepwater Horizon blowout; tally: 3 misdemeanors
Author: Viswanatha, Aruna
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Feb 2016: n/a.
Abstract:
Early after the disaster, in 2011, the Justice Department consolidated all the BP investigations into a special task force, giving it a status reached by few cases besides the accounting fraud at now-defunct Enron Corp. Under pressure from Congress and the public after the 2008 financial crisis, in which few executives were charged with crimes, it brought around 50 criminal charges, some carrying penalties of up to 10 years in prison.
Full text: NEW ORLEANS--A critical moment in the government's case against Robert Kaluza, who was facing a criminal charge for his role in the 2010 BP PLC oil spill in the Gulf of Mexico, came when a former colleague was called to testify. Donald Vidrine had already pleaded guilty and was expected to bolster prosecutors' arguments. But he had trouble articulating exactly what he--and by extension Mr. Kaluza--may have done wrong. "I, we, uh, I may not have, I probably didn't press hard enough," the Louisiana native told a federal jury in New Orleans last week, after a long pause. "I thought I had." Late Thursday, a jury took less than two hours to find Mr. Kaluza not guilty of the charge he had ignored warning signs leading to the explosion. It was an ignominious end to the final case in the government's effort to find individuals criminally responsible for the blowout on the Deepwater Horizon. In the four years since the U.S. began its cases against five men, prosecutors withdrew 23 counts before trial, judges dismissed 23 others and jurors acquitted on three counts. The three guilty pleas the government secured were all misdemeanors, and the men received or will likely receive probation. The outcome, stemming from the largest oil spill off the U.S. coast , in which 11 people died and more than three million barrels of oil poured into the Gulf, is a reminder how hard it is to find individuals culpable for catastrophes where companies were held responsible. Defendants and their attorneys successfully argued that many people made errors contributing to the disaster and the problems with the cleanup. Judges dismissed charges, implying that prosecutors had overreached, and one made clear he thought the charges had turned a series of mistakes into a criminal act. When David Rainey, BP's head of Gulf exploration and the most senior executive to face charges, was acquitted on a false-statements charge last year, the judge in the case, Kurt Engelhardt, said in court he thought it was the "correct verdict." BP's penalties In 2012, BP paid $4 billion in criminal penalties and pleaded guilty to an array of crimes connected to the spill, including manslaughter charges based on Messrs. Kaluza and Vidrine's alleged negligence. The outcome of individual cases means BP is in the odd position of having pleaded guilty to crimes tied to charges against its employees that were dismissed by courts. BP spokesman Geoff Morrell declined to comment for this article. Early after the disaster, in 2011, the Justice Department consolidated all the BP investigations into a special task force, giving it a status reached by few cases besides the accounting fraud at now-defunct Enron Corp. Under pressure from Congress and the public after the 2008 financial crisis, in which few executives were charged with crimes, it brought around 50 criminal charges, some carrying penalties of up to 10 years in prison. Prosecutors alleged that Mr. Rainey obstructed Congress and lied about how much oil was leaking from the well. A BP drilling engineer, Kurt Mix, was charged with obstructing justice by deleting text messages related to efforts to stop the spill. Anthony Badalamenti, a manager at Halliburton Energy Services Inc., which provided services to the drilling rig, was also charged with destroying evidence. Messrs. Kaluza and Vidrine, the top supervisors at the well site, faced the gravest accusations, stemming directly from the death of 11 men. Each was charged with 11 counts of "seaman's manslaughter"--an 1830s-era statute enacted to address steamboat collisions--for negligence leading to death at sea, plus 11 more of involuntary manslaughter based on "gross" negligence, each carrying a potential penalty of 10 years in prison. "Make no mistake: While the company is guilty, individuals committed these crimes," then-Justice Department official Lanny Breuer said in announcing the cases in November 2012. A lawyer for Mr. Kaluza, David Gerger, said: "We are grateful for the jury: they understood technical evidence, and justice was done." A lawyer for Mr. Vidrine, Bob Habens, declined to comment. Two lawyers for Mr. Rainey, Reid Weingarten and Brian Heberlig, said "the Deepwater Horizon explosion was an accident, not a crime, no matter how hard prosecutors tried to make it one." A lawyer for Mr. Mix, Joan McPhee, said the prosecutors ignored evidence of Mr. Mix's innocence and "sought to fill the gaping holes in its case by constructing a motive theory that had no grounding in fact." A lawyer for Mr. Badalamenti, who pleaded guilty and received probation, didn't respond to a request for comment. Justice Department spokesman Peter Carr said prosecutors from the criminal and environmental divisions and the U.S. Attorney's office in New Orleans had spent years "committed to ensuring that the victims of this tragedy obtain justice and that those responsible for one of the worst environmental disasters in our country's history are held accountable." Prosecutors were stymied by unexpected hurdles, including when one case was largely dismissed in a way they couldn't appeal, and a conviction vacated due to problems with the jury. Through their investigation, federal prosecutors said evidence showed Messrs. Vidrine and Kaluza made consequential mistakes. Mr. Kaluza was the top BP man on board the rig on April 20, 2010, in the hours before the explosion. He and Mr. Vidrine, who took charge of the platform that night, oversaw a pressure test that produced troubling results, and prosecutors claimed they ignored the readings and accepted illogical theories to explain the anomaly. Pressure test Experts in the investigation said the decision to dismiss a reading that showed 1,400 pounds of pressure on the drill pipe was reckless. Few could understand the explanation Mr. Kaluza gave to justify his decision. He suggested the pressure might be caused by something other than oil flowing up the pipe. An email sent by Mr. Kaluza to colleagues to explain the theory five days after the blowout was met with skepticism. One BP vice president's response was: "???????????????????????????????????????????????????...followed by roughly another 500 question marks," as one judge described it. The email was also described in court documents. "They should have stopped the job and diagnosed the problem," prosecutor Jennifer Saulino argued at the New Orleans federal courthouse last week. "Mr. Kaluza should have called Houston for help, but he didn't." In the evening after the pressure test, the pipe running from the subsea oil well to the drilling rig buckled around the time a surge of natural gas from the well ignited, causing an explosion. Mr. Kaluza sent emails that prosecutors said showed flippancy in discussing the disaster. "It was a very exciting night when we all had to get off the drilling rig in the middle of the ocean at night with the rig exploding!!! :)," he wrote a friend. Mr. Kaluza had only been on the rig for a few days, as a replacement for another employee who was onshore to receive training. Within a year of the indictment, the prosecutors' case had started to unravel. Among other things, they had to explain their use of the antiquated "seaman's manslaughter" law. In December 2013, a federal judge in New Orleans ruled the law applied only to personnel who perform marine and navigation operations, not drilling functions. "The Court recognizes the soundness in the government's argument that oil rig blowouts pose similar risks and safety concerns as did the steamboat explosions of the 19th and 20th centuries," Judge Stanwood Duval Jr. wrote. "Yet it is for Congress to include such types of disasters within the scope" of the law. On appeal, Justice Department lawyer Sangita Rao argued there were no clear lines between the marine and drilling crews. Appellate Judge Patrick Higginbotham was dismissive, saying, "We need lines when you're gonna send a man to prison." Worse for the government, judges questioned the basis for the 11 counts of involuntary manslaughter, making points even the defendants hadn't raised, conveying their sense that prosecutors were overreaching. "It's still a criminal response to a human error," Judge Higginbotham said. Justice Department officials ultimately decided new evidence from related civil trials made most of the case untenable, according to people familiar with the discussions. Prosecutors moved to withdraw the manslaughter charges in December. That left Messrs. Kaluza and Vidrine each facing a single misdemeanor count of violating the Clean Water Act by negligently discharging oil into the Gulf. Mr. Vidrine pleaded guilty to that count on the condition he receive probation. Mr. Kaluza chose to fight the charge, leading to an eight-day trial that ended Thursday night with a rapid not-guilty verdict. Prosecutors' other BP cases also fared poorly. A judge tossed out the obstruction-of-Congress count against Mr. Rainey, BP's Gulf exploration head, when the House of Representatives declined to make certain staffers available. The ruling left them pursuing what was essentially an add-on count--a single statement Mr. Rainey made during a six-hour FBI interview that they alleged was false. Some of Mr. Rainey's witnesses brought the jury to tears. One who flew in from Angola to testify on his behalf impressed the judge. "I'm not quite sure I could get somebody to travel halfway across New Orleans to say something nice about me...So the fact that someone flew halfway across the globe to come and testify...I guess is a credit to you, sir," Judge Engelhardt said in court. Mr. Mix, the drilling engineer, was convicted in 2013 of obstruction of justice for deleting text messages, but the judge granted him a new trial after learning the jury had relied on improper information. The government declined to retry the charge when Mr. Mix in November pleaded guilty to one misdemeanor count of intentionally causing damage without authorization to a "protected computer"--his iPhone. Task force The Justice Department put its Criminal Division in charge of the BP task force, rather than the Environment and Natural Resources Division. The Criminal Division had more resources and could move faster, but the environmental lawyers had more experience with similar offenses. "It is fair to ask whether the Environment Division, which has far more experience with pollution cases than the Criminal Division, would have prosecuted low-level BP officials like Kaluza and Vidrine," said David Uhlmann, a professor at the University of Michigan Law School and former environmental-crimes prosecutor. He added: "The Justice Department always seeks to hold individuals accountable for corporate crime, but doing so in the Gulf oil spill meant charging individuals who had no control over the corporate culture that caused the spill." Mr. Kaluza's lawyers sought to show that multiple failures and responsibilities were behind the blowout. BP owned the oil, but offshore oil driller Transocean Ltd. owned the drilling ship and employed much of the drilling crew. The cement, mixed by oil-field services company Halliburton Co., wasn't of the appropriate composition. A blowout preventer, which hadn't been serviced for nine years, failed to close. Two other safety mechanisms failed to deploy, and a fourth backup didn't work because its battery was burned out. Mr. Kaluza's attorneys suggested the entire crew were in agreement that the troubling pressure test didn't necessarily indicate danger. "You wouldn't move on to the next step unless you believed the test was successful?" Mr. Kaluza's lawyer, David Gerger, asked Mr. Vidrine in court. "Yes," Mr. Vidrine replied. "You thought at the time, you were being reasonable?" Mr. Gerger asked. "Yes," he said again. Credit: By Aruna Viswanatha
Subject: Manslaughter; Oil spills; Petroleum industry; Acquittals & mistrials
Location: United States--US
Company / organization: Name: Congress; NAICS: 921120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768256129
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768256129?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Stre et Journal
U.S. Bid to Prosecute BP Staff Falls Flat --- Judges dismissed charges related to Gulf oil spill; tally: 3 misdemeanors
Author: Viswanatha, Aruna
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Feb 2016: A.1.
Abstract:
Early after the disaster, in 2011, the Justice Department consolidated all the BP investigations into a special task force, giving it a status reached by few cases besides the accounting fraud at now-defunct Enron Corp. Under pressure from Congress and the public after the 2008 financial crisis, in which few executives were charged with crimes, it brought around 50 criminal charges, some carrying penalties of up to 10 years in prison.
Full text: NEW ORLEANS -- A critical moment in the government's case against Robert Kaluza, who was facing a criminal charge for his role in the 2010 BP PLC oil spill in the Gulf of Mexico, came when a former colleague was called to testify. Donald Vidrine had already pleaded guilty and was expected to bolster prosecutors' arguments. But he had trouble articulating exactly what he -- and by extension Mr. Kaluza -- may have done wrong. "I, we, uh, I may not have, I probably didn't press hard enough," the Louisiana native told a federal jury in New Orleans last week, after a long pause. "I thought I had." Late Thursday, a jury took less than two hours to find Mr. Kaluza not guilty of the charge he had ignored warning signs leading to the explosion. It was an ignominious end to the final case in the government's effort to find individuals criminally responsible for the blowout on the Deepwater Horizon. In the four years since the U.S. began its cases against five men, prosecutors withdrew 23 counts before trial, judges dismissed 23 others and jurors acquitted on three counts. The three guilty pleas the government secured were all misdemeanors, and the men received or will likely receive probation. The outcome, stemming from the largest oil spill off the U.S. coast, in which 11 people died and more than three million barrels of oil poured into the Gulf, is a reminder how hard it is to find individuals culpable for catastrophes where companies were held responsible. Defendants and their attorneys successfully argued that many people made errors contributing to the disaster and the problems with the cleanup. Judges dismissed charges, implying that prosecutors had overreached, and one made clear he thought the charges had turned a series of mistakes into a criminal act. When David Rainey, BP's head of Gulf exploration and the most senior executive to face charges, was acquitted on a false-statements charge last year, the judge in the case, Kurt Engelhardt, said in court he thought it was the "correct verdict." In 2012, BP paid $4 billion in criminal penalties and pleaded guilty to an array of crimes connected to the spill, including manslaughter charges based on Messrs. Kaluza and Vidrine's alleged negligence. The outcome of individual cases means BP is in the odd position of having pleaded guilty to crimes tied to charges against its employees that were dismissed by courts. BP spokesman Geoff Morrell declined to comment for this article. Early after the disaster, in 2011, the Justice Department consolidated all the BP investigations into a special task force, giving it a status reached by few cases besides the accounting fraud at now-defunct Enron Corp. Under pressure from Congress and the public after the 2008 financial crisis, in which few executives were charged with crimes, it brought around 50 criminal charges, some carrying penalties of up to 10 years in prison. Prosecutors alleged that Mr. Rainey obstructed Congress and lied about how much oil was leaking from the well. A BP drilling engineer, Kurt Mix, was charged with obstructing justice by deleting text messages related to efforts to stop the spill. Anthony Badalamenti, a manager at Halliburton Energy Services Inc., which provided services to the drilling rig, was also charged with destroying evidence. Messrs. Kaluza and Vidrine, the top supervisors at the well site, faced the gravest accusations, stemming directly from the death of 11 men. Each was charged with 11 counts of "seaman's manslaughter" -- an 1830s-era statute enacted to address steamboat collisions -- for negligence leading to death at sea, plus 11 more of involuntary manslaughter based on "gross" negligence, each carrying a potential penalty of 10 years in prison. "Make no mistake: While the company is guilty, individuals committed these crimes," then-Justice Department official Lanny Breuer said in announcing the cases in November 2012. A lawyer for Mr. Kaluza, David Gerger, said: "We are grateful for the jury: they understood technical evidence, and justice was done." A lawyer for Mr. Vidrine, Bob Habens, declined to comment. Two lawyers for Mr. Rainey, Reid Weingarten and Brian Heberlig, said "the Deepwater Horizon explosion was an accident, not a crime, no matter how hard prosecutors tried to make it one." A lawyer for Mr. Mix, Joan McPhee, said the prosecutors ignored evidence of Mr. Mix's innocence and "sought to fill the gaping holes in its case by constructing a motive theory that had no grounding in fact." A lawyer for Mr. Badalamenti, who pleaded guilty and received probation, didn't respond to a request for comment. Justice Department spokesman Peter Carr said prosecutors from the criminal and environmental divisions and the U.S. Attorney's office in New Orleans had spent years "committed to ensuring that the victims of this tragedy obtain justice and that those responsible for one of the worst environmental disasters in our country's history are held accountable." Prosecutors were stymied by unexpected hurdles, including when one case was largely dismissed in a way they couldn't appeal, and a conviction vacated due to problems with the jury. Through their investigation, federal prosecutors said evidence showed Messrs. Vidrine and Kaluza made consequential mistakes. Mr. Kaluza was the top BP man on board the rig on April 20, 2010, in the hours before the explosion. He and Mr. Vidrine, who took charge of the platform that night, oversaw a pressure test that produced troubling results, and prosecutors claimed they ignored the readings and accepted illogical theories to explain the anomaly. Experts in the investigation said the decision to dismiss a reading that showed 1,400 pounds of pressure on the drill pipe was reckless. Few could understand the explanation Mr. Kaluza gave to justify his decision. He suggested the pressure might be caused by something other than oil flowing up the pipe. An email sent by Mr. Kaluza to colleagues to explain the theory five days after the blowout was met with skepticism. One BP vice president's response was: "??????????????????????????????????????????????????? . . . followed by roughly another 500 question marks," as one judge described it. The email was also described in court documents. "They should have stopped the job and diagnosed the problem," prosecutor Jennifer Saulino argued at the New Orleans federal courthouse last week. "Mr. Kaluza should have called Houston for help, but he didn't." In the evening after the pressure test, the pipe running from the subsea oil well to the drilling rig buckled around the time a surge of natural gas from the well ignited, causing an explosion. Mr. Kaluza sent emails that prosecutors said showed flippancy in discussing the disaster. "It was a very exciting night when we all had to get off the drilling rig in the middle of the ocean at night with the rig exploding!!! :)," he wrote a friend. Mr. Kaluza had only been on the rig for a few days, as a replacement for another employee who was onshore to receive training. Within a year of the indictment, the prosecutors' case had started to unravel. Among other things, they had to explain their use of the antiquated "seaman's manslaughter" law. In December 2013, a federal judge in New Orleans ruled the law applied only to personnel who perform marine and navigation operations, not drilling functions. "The Court recognizes the soundness in the government's argument that oil rig blowouts pose similar risks and safety concerns as did the steamboat explosions of the 19th and 20th centuries," Judge Stanwood Duval Jr. wrote. "Yet it is for Congress to include such types of disasters within the scope" of the law. On appeal, Justice Department lawyer Sangita Rao argued there were no clear lines between the marine and drilling crews. Appellate Judge Patrick Higginbotham was dismissive, saying, "We need lines when you're gonna send a man to prison." Worse for the government, judges questioned the basis for the 11 counts of involuntary manslaughter, making points even the defendants hadn't raised, conveying their sense that prosecutors were overreaching. "It's still a criminal response to a human error," Judge Higginbotham said. Justice Department officials ultimately decided new evidence from related civil trials made most of the case untenable, according to people familiar with the discussions. Prosecutors moved to withdraw the manslaughter charges in December. That left Messrs. Kaluza and Vidrine each facing a single misdemeanor count of violating the Clean Water Act by negligently discharging oil into the Gulf. Mr. Vidrine pleaded guilty to that count on the condition he receive probation. Mr. Kaluza chose to fight the charge, leading to an eight-day trial that ended Thursday night with a rapid not-guilty verdict. Prosecutors' other BP cases also fared poorly. A judge tossed out the obstruction-of-Congress count against Mr. Rainey, BP's Gulf exploration head, when the House of Representatives declined to make certain staffers available. The ruling left them pursuing what was essentially an add-on count -- a single statement Mr. Rainey made during a six-hour FBI interview that they alleged was false. Some of Mr. Rainey's witnesses brought the jury to tears. One who flew in from Angola to testify on his behalf impressed the judge. "I'm not quite sure I could get somebody to travel halfway across New Orleans to say something nice about me . . . So the fact that someone flew halfway across the globe to come and testify . . . I guess is a credit to you, sir," Judge Engelhardt said in court. Mr. Mix, the drilling engineer, was convicted in 2013 of obstruction of justice for deleting text messages, but the judge granted him a new trial after learning the jury had relied on improper information. The government declined to retry the charge when Mr. Mix in November pleaded guilty to one misdemeanor count of intentionally causing damage without authorization to a "protected computer" -- his iPhone. The Justice Department put its Criminal Division in charge of the BP task force, rather than the Environment and Natural Resources Division. The Criminal Division had more resources and could move faster, but the environmental lawyers had more experience with similar offenses. "It is fair to ask whether the Environment Division, which has far more experience with pollution cases than the Criminal Division, would have prosecuted low-level BP officials like Kaluza and Vidrine," said David Uhlmann, a professor at the University of Michigan Law School and former environmental-crimes prosecutor. He added: "The Justice Department always seeks to hold individuals accountable for corporate crime, but doing so in the Gulf oil spill meant charging individuals who had no control over the corporate culture that caused the spill." Mr. Kaluza's lawyers sought to show that multiple failures and responsibilities were behind the blowout. BP owned the oil, but offshore oil driller Transocean Ltd. owned the drilling ship and employed much of the drilling crew. The cement, mixed by oil-field services company Halliburton Co., wasn't of the appropriate composition. A blowout preventer, which hadn't been serviced for nine years, failed to close. Two other safety mechanisms failed to deploy, and a fourth backup didn't work because its battery was burned out. Mr. Kaluza's attorneys suggested the entire crew were in agreement that the troubling pressure test didn't necessarily indicate danger. "You wouldn't move on to the next step unless you believed the test was successful?" Mr. Kaluza's lawyer, David Gerger, asked Mr. Vidrine in court. "Yes," Mr. Vidrine replied. "You thought at the time, you were being reasonable?" Mr. Gerger asked. "Yes," he said again. Credit: By Aruna Viswanatha
Subject: Acquittals & mistrials; Oil spills; Petroleum industry
Location: United States--US
People: Kaluza, Robert
Company / organization: Name: BP PLC; NAICS: 211111, 324110, 447110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Feb 27, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768288017
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768288017?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with perm ission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Africa's Richest Woman Draws Scrutiny Over Source of Wealth; European legislators question if money for deals comes from public oil
Author: Kowsmann, Patricia; McGroarty, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Feb 2016: n/a.
Abstract: None available.
Full text:
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 27, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768311322
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768311322?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The New Oil-Storage Space: Railcars; U.S. market is so oversupplied with oil that traders are experimenting with a new place for storing excess crude
Author: Friedman, Nicole; Tita, Bob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Feb 2016: n/a.
Abstract:
Federal regulations require railroads that store cars loaded with hazardous materials like oil to comply with strict storage and security measures to keep the cars away from daily rail traffic. BP PLC Chief Executive Bob Dudley joked in a speech this month that by midyear, "every storage tank and swimming pool in the world will be filled with oil."
Full text: The U.S. market is so oversupplied with oil that traders are experimenting with a new place for storing excess crude: empty railcars. There are plenty to choose from: Thousands of railcars ordered up to transport oil now sit idle because current ultralow crude prices have made shipping by train unprofitable. Meanwhile, traditional storage tanks are filling up as U.S. oil inventories swell to their highest level since the 1930s. Some industry participants are calling the new practice "rolling storage"--a landlocked spin on the "floating storage" producers use to hold crude on giant oil tankers when inventories run high. The combination of cheap oil and surplus railcars has created a budding new side business for traders. J.P. Fjeld-Hansen, a managing director for trading company Musket Corp., tested using railcars for storage last year and found he could profit by putting the oil aside while locking in a higher price to deliver it in a later month. The company built a rail terminal in Windsor, Colo., in 2012 to load oil shipments during a boom in U.S. oil production. Now, Mr. Fjeld-Hansen says, "The focus has shifted from a loading terminal to an oil-storage and railcar-storage business." Energy Midstream, a trading company based in The Woodlands, Texas, stored an ultralight oil known as condensate on Ohio railcars last month for about 15 days before shipping it to a buyer in Canada. Dennis Hoskins, a managing partner at Energy Midstream, says there are so many unused tank cars that he is constantly hearing from railcar owners hoping to put them to use. "We get offers everyday for railcars," he said. The use of railcars for storage could be limited by the cost of track space and safety and liability concerns that have followed a string of high-profile transport accidents. Issues range from leaky cars to the risk of collisions and fires. Federal regulations require railroads that store cars loaded with hazardous materials like oil to comply with strict storage and security measures to keep the cars away from daily rail traffic. Railroads and users face responsibility for leaks, collisions or other mishaps. "I don't want the liability," said Judy Petry, president of Oklahoma rail operator Farmrail System Inc. "We prefer not to hold a loaded car." Still, the oil has to go somewhere. The surge in shale-oil production has created a massive glut that the industry is struggling to absorb. BP PLC Chief Executive Bob Dudley joked in a speech this month that by midyear, "every storage tank and swimming pool in the world will be filled with oil." Khory Ramage, president of Ironhorse Permian Basin LLC, which operates a rail terminal in Artesia, N.M., said he hears regularly from traders looking to store crude in his railcars. Crude-storage costs "have been accelerating, just due to the demand for it and less room," he said. "You'll probably start seeing this kick up more and more." U.S. crude inventories rose above 500 million barrels in late January for the first time since 1930, according to the Energy Information Administration. The cheapest form of storage--underground salt caverns--can cost 25 cents a barrel each month, while storing crude on railcars costs about 50 cents a barrel and floating storage can cost 75 cents or more. The cost estimates don't include loading and transportation. Railcars hold between 500 and 700 barrels of oil, less than a cavern, tank or ship can store. The usage of U.S. railcars to transport large volumes of oil picked up steam a few years ago as a byproduct of the fracking boom. Fields sprung up faster than pipelines could be laid, so producers improvised and shipped their output to market by rail. Companies soon realized railroads offered greater flexibility to transfer oil to whomever offered the best price. Some pipeline companies even joined the rail business, building terminals to load and unload oil. U.S. oil settled Friday at $32.78 a barrel, down nearly 70% from mid-2014. The plunge in oil prices brought that activity to a halt. Analysts estimate there are now as many as 20,000 tank cars--about one-third of the North American fleet for hauling oil--parked out of the way in storage yards or along unused stretches of tracks in rural areas. Producers and shippers who signed long-term leases for the cars during the boom are stuck paying monthly rates that typically run $1,500 to $1,700 per car. Traders can pay those prices and still profit. Oil bought at the April price and sold via the futures market for delivery a year later could net a trader $8.07 a barrel, not including storage or transportation costs. As central storage hubs fill up, oil companies are more willing to pay for expensive and remote types of storage, said Ernie Barsamian, principal of the Tank Tiger, which keeps a database of companies looking to buy and sell oil storage space. The Tank Tiger posted an inquiry Wednesday on behalf of a client seeking 75,000 barrels of crude-oil storage or space to park 100 to 120 railcars loaded with crude. Mr. Barsamian likened the disappearance of available storage to a coloring book where nearly all the white space has been filled in. "You're getting closer to the edges," he said. Write to Nicole Friedman at nicole.friedman@wsj.com and Bob Tita at robert.tita@wsj.com Credit: By Nicole Friedman and Bob Tita
Subject: Petroleum industry; Railroads; Cost estimates; Transportation terminals; Inventory; Petroleum production
Location: United States--US
People: Dudley, Bob
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 28, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768415938
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768415938?accountid=7117
Copyright: (c) 2016 Dow Jon es & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The New Oil-Storage Space: Railcars; U.S. market is so oversupplied with oil that traders are experimenting with a new place for storing excess crude
Author: Friedman, Nicole; Tita, Bob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
Federal regulations require railroads that store cars loaded with hazardous materials like oil to comply with strict storage and security measures to keep the cars away from daily rail traffic. BP PLC Chief Executive Bob Dudley joked in a speech this month that by midyear, "every storage tank and swimming pool in the world will be filled with oil."
Full text: The U.S. is so awash in crude oil that traders are experimenting with new places to store it: empty railcars. Thousands of railcars ordered up to transport oil are now sitting idle because current ultralow crude prices have made shipping by train unprofitable. Meanwhile, traditional storage tanks are running out of room as U.S. oil inventories swell to their highest level since the 1930s. Some industry participants are calling the new practice "rolling storage"--a landlocked spin on the "floating storage" producers use to hold crude on giant oil tankers when inventories run high. The combination of cheap oil and surplus railcars has created a budding new side business for traders. J.P. Fjeld-Hansen, a managing director for trading company Musket Corp., tested using railcars for storage last year and found he could profit by putting the oil aside while locking in a higher price to deliver it in a later month. The company built a rail terminal in Windsor, Colo., in 2012 to load oil shipments during a boom in U.S. oil production. Now, Mr. Fjeld-Hansen says, "The focus has shifted from a loading terminal to an oil-storage and railcar-storage business." Energy Midstream, a trading company based in The Woodlands, Texas, stored an ultralight oil known as condensate on Ohio railcars last month for about 15 days before shipping it to a buyer in Canada. Dennis Hoskins, a managing partner at Energy Midstream, says there are so many unused tank cars that he is constantly hearing from railcar owners hoping to put them to use. "We get offers everyday for railcars," he said. The use of railcars for storage could be limited by the cost of track space and safety and liability concerns that have followed a string of high-profile transport accidents. Issues range from leaky cars to the risk of collisions and fires. Federal regulations require railroads that store cars loaded with hazardous materials like oil to comply with strict storage and security measures to keep the cars away from daily rail traffic. Railroads and users face responsibility for leaks, collisions or other mishaps. "I don't want the liability," said Judy Petry, president of Oklahoma rail operator Farmrail System Inc. "We prefer not to hold a loaded car." Still, the oil has to go somewhere. The surge in shale-oil production has created a massive glut that the industry is struggling to absorb. BP PLC Chief Executive Bob Dudley joked in a speech this month that by midyear, "every storage tank and swimming pool in the world will be filled with oil." Khory Ramage, president of Ironhorse Permian Basin LLC, which operates a rail terminal in Artesia, N.M., said he hears regularly from traders looking to store crude in his railcars. Crude-storage costs "have been accelerating, just due to the demand for it and less room," he said. "You'll probably start seeing this kick up more and more." U.S. crude inventories rose above 500 million barrels in late January for the first time since 1930, according to the Energy Information Administration. The cheapest form of storage--underground salt caverns--can cost 25 cents a barrel each month, while storing crude on railcars costs about 50 cents a barrel and floating storage can cost 75 cents or more. The cost estimates don't include loading and transportation. Railcars hold between 500 and 700 barrels of oil, less than a cavern, tank or ship can store. The use of U.S. railcars to transport large volumes of oil picked up steam a few years ago as a byproduct of the fracking boom. Fields sprung up faster than pipelines could be laid, so producers improvised and shipped their output to market by rail. Companies soon realized railroads offered greater flexibility to transfer oil to whomever offered the best price. Some pipeline companies even joined the rail business, building terminals to load and unload oil. U.S. oil settled Friday at $32.78 a barrel, down nearly 70% from mid-2014. The plunge in oil prices brought that activity to a halt. Analysts estimate there are now as many as 20,000 tank cars--about one-third of the North American fleet for hauling oil--parked out of the way in storage yards or along unused stretches of tracks in rural areas. Producers and shippers who signed long-term leases for the cars during the boom are stuck paying monthly rates that typically run $1,500 to $1,700 per car. Traders can pay those prices and still profit. Oil bought at the April price and sold through the futures market for delivery a year later could net a trader $8.07 a barrel, not including storage or transportation costs. As central storage hubs fill up, oil companies are more willing to pay for expensive and remote types of storage, said Ernie Barsamian, principal of the Tank Tiger, which keeps a database of companies looking to buy and sell oil storage space. The Tank Tiger posted an inquiry Wednesday on behalf of a client seeking 75,000 barrels of crude-oil storage or space to park 100 to 120 railcars loaded with crude. Mr. Barsamian likened the disappearance of available storage to a coloring book where nearly all the white space has been filled in. "You're getting closer to the edges," he said. Write to Nicole Friedman at nicole.friedman@wsj.com and Bob Tita at robert.tita@wsj.com Credit: By Nicole Friedman and Bob Tita
Subject: Petroleum industry; Railroads; Cost estimates; Transportation terminals; Inventory; Petroleum production
Location: United States--US
People: Dudley, Bob
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768489731
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768489731?accountid=7117
Copyright: (c) 2016 Dow Jon es & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices up on Strong U.S. Data and Lower Oil-Rig Count; April Brent crude on London's ICE Futures exchange rose $0.45 to $35.55 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
According to an analysis by Cantor Fitzgerald & Co. of 53 producers, U.S. crude-oil production is expected to fall 1.1% this year and expand 1.7% in 2017, down from expectations at the end of last year for growth of 4.6% in 2016 and a 3.1% expansion next year.
Full text: Crude oil prices rose in early Asian trade Monday, buoyed by hopes that a fall in U.S. oil rigs would ease excess supply while stronger consumer spending in that country would spark demand for oil. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $32.95 a barrel at 0246 GMT, up $0.17 in the Globex electronic session. April Brent crude on London's ICE Futures exchange rose $0.45 to $35.55 a barrel. U.S. consumer spending grew in January at the fastest clip in eight months, new data showed Friday, as a strong job market and robust wage gains boosted Americans' propensity to spend. The pickup followed other improvement across the economy in January, including stronger retail sales and home purchases. A report Thursday showed new orders for big-ticket durable goods also increased last month following their worst annual performance since the recession, suggesting the U.S. manufacturing sector could be on the mend. "This is great news for oil because it signals higher future demand," said an energy analyst at an Australia bank. Oversupply and tepid demand growth have pushed down prices by around 70% since mid-2014. Analysts say the persistently low prices are forcing some high-cost producers, such as those in North America, to trim production in order minimize cost. The latest data released by the U.S. Energy Information Administration shows U.S. crude production continues to be on a downtrend, falling to 9.1 million barrels a day in the end week ended Feb 19. Last week, the U.S. oil-rig count also slid further, falling by 26 to 413, according to a report by industry group Baker Hughes. There are now about 68% fewer rigs of all kinds from a peak of 1,609 in October 2014. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the oil industry, has fallen sharply since oil prices began to fall. According to an analysis by Cantor Fitzgerald & Co. of 53 producers, U.S. crude-oil production is expected to fall 1.1% this year and expand 1.7% in 2017, down from expectations at the end of last year for growth of 4.6% in 2016 and a 3.1% expansion next year. "The slow decline rate shows that it takes time for the U.S. shale producers to adjust to the low prices but it also shows that at this price level, it is not economical for many of them to keep going," said Barnabas Gan, an energy analyst at OCBC. Despite signs of falling production, the market remains heavily oversupplied. Some analysts say while the market has little expectation of any concrete actions by major oil producers to support prices, talks between Russia and Saudi Arabia to possibly freeze production at the January levels are providing a glimmer of hope. This week, traders will take cues from China's February manufacturing data, due Tuesday, and the weekly U.S. crude inventories and production data on Wednesday. Nymex reformulated gasoline blendstock for March--the benchmark gasoline contract--was unchanged at to $1.0166 a gallon. ICE gasoil for March changed hands at $315.50 a metric ton, down $9.75 from Friday's settlement. --Nicole Friedman and Harriet Torry contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Petroleum industry; Petroleum production
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Fitzgerald & Co; NAICS: 541820; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768489735
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768489735?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
MoneyBeat: Oil Patch Is Getting Drier
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
Several, including EOG Resources Inc., Apache Corp., Continental Resources Inc. and Devon Energy Corp. said last week they would cut spending and predicted production would fall.
Full text: The tumble in oil prices continues to cause oil producers to cut back. The question for investors is: When will those cuts lead to a decrease in production? The number of oil rigs operating in the U.S. oil patch dropped by 13 last week to 400, according to field-services company Baker Hughes International. That marks the lowest level in more than five years and a huge decline from the peak, down 75% since October 2014. Though the weekly difference was nominal, and the oil market largely looked past the number, the continued decline in production activity is incrementally important. It shows U.S. producers are continuing to scale back. So far, that decline hasn't translated into an equal decline in output: The U.S. Energy Information Administration's estimates of U.S. oil production have fallen only 6% since their peak last April, as producers have managed to continue pumping while wringing efficiencies out of operations. But U.S. output, while holding for now above 9.1 million barrels a day, is clearly set to decline as the industry twists under substantial debt burdens and low prices that preclude profitable operations for most. Several, including EOG Resources Inc., Apache Corp., Continental Resources Inc. and Devon Energy Corp. said last week they would cut spending and predicted production would fall. Perhaps most telling is the level U.S. oil output was at the last time rig counts were this low: December 2009, when the U.S. was producing just 5.5 million barrels a day. That takes the U.S. all the way back to the beginning of the U.S. shale oil boom, and suggests--efficiencies or no--that output can't remain at these lofty levels. Christian Berthelsen Credit: By Christian Berthelsen
Subject: Petroleum industry; Statistical data; Petroleum production
Location: United States--US
Company / organization: Name: EOG Resources Inc; NAICS: 211111, 213112; Name: Devon Energy Corp; NAICS: 211111; Name: Continental Resources Inc; NAICS: 211111; Name: Apache Corp; NAICS: 324110, 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768490829
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768490829?accountid=7117
Copyright: (c ) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Moving the Market -- MoneyBeat: Oil Patch Is Getting Drier
Author: Berthelsen, Christian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Feb 2016: C.2.
Abstract:
The U.S. Energy Information Administration's estimates of U.S. oil production have fallen only 6% since their peak last April, as producers have managed to continue pumping while wringing efficiencies out of operations.
Full text: The tumble in oil prices continues to cause oil producers to cut back. The question for investors is: When will those cuts lead to a decrease in production? The number of oil rigs operating in the U.S. oil patch dropped by 13 last week to 400, according to field-services company Baker Hughes International. That marks the lowest level in more than five years. Though the weekly difference was nominal, and the oil market largely looked past the number, the continued decline in production activity is incrementally important. It shows U.S. producers are continuing to scale back. So far, that decline hasn't translated into an equal decline in output: The U.S. Energy Information Administration's estimates of U.S. oil production have fallen only 6% since their peak last April, as producers have managed to continue pumping while wringing efficiencies out of operations. But U.S. output, while holding for now above 9.1 million barrels a day, is clearly set to decline as the industry twists under substantial debt burdens and low prices that preclude profitable operations for most. Perhaps most telling is the level U.S. oil output was at the last time rig counts were this low: December 2009, when the U.S. was producing just 5.5 million barrels a day. That takes the U.S. all the way back to the beginning of the U.S. shale oil boom, and suggests -- efficiencies or no -- that output can't remain at these lofty levels. Credit: By Christian Berthelsen
Subject: Petroleum industry; Petroleum production; Statistical data
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.2
Publication year: 2016
Publication date: Feb 29, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768524824
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768524824?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Africa's Richest Woman: Critics Say Angola Oil Revenue Fuels Her Deals
Author: Kowsmann, Patricia; McGroarty, Patrick
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Feb 2016: C.1.
Abstract:
In both countries, her portfolio of dominant banks, retailers and telecommunications companies makes her an object of media fascination and persistent speculation that her capital comes from her father's access to state oil revenue. Ms. dos Santos's hard-nosed business dealings are also creating controversy in Portugal, where her disagreements with BPI's management over the fate of its Angolan unit risk putting the lender at odds with its supervisor, the European Central Bank.
Full text: Africa's wealthiest woman, the eldest child of Angola's longtime ruler, is frank about the trouble facing her country'soil-dependent economy. "The economic situation today is difficult," said Isabel dos Santos, whose Angolan investments include the nation's top mobile operator and a supermarket chain battling sinking consumer demand. "With the lower oil prices, we are definitely feeling the pinch." The 42-year-old business magnate is feeling the pinch as well. The value of her two-continent empire has fallen along with global markets. Forbes magazine puts her net worth at $3.1 billion, down from $3.4 billion last year and $3.7 billion in 2014. She remains a controversial focus of deal making in Angola and Portugal, where she has invested hundreds of millions of dollars. In both countries, her portfolio of dominant banks, retailers and telecommunications companies makes her an object of media fascination and persistent speculation that her capital comes from her father's access to state oil revenue. Her 200 million euro ($219 million) deal to buy a majority stake in Portuguese power-equipment maker Efacec Power Solutions SGPS last fall prompted a group of European lawmakers to call for an investigation into whether she has channeled public oil revenue into personal investments. She is feuding with partners in an Angolan telecom venture over alleged unpaid dividends. And she is in conflict with Banco BPI SA, Portugal's second-biggest traded lender, over the fate of its Angolan unit. In a rare interview, Ms. dos Santos defended her investments and her country. She said she isn't driven by money and drew a distinction between her businesses and the regime run by her father, President Jose Eduardo dos Santos. "I'm not financed by any state money or any public funds," she said. "I don't do that." The gulf between her fortune and Angola's pervasive poverty, which has widened during the 37 years of her father's rule, has made Ms. dos Santos a magnet forcriticism from opposition politicians in Angola and human-rights groups abroad. Oil wealth has transformed Angola's capital, Luanda, into one of the world's most expensive cities. But the World Bank says two-thirds of the nation's 24 million people live on less than $2 a day. Conditions have worsened with the plunge in oil prices. Africa's second-biggest crude producer has shed thousands of jobs. Ms. dos Santos's investments have suffered as well. Angola's currency, the kwanza, has lost half its value against the U.S. dollar in a year, eroding the value of the country's businesses. In Portugal, her most important investment -- an 18.6% stake in BPI -- has shed one-fifth of its value over the past year amid a weak market view and a failed takeover attempt by its largest shareholder. Ms. dos Santos said she used her savings to open a "shack" called Miami Beach, now one of Luanda's most expensive nightclubs. With a friend, she started a trucking company to keep the club and other businesses stocked with beer and soft drinks. "I'm just tremendously independent," Ms. dos Santos said. "I always had this wish to stand alone and not be in my parents' shadow." When Angola's government sought investors to build a mobile-phone network in the late 1990s, Ms. dos Santos said she used earnings from both businesses to bid about $1 million for the license. Today, Unitel SA, which Ms. dos Santos oversees as chairwoman, is valued at more than $5 billion. Unitel is embroiled in a dispute with a foreign business partner. The company is fighting Brazil's Oi SA in court over what the Latin American telecom operator said are $600 million in unpaid dividends to Portugal Telecom SGPS, a Portuguese company Oi merged with in 2013. Portugal Telecom had bought one-quarter of Unitel in 2000. Oi executives said they discovered during their merger with Portugal Telecom that Unitel hadn't paid dividends to its shareholder for years. Ms. dos Santos said Unitel had paid the dividends in Angola, but that Oi hadn't repatriated them. Oi said it has yet to receive any dividends. Ms. dos Santos's hard-nosed business dealings are also creating controversy in Portugal, where her disagreements with BPI's management over the fate of its Angolan unit risk putting the lender at odds with its supervisor, the European Central Bank. A 2014 European Union ruling placed Angola among countries whose debt is riskier than that of its own members. That resulted in a tighter central-bank limit on BPI's exposure to Angola -- no more than 25% of the bank's funds, a limit BPI exceeds by more than 3 billion euros. The central bank has given BPI until April to raise capital or shed its Angolan operations. BPI proposed spinning off the Angola unit as a free-standing company while keeping control, but Ms. dos Santos blocked the move in a shareholders vote on Feb. 5. Instead, Ms. dos Santos's Unitel, which owns 49.9% of the Angolan unit, offered 140 million euros to increase its stake in the Angolan unit to a majority at what Caixa BI Investment Bank analyst Andre Rodrigues calculated then would be a low price. Ms. dos Santos said she understands the ECB's need to mitigate foreign risks and said her bid is a fair price. Concerns about the source of her wealth burst into the open in October, when five members of the European Parliament asked the European Commission to investigate her purchase of a majority stake in Efacec, saying "legitimate doubts arise on whether the Angolan state might be indirectly financing 'private' major acquisitions of Ms. Isabel dos Santos, incurring in numerous illegalities under Angolan law." A European Commission official said it has raised the issue with Portuguese authorities, who are responsible for carrying out due diligence if they notice suspicious activities. The Portuguese Financial Intelligence unit didn't answer requests for comment. The purchase was made by Winterfell Industries, a company set up in December 2014, registered on the Portuguese island of Madeira and controlled by Ms. dos Santos, the parliamentarians said. Two months before the deal closed, the parliament members wrote, Mr. dos Santos issued a presidential order authorizing Angola's state electricity company to purchase 40% of Winterfell from Ms. dos Santos for an undisclosed sum. Since the purchase, Efacec has become the supplier of three dams being built in Angola. In the interview, Ms. dos Santos said that the state hadn't concluded its purchase of the Winterfell stake and that Winterfell's purchase of the equipment manufacturer had been paid out of her own pocket with backing from commercial banks. Credit: By Patricia Kowsmann and Patrick McGroarty
Subject: Tender offers; International finance; Economic conditions -- Angola
Location: Africa Angola
People: Dos Santos, Jose Eduardo dos Santos, Isabel
Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Feb 29, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768525458
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768525458?accountid=7117
Copyright: (c) 2016 Dow J ones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Railcars Double as Storage in Oil Glut
Author: Friedman, Nicole; Tita, Bob
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Feb 2016: A.1.
Abstract:
Federal regulations require railroads that store cars loaded with hazardous materials like oil to comply with strict storage and security measures to keep the cars away from daily rail traffic. BP PLC Chief Executive Bob Dudley joked in a speech this month that by midyear, "every storage tank and swimming pool in the world will be filled with oil."
Full text: The U.S. is so awash in crude oil that traders are experimenting with new places to store it: empty railcars. Thousands of railcars ordered up to transport oil are now sitting idle because current ultralow crude prices have made shipping by train unprofitable. Meanwhile, traditional storage tanks are running out of room as U.S. oil inventories swell to their highest level since the 1930s. Some industry participants are calling the new practice "rolling storage" -- a landlocked spin on the "floating storage" producers use to hold crude on giant oil tankers when inventories run high. The combination of cheap oil and surplus railcars has created a budding new side business for traders. J.P. Fjeld-Hansen, a managing director for trading company Musket Corp., tested using railcars for storage last year and found he could profit by putting the oil aside while locking in a higher price to deliver it in a later month. The company built a rail terminal in Windsor, Colo., in 2012 to load oil shipments during a boom in U.S. oil production. Now, Mr. Fjeld-Hansen says, "The focus has shifted from a loading terminal to an oil-storage and railcar-storage business." Energy Midstream, a trading company based in The Woodlands, Texas, stored an ultralight oil known as condensate on Ohio railcars last month for about 15 days before shipping it to a buyer in Canada. Dennis Hoskins, a managing partner at Energy Midstream, says there are so many unused tank cars that he is constantly hearing from railcar owners hoping to put them to use. "We get offers everyday for railcars," he said. The use of railcars for storage could be limited by the cost of track space and safety and liability concerns that have followed a string of high-profile transport accidents. Issues range from leaky cars to the risk of collisions and fires. Federal regulations require railroads that store cars loaded with hazardous materials like oil to comply with strict storage and security measures to keep the cars away from daily rail traffic. Railroads and users face responsibility for leaks, collisions or other mishaps. "I don't want the liability," said Judy Petry, president of Oklahoma rail operator Farmrail System Inc. "We prefer not to hold a loaded car." Still, the oil has to go somewhere. The surge in shale-oil production has created a massive glut that the industry is struggling to absorb. BP PLC Chief Executive Bob Dudley joked in a speech this month that by midyear, "every storage tank and swimming pool in the world will be filled with oil." Khory Ramage, president of Ironhorse Permian Basin LLC, which operates a rail terminal in Artesia, N.M., said he hears regularly from traders looking to store crude in his railcars. Crude-storage costs "have been accelerating, just due to the demand for it and less room," he said. "You'll probably start seeing this kick up more and more." U.S. crude inventories rose above 500 million barrels in late January for the first time since 1930, according to the Energy Information Administration. The cheapest form of storage -- underground salt caverns -- can cost 25 cents a barrel each month, while storing crude on railcars costs about 50 cents a barrel and floating storage can cost 75 cents or more. The cost estimates don't include loading and transportation. Railcars hold between 500 and 700 barrels of oil, less than a cavern, tank or ship can store. The use of U.S. railcars to transport large volumes ofoil picked up steam a few years ago as a byproduct of the fracking boom. Fields sprung up faster than pipelines could be laid, so producers improvised and shipped their output to market by rail. Companies soon realized railroads offered greater flexibility to transfer oil to whomever offered the best price. Some pipeline companies even joined the rail business, building terminals to load and unload oil. U.S. oil settled Friday at $32.78 a barrel, down nearly 70% from mid-2014. The plunge in oil prices brought that activity to a halt. Analysts estimate there are now as many as 20,000 tank cars -- about one-third of the North American fleet for hauling oil -- parked out of the way in storage yards or along unused stretches of tracks in rural areas. Producers and shippers who signed long-term leases for the cars during the boom are stuck paying monthly rates that typically run $1,500 to $1,700 per car. Traders can pay those prices and still profit. Oil bought at the April price and sold through the futures market for delivery a year later could net a trader $8.07 a barrel, not including storage or transportation costs. As central storage hubs fill up, oil companies are more willing to pay for expensive and remote types of storage, said Ernie Barsamian, principal of the Tank Tiger, which keeps a database of companies looking to buy and sell oil storage space. The Tank Tiger posted an inquiry Wednesday on behalf of a client seeking 75,000 barrels of crude-oil storage or space to park 100 to 120 railcars loaded with crude. Mr. Barsamian likened the disappearance of available storage to a coloring book where nearly all the white space has been filled in. "You're getting closer to the edges," he said.
Credit: By Nicole Friedman and Bob Tita
Subject: Crude oil; Railroad transportation
Location: United States--US
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Feb 29, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768525599
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768525599?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Genel Shares Plunge After Tony Hayward's Oil Explorer Cuts Crude Reserves at Core Field; Venture downgrades amount of oil it can pump from field in Iraqi Kurdistan
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
Genel's success finding oil inspired other companies to follow into Kurdistan, including Exxon Mobil Corp. and Chevron Corp. But Genel said Monday that its estimates of Taq Taq's reserves were wrong and that in fact the field only has 356 million barrels of which 184 million have already been produced.
Full text: LONDON--Former BP PLC chief Tony Hayward's ambitions to build an international oil explorer suffered another blow on Monday when his latest venture, Genel Energy PLC, said it was cutting its crude reserves in half at its main field. Shares in Genel, once an investor darling for its promises of growth from a portfolio of oil prospects from Angola to Kurdistan, fell more than 40% on Monday after the company downgraded the amount of oil it could pump from its core oil field in Iraqi Kurdistan. Genel also said that low oil prices had diminished the value of the remaining reserves at the field, forcing an impairment charge of $1 billion. Genel's market value fell to an all-time low of around $310 million Monday, down from the company's peak of more than $5 billion in January 2014. Mr. Hayward is the chairman of Genel and remains the company's dominant force despite stepping down as chief executive last year. Related * Tony Hayward's Genel Gets Kurdish Oil Payment (Dec.2, 2014) * Genel's Kurdistan Oil Production Surging, Says CEO Tony Hayward (July 3, 2014) * Kurdistan Oil Payment Raises Hopes for Western Energy Companies (Oct. 15, 2015) "This is a very disappointing day for myself and the team," Mr. Hayward told investors on a conference call. The reserves downgrade marked the latest setback for Mr. Hayward since he left the helm of BP in 2010 following the Deepwater Horizon explosion and oil spill in the Gulf of Mexico. He became a controversial figure during the spill for comments that included "I'd like my life back," and he has said that he left BP because it was no longer tenable for him to be its public face A former geologist who rose from working offshore rigs to take over BP, Mr. Hayward quickly tried to rebuild his career in the oil business. In 2011, he teamed up with financier Nathaniel Rothschild and former Goldman Sachs banker Julian Metherell to raise more than $2 billion for an investment vehicle called Vallares. It soon merged with Genel Energy, a Turkish energy company with an international portfolio. The combined company had a roughly $2.1 billion market value in 2011. But many of Genel's prospects didn't work out. It drilled unsuccessfully in offshore Malta, Angola and Morocco and wrote off about $480 million of exploration costs in its 2014 accounts. The $141 million Angola play, where Mr. Hayward linked up with his previous boss at BP, John Browne, was a particular disappointment. At the time, Mr. Hayward said the deepwater wells were a "rare opportunity to enter into a low-risk multibillion barrel resource play." Kurdistan represented Genel's big success . A field called Taq Taq was believed to have proven and probable reserves of 683 million barrels--an industry measure for what can be commercially extracted. Genel expects gross production at the field will average around 80,000 barrels a day this year, before starting to fall next year. Genel's success finding oil inspired other companies to follow into Kurdistan, including Exxon Mobil Corp. and Chevron Corp. But Genel said Monday that its estimates of Taq Taq's reserves were wrong and that in fact the field only has 356 million barrels of which 184 million have already been produced. Mr. Hayward said Taq Taq still has 172 million barrels of crude it can pump at around $2 a barrel, allowing it to be potentially profitable even at crude prices of about $36 a barrel--down two thirds from June 2014. "Whilst it is a major setback, it is by no means the end of Genel," Mr. Hayward told investors on Monday. "Even based on this reserve assessment we continue to enjoy some of the lowest cost producing assets in the world with many years production ahead of them." For Genel, the downgrade will reduce the company's future cash flows and create uncertainties over the resource base at Tawke--a second Kurdistan oil field in which it holds a stake. It also raises concerns over the attractiveness of Kurdistan to the wider oil industry, potentially putting paid to investor hopes that Genel would get taken over by a bigger oil company. Investors had hoped that abundant and easy-to-access onshore hydrocarbon resources in Kurdistan offset the political risk of investing there. The country's regional government is embroiled in a dispute with the federal government in Baghdad over oil revenues, and its Peshmerga fighters are battling Islamic State militants on its borders. "The news today changes this investment thesis," said Citigroup analyst Michael Alsford. Disputes between Baghdad and Kurdistan over oil revenues mean that Genel is still owed about $400 million by the Kurdistan Regional Government for oil exports via a pipeline to Turkey. Alex MacDonald contributed to this article. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Subject: Petroleum industry; Oil exploration; Oil reserves; Petroleum production; Energy industry
Location: Angola
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768546055
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768546055?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Gain on Supply Expectations; Count of U.S. oil rigs dropped to lowest level since 2009, according to latest Baker Hughes report
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
Asian and European equity markets were lower on Monday, which typically puts pressure on oil given its bearish signal on corporate profits and the global economy.
Full text: NEW YORK--Oil prices rose Monday on signs that U.S. drilling activity is hitting new lows, though new federal data showed that declines in U.S. oil production slowed in December. Despite plummeting oil prices in the past year and a half, global crude output has increased as production in the U.S. remained high and the Organization of the Petroleum Exporting Countries has opted keep pumping at a fast clip. The global crude-oil market is expected to remain oversupplied through the rest of the year. The number of rigs drilling for oil in the U.S. fell by 13 last week to 400 , the lowest level since 2009, Baker Hughes Inc. said late Friday. The oil market often reacts to the rig count on Monday, after traders have had time to digest the news. U.S. producers have sharply cut spending on new drilling in response to low prices. But they have also cut costs and improved efficiency, so U.S. output hasn't fallen as quickly as some market watchers had expected. At the current drilling level, production will start declining at a faster pace this year, some analysts say. "The U.S. energy industry continues to get hurt," said Phil Flynn, analyst at the Price Futures Group in Chicago, in a note. "What we are seeing is U.S. output crashing and that will start to cut into the U.S. oil glut." However, data released late Monday showed that U.S. output barely fell in December from the prior month. U.S. production declined 0.5% to 9.3 million barrels a day in December, the U.S. Energy Information Administration said Monday, as onshore production in Texas and North Dakota fell but offshore output rose. Light, sweet crude for April delivery settled up 97 cents, or 3%, at $33.75 a barrel on the New York Mercantile Exchange, the highest settlement since Jan. 6. Prices posted a 0.4% gain for the month, the first monthly gain since October. Brent, the global benchmark, rose 87 cents, or 2.5%, to $35.97 a barrel on ICE Futures Europe, capping a 3.5% monthly gain. The April Brent contract expired at settlement Monday. Brent for May delivery, the more actively traded contract, rose $1.13 cents, or 3.2%, to $36.57 a barrel. In another sign that low prices are starting to cut into global oil production, Mexico's state oil company Petroléos Mexicanos said Monday that its production is expected to fall by 100,000 barrels a day to about 2.13 million barrels a day this year due to budget cuts. However, the glut of oil remains overwhelming in some regions. Data provider Genscape Inc. said Monday that crude-oil supplies at the key storage hub of Cushing, Okla., rose to a record high in the week ended Friday, according to a person who viewed the data. And up to 50 oil tankers are waiting to unload cargo in the port of Rotterdam, the highest number since 2009. An expected drop in Nigerian output has also pushed prices higher. A company that operates a joint venture owned by Royal Dutch Shell PLC and other firms said last week that it declared force majeure in a pipeline in Nigeria due to a leak. Force majeure refers to a clause often included in commodity contracts that offer companies leeway when extraordinary circumstances--such as fires, natural disasters or war--hinder their ability to fulfill obligations. Oil exports from the pipeline are expected to be halted until April, Reuters reported, cutting Nigerian output by nearly 250,000 barrels a day. Nigeria produces about 1.8 million barrels a day, according to the International Energy Agency. The oil market is stuck in a tight trading range, said Mike Nielson, a senior derivatives trader at the Copenhagen-based Global Risk Management. "At $36 we are selling and at $32 we are buying," Mr. Nielson said. "Until this level is broken, we won't make a decision." Talk among large producing nations about a possible production freeze has also boosted prices in recent weeks. Saudi Arabia, Russia, Qatar and Venezuela announced that they are willing to freeze production at January levels . But market participants are skeptical that the deal would be effective without Iran's participation. Iran is expected to increase its production this year now that international sanctions have been lifted. Moderates and reformers won key seats in Iranian elections Sunday. Analysts say that could strengthen Iran's resolve to increase its oil production. "Iran appears to have supported what is seen as the moderate regime of President Rouhani who oversaw the nuclear negotiations," said Brown Brothers Harriman analysts in a note. "He cannot now offer to limit Iranian oil exports to participate in an effort to boost prices." Gasoline futures settled up 3.31 cents, or 3.3%, at $1.0497 a gallon. Prices fell 4.8% this month. Diesel futures rose 2.48 cents, or 2.4%, to $1.076 a gallon. Prices rose 2% this month. Georgi Kantchev and Anthony Harrup contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Supply & demand; Petroleum production
Location: United States--US
People: Novak, Alexander
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768548549
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768548549?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Current Oil Market Situation 'Unsustainable,' 'Unacceptable' -- Nigerian President; The current market situation in the oil industry "is unsustainable and totally unacceptable," Nigerian President Muhammadu Buhari said.
Author: Oredein, Obafemi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
Nigeria, Africa's biggest crude oil exporter, has seen its revenue fall drastically because of the crash in the price of oil, from which the country earns more than 90% of its foreign exchange and 70% of government revenue, according to the International Monetary Fund.
Full text: IBADAN, Nigeria--The current market situation in the oil industry "is unsustainable and totally unacceptable," as OPEC and non-OPEC members need to cooperate and find common ground to stabilize crude oil prices, Nigerian President Muhammadu Buhari said Sunday. Mr. Buhari was speaking at a bilateral meeting with Qatar Emir Sheik Tamim bin Hamad Al-Thani. "As members of [Organization of the Petroleum Exporting Countries] and Gas Exporting Countries Forum (GECF), our relations in the areas of oil and gas, which our two nations heavily rely on, need to be enhanced and coordinated for the benefit of our people. The current market situation in the oil industry is unsustainable and totally unacceptable," Mr. Buhari said, according to a statement from his office. Oil prices have plummeted 70% since mid-2014. "We must cooperate both within and outside our respective organizations to find a common ground to stabilize the market, which will be beneficial to our nations," the Nigerian leader said on the second day of his state visit to Qatar. Nigeria, Africa's biggest crude oil exporter, has seen its revenue fall drastically because of the crash in the price of oil, from which the country earns more than 90% of its foreign exchange and 70% of government revenue, according to the International Monetary Fund. The West African nation faces dwindling foreign-exchange earnings, which led the central bank in July to announce that it wouldn't allocate foreign exchange to importers of 41 items. Mr. Buhari praised the existing cordial bilateral relations between Nigeria and Qatar. He invited prospective Qatari investors to take advantage of the abundant opportunities in Nigeria and invest in energy, agriculture, real estate development, banking and finance. Last week, Mr. Buhari held talks with Saudi Arabia King Salman Bin Abdulaziz Al Saud in Riyadh on ways to achieve greater stability in the price of crude oil exports. Credit: By Obafemi Oredein
Subject: Petroleum industry; Crude oil prices; Crude oil
Location: Nigeria Qatar
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768548623
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768548623?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Eurozone Slides Back Into Deflation; Cheaper oil, sluggish economic growth weigh on prices
Author: Fairless, Tom; Hannon, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
ECB President Mario Draghi has said the central bank won't hesitate to act if it believes recent financial-market turmoil or lower oil prices will prevent it from reaching its inflation target of just below 2%.
Full text: The eurozone slid back into deflation in February as cheaper oil and sluggish economic growth weighed on prices, ramping up pressure on the European Central Bank to boost its stimulus next week. Consumer prices in the currency union fell by 0.2% from a year earlier in February, a sharper drop than economists had expected, after rising by 0.3% in the year to January, the European Union's statistics agency said on Monday. It was the first decline since September of last year. The ECB's governing council is set to meet on March 9 and 10 to decide how to combat persistently low inflation. ECB President Mario Draghi has said the central bank won't hesitate to act if it believes recent financial-market turmoil or lower oil prices will prevent it from reaching its inflation target of just below 2%. While the ECB can look beyond a short period of lower prices because its target is measured over the medium term, inflation has now been far below 2% for almost three years. Monday's data "pretty much seals the deal" on fresh ECB action next week, said Teunis Brosens, an analyst with ING in Amsterdam. Prices in the euro area previously fell between December 2014 and March 2015, prompting the ECB to announce a program of government bond purchases that it raised to [euro]1.5 trillion ($1.64 trillion) from [euro]1 trillion as recently as December 2015. The central bank has also lowered its deposit interest rate to minus 0.3%. A key concern at next week's ECB meeting will be whether cheaper oil is feeding through into wages and other prices, as people lower their expectations of future inflation. Such a development could spark a deflationary spiral of ever-lower prices that Mr. Draghi has said the central bank would definitely take action against. In that context the ECB will be "particularly alarmed" to see that core inflation, which strips out energy and food prices, fell to just 0.7% in February, its lowest level in 10 months, said Howard Archer, an economist at IHS Global Insight in London. "There is clearly a risk that mild eurozone deflation could prove persistent--particularly if eurozone economic activity continues to stutter," Mr. Archer said. Economic indicators are starting to flash red. A closely watched survey of purchasing managers last week indicated that eurozone growth probably slowed to its lowest level in over a year in February. A separate survey published by the European Commission showed economic sentiment at an eight-month low. The ECB will have new economic forecasts for 2016-18 in March that are expected to show inflation this year falling far below the 1.0% estimated in December, following another sharp drop in oil prices. Related * Fighting Deflation: ECB Needs Support in Lonely Battle The March meeting is shaping up to be a test of the ECB's credibility, analysts say, after it disappointed investors in December with a smaller-than-expected expansion of its stimulus. Most expect the central bank to cut further its already negative deposit rate--charged to banks for storing funds at the central bank--and accelerate its bond purchases. Still, some governing council members, notably Bundesbank President Jens Weidmann, have warned against overreacting to lower oil prices. Mr. Weidmann stressed last week that the economic outlook for the euro area was "not as bad as it is sometimes made out to be," and fears of ultralow inflation feeding back into wages and other prices were "far-fetched at the moment." However, Mr. Weidmann has only one voice on the 25-member governing council, albeit an influential one. His earlier objections to the launch of the bond-purchase program and its subsequent expansion last year were ultimately overruled. Write to Tom Fairless at tom.fairless@wsj.com and Paul Hannon at paul.hannon@wsj.com Credit: By Tom Fairless and Paul Hannon
Subject: Central banks; Euro; Councils; Eurozone; Economic forecasts
Company / organization: Name: European Commission; NAICS: 928120; Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 176854862 8
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768548628?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Pemex Cuts Spending to Shore Up Finances; The oil company will cut $5.5 billion from its budget in reaction to the drop in global oil prices
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexico's state oil company Petróleos Mexicanos, reeling from the drop in world oil prices, will cut 100 billion pesos ($5.5 billion) from its budget this year by deferring investments and reducing costs, Chief Executive José Antonio González Anaya said Monday. Pemex budgeted for an oil price of $50 a barrel this year and now estimates put a barrel of oil at an average of $25, Mr. González Anaya said in a conference call with analysts. "We have to adjust to the new realities of Pemex," he said. The moves would lower Pemex's total 2016 budget to 378 billion pesos from 478 billion pesos. Of the 100 billion pesos in cuts, 64.9 billion pesos will be in deferred investments, and 28.9 billion pesos in efficiencies and cost reductions. The plan also includes a reduction in capital expenditures and operating expenditures of 6.2 billion pesos in upstream operations. Of the deferred investments, 35.4 billion pesos will be in downstream activitiesand 27.5 billion pesos in exploration and production. "The adjustment doesn't weaken, but strengthens Pemex," said Mr. González Anaya, who was named early this month as chief executive . He said the company faces liquidity issues but not solvency problems. He said the program would lower investment in production that isn't profitable at current prices, and that deferred investments will pertain to longer-term projects. At a press conference, Mr. González Anaya said the impact on crude oil production is expected to be about 100,000 barrels a day on average, which would lower output to about 2.13 million barrels a day this year. The impact could be smaller if prices eventually rise, or if Pemex finds partners with which it could lower production costs of certain fields, he added. "The cuts were very much needed, everyone in the industry is doing it," said Pablo Medina, a Latin America upstream analyst at Wood Mackenzie. "Whenever you cut capex, future production is going to fall because those barrels aren't coming in the next year. If you go further into current fields, production is going to take a hit. That's how things work," Mr. Medina said. Wood Mackenzie expects Pemex's crude oil production to decline to around 2 million barrels a day in 2017 because many of its main projects are in a mature stage, he added. Mr. González Anaya said Pemex will use flexibility that it has under Mexico's new energy laws to form partnerships and will seek alternative financing for planned refinery upgrades. The company could use the new laws to reduce its financing needs in areas such as deep-water projects, which have long-term production outlooks, he added. He said that the budget cuts won't change Pemex's financing plan for 2016, which calls for net debt issuance of debt of around $15.7 billion, including foreign and domestic borrowing. Deputy Finance Minister Miguel Messmacher said the federal government, which has pledged to back Pemex with capital, will be working in coming weeks to determine how it will support the company. The budget measures are "a positive step to guarantee the sustainability of Pemex going forward," and serve as a starting point for discussions on strengthening its balance sheet, Mr. Messmacher said. Mr. Medina of Wood Mackenzie said in the longer term Pemex needs a lighter tax burden. The federal government's reliance on oil to fund its budgets has dropped substantially since a tax overhaul in 2014, but oil still accounts for around a fifth of revenue. Pemex reported an after-tax loss for 2015 of $30 billion, including a $9.8 billion loss in the fourth quarter. Sales last year fell 27% to $67.8 billion, while operating profit slumped 84% to $5.7 billion, including a $2.7 billion operating loss in the fourth quarter. Crude oil production last year was 6.7% lower at an average of 2.27 million barrels a day, while crude oil exports edged up 2.6% to 1.17 million barrels a day. Write to Anthony Harrup at anthony.harrup@wsj.com Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768607642
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768607642?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Tankers Wait to Unload Cargo in Rotterdam in Another Sign of Glut; Buyers and sellers increasingly send tankers on longer voyages to keep oil out of ports
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
More * Pressed, U.S. Oil Producers Cut Back * Exxon Mobil Sells Bonds But Cost Has Increased * The New Oil-Storage Space: Railcars * The Big New Threat to Oil Prices: A Glut of Gasoline * Oil Producers Should Rebalance Crude Markets, Says Iraq's Governor to OPEC Robert Dudley, chief executive of oil giant BP PLC, said earlier this month that in the second half of the year, "every storage tank and swimming pool in the world will be filled with oil."
Full text: LONDON--Up to 50 oil tankers are waiting to unload cargo in the port of Rotterdam, the highest number since 2009 and another sign that, amid a glut, crude is struggling to find a home. The unusually high number of ships idling outside of Europe's busiest port comes as onshore tanks around the world brim with crude and products like fuel or jet oil. That has sent buyers and sellers scrambling to find storage, using tankers and even empty railcars to stash the surplus . The glut is affecting shipping in other ways, as producers send ships carrying oil and oil products from the Middle East on longer routes to Europe to give their cargoes more time to find buyers. That is bad news for the oil market, adding further pressure on a commodity that has fallen to around $30 from more than $100 a barrel in 2014. Brent crude, the global benchmark, was trading at about $36.50 a barrel on Monday in London. There are currently between 40 and 50 tankers anchored in the waters outside Rotterdam, more than twice the usual number, said Sjaak Poppe, spokesman for the Dutch port. "Storage in the Rotterdam area is nearing its limits," he said. Crude stocks rose to 55.4 million barrels last week at a network of storage tanks in the Dutch ports of Amsterdam and Rotterdam and Belgium's Antwerp, a hub known as ARA, according to information provider Genscape. That is a 2.6% increase from a week earlier. More * Pressed, U.S. Oil Producers Cut Back * Exxon Mobil Sells Bonds But Cost Has Increased * The New Oil-Storage Space: Railcars * The Big New Threat to Oil Prices: A Glut of Gasoline * Oil Producers Should Rebalance Crude Markets, Says Iraq's Governor to OPEC Robert Dudley, chief executive of oil giant BP PLC, said earlier this month that in the second half of the year, "every storage tank and swimming pool in the world will be filled with oil." While crude stocks have fallen from a high reached last summer, they are 4.1 million barrels higher than the corresponding week last year, Genscape said. Stocks of gasoil, a petroleum product used for heating, reached a three-year high earlier this month. Despite signs that consumers are taking advantage of low prices and using more oil products, analysts say that the world is still producing more than a million barrels of crude oil above demand on any given day. The glut in Europe is diverting ships to take longer voyages, according to the U.S. Energy Information Administration. Ships coming from the Middle East and India have two options to get to ARA--a 15- to 20-day transit through the Suez Canal, or a 30- to 40-day journey around Africa's southernmost point, the Cape of Agulhas. With onshore storage near its limits and traders needing more time to find a buyer, cargoes are increasingly opting for the longer route. "This creates a logistical struggle, but there really isn't any urgency to take the shortest route in this market," said Olivier Jakob, director of Swiss-based consultancy Petromatrix. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Petroleum industry; Petroleum products
Location: Europe Middle East
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768626844
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768626844?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Streetwise; The Worst Market of All: One Without a Story; Stories about China, negative rates, tightening dollar liquidity, tumbling U.S. profits, impending recession, oil and more have left investors with no clear narrative to follow
Author: Mackintosh, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
None of this fits easily with the popular tale of woe for the global economy, impending doom for the economy of China, the world's biggest commodity consumer, or collapsing world trade, all of which should be bad for the price of industrial metals in particular and mining shares more generally. The "divergence trade" was predicated on the idea that with the U.S. Federal Reserve embarking on a tightening cycle and the Bank of Japan and European Central Bank both printing money, the greenback was sure to continue its rise against the yen and euro.
Full text: Markets don't just love a good tale, they need a good tale. There are happy stories for bulls, sad endings to cheer bears or sci-fi horrors about algorithms running wild. Investors devour them all. This year has provided too many interlocking story lines, though. Yarns have been spun about China, negative rates, tightening dollar liquidity, tumbling U.S. profits, impending recession, oil, sovereign-wealth funds, geopolitics and the rise of populist politicians. The problem is that all these plots and subplots left investors without a clear narrative to follow. No one can say what's going on, and investors have responded by reducing the risk they take. One response: The most popular trades went into sharp reverse, with some apparently perverse outcomes. Perhaps the best measure of the reverse is the impact on stocks popular with hedge funds. A Goldman Sachs index of the 50 U.S. shares most widely held by hedge funds just had its worst six-month underperformance since the financial crisis of 2008-09. It figures: The stocks least liked by hedge funds, as measured by another Goldman index, just recorded their best six-month relative return. Hedge funds borrow to invest, and have been reducing their debts as their managers worry about the uncertainties ahead. That means selling some of their favorite positions and closing short trades by buying back those stocks they had bet against. Selling by mutual funds and oil-fueled sovereign-wealth funds added to the pressures. The result was a violent shift: The big winners of 2015 became losers, and the most-hated stocks and sectors are now outperformers. Few stocks back up the story of lower leverage as much as the FANGs. The four stocks which led the U.S. market--and were loved by hedge funds--last year were Facebook, Amazon.com, Netflix and Google. This year only Facebook has beaten the broader market, with Amazon and Netflix both down more than 17% as of Friday. Biotechnology deserves a chapter to itself: After an extraordinary run-up in prices, U.S. biotech has just had its worst six-month performance since 2002 both in absolute and relative terms. The most-hated sector in 2015 was mining. MSCI data show that by mid-January of this year, the sector's market value had declined to a smaller percentage of global stocks since the dot-com bubble, when old-economy miners were out of fashion. From this low base, the sector rebounded a remarkable 30% in a month, with miners returning 10% this year, including dividends, making them by far the best-performing sector in the FTSE World index. Underlying the bounce is the return of hope for copper, iron ore and other metals, with the Bloomberg Industrial Metals spot index up slightly this year amid a giant swing in the positioning of speculators in futures. The closure of huge bets against copper helped support prices as speculators moved to become broadly neutral on the metal. None of this fits easily with the popular tale of woe for the global economy, impending doom for the economy of China, the world's biggest commodity consumer, or collapsing world trade, all of which should be bad for the price of industrial metals in particular and mining shares more generally. Furthermore, weaker prospects for the economy usually increase the rarity value, and share price, of companies able to increase sales whatever the economy does--companies like social media and biotech. Yet their shares have been battered. The dislocations in the markets do fit the story of investors reducing risk and leaving crowded trades. Of those, perhaps the most popular bet in the world was on the dollar. The "divergence trade" was predicated on the idea that with the U.S. Federal Reserve embarking on a tightening cycle and the Bank of Japan and European Central Bank both printing money, the greenback was sure to continue its rise against the yen and euro. It didn't. The dollar is now down almost 5% against the yen over the past year, its worst 12-month performance since the eurozone crisis four years ago. It is still up against the euro year over year, but down so far in 2016. Like miners and biotech, the valuation of the yen was especially stretched. Adjusted for inflation, the yen reached the weakest level against a basket of Japan's trading partners since 1972. Like a spring, the more stretched a valuation is, the harder it is to keep it extended. With hedge funds and investors no longer piling on the pressure, the yen snapped back hard. Some parts of the market weren't crowded with fast-money traders, and performed as would be expected from a slowing economy. So far this year, boring companies with reliable earnings and those with high-quality balance sheets have outperformed, while banks were pummeled. A new narrative is sure to engross investors again soon. Bulls are working on a modern fairy tale where America lifts the world economy by its bootstraps. A satire penned by the bears is proving popular, in which the world has hit its debt limit and rising U.S. interest rates kill financial markets. As a chronicle of this year's market, though, the story of risk reduction comes with the final chapter still unwritten. Hedge fund leverage has come down a long way, and anecdotal evidence suggests it may have stabilized or even be picking up a little. A happy ending is too much to ask for, but at least the heroine of this saga--your portfolio--has a chance. Credit: James Mackintosh
Subject: American dollar; Stock prices; Stock exchanges; Biotechnology; Metals; Social networks; Recessions; Hedge funds
Location: China United States--US
Company / organization: Name: Netflix Inc; NAICS: 532230, 518210, 443142; Name: Amazon.com Inc; NAICS: 454111; Name: Google Inc; NAICS: 519130; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768631431
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768631431?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon Offers $12 Billion Bond Issue; The oil company bond sale suggests steady investor appetite for debt from quality issuers
Author: Cherney, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
More * Pressed, U.S. Oil Producers Cut Back * Tankers Wait to Unload Oil * Banks Brace for Potential Energy Losses * Market Turmoil Eases, but Investors Remain Wary * Consumer-Focused Companies' Bonds Buck Drop by Their Stocks Exxon Mobil's borrowing costs relative to market benchmarks have risen since it sold bonds last year.
Full text: Exxon Mobil Corp., the oil giant that still has pristine triple-A ratings, sold $12 billion of new bonds Monday, one of the biggest corporate-debt deals of the year and a sign investors remain willing to lend to higher-quality companies despite concerns about global economic weakness. Financial markets have been roiled this year by anxiety over the pace of economic growth in China, a prolonged bust in commodity prices and concerns that the U.S. could be headed toward recession. The debt market, even for highly rated companies, was largely shut in the first part of February as U.S. stocks were hit with a selloff. But market tone has improved in recent weeks amid some more encouraging economic data about the strength of the U.S. consumer, a major driver of economic activity. Debt markets opened up again, allowing companies like Apple Inc. to sell new bonds, and the stock market has bounced back from its mid-February lows. Exxon Mobil's debt sale indicates the bond boom of recent years isn't letting up yet, and that the debt markets still are available for highly rated companies that need to sell bonds to pay for debt refinancing, capital spending or share buybacks. Several other firms sold bonds Monday, including Hyatt Hotels Corp. and SunTrust Banks Inc., according to S&P Capital IQ LCD. Still, the Exxon Mobil deal illustrates how the decline in energy prices since mid-2014 is hitting even the big multinational companies. More * Pressed, U.S. Oil Producers Cut Back * Tankers Wait to Unload Oil * Banks Brace for Potential Energy Losses * Market Turmoil Eases, but Investors Remain Wary * Consumer-Focused Companies' Bonds Buck Drop by Their Stocks Exxon Mobil's borrowing costs relative to market benchmarks have risen since it sold bonds last year. A 10-year bond, for example, was priced to yield 1.3 percentage points more than Treasurys, compared with 0.58 percentage point for a 10-year bond last year, according to S&P Capital IQ LCD. A higher gap in yield means that investors are demanding additional compensation to own the company's bonds. The company, which plans to use proceeds of its sale for general corporate purposes, is at risk of losing its triple-A rating. Standard & Poor's Ratings Services on Feb. 2 said it was reviewing the company's rating and could downgrade it by one notch within 90 days. On Feb. 25, Moody's Investors Service changed its outlook on the company to negative from stable, saying it expects low oil and gas prices to persist for the next few years, though it still affirmed the triple-A rating for now. A big company like Exxon Mobil can withstand an increase in borrowing costs or a small credit-rating downgrade. But lower-rated, financially strapped energy companies are finding investors reluctant to buy new bonds, sending the price of existing bonds tumbling and prompting some firms to file for bankruptcy. Others are seeking to restructure their debt loads to buy more time for oil prices to recover, but analysts expect defaults to increase in the coming months. Exxon Mobil's sale on Monday ties Apple Inc.'s debt deal as the second largest of the year, according to S&P Capital IQ LCD. They trail a $46 billion deal from Anheuser-Busch InBev NV, which sold the bonds in January to help pay for its acquisition of SABMiller PLC. Bank of America Merrill Lynch, Citigroup Inc. and J.P. Morgan Chase & Co. led Exxon Mobil's sale on Monday. Write to Mike Cherney at mike.cherney@wsj.com Credit: By Mike Cherney
Subject: Bond issues; Petroleum industry; Stock exchanges; Prices; Breweries; Investments; Capital expenditures; Bond ratings; Energy industry
Location: United States--US China
Company / organization: Name: Hyatt Hotels Corp; NAICS: 721110; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450; Name: SunTrust Banks Inc; NAICS: 551111; Name: Apple Inc; NAICS: 511210, 334111, 334220
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768633249
Document URL: https://login.ezproxy.uta.edu/login?url=https://search.proq uest.com/docview/1768633249?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Marathon Oil to Sell Stock to Shore Up Balance Sheet; Company to sell as much as $1.23 billion of stock
Author: Beckerman, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
Related * Marathon Oil Slashes Capital Spending Amid First Annual Loss in 20 Years Within the past two weeks, Energen Corp., QEP Resources Inc., Cabot Oil & Gas Corp. and Devon Energy Corp. have increased public stock offerings.
Full text: Marathon Oil Corp. plans to sell as much as about $1.23 billion of stock, based on Monday's closing price, intending to use proceeds to strengthen its balance sheet and fund part of its capital program. While the industry has suffered from a severe, prolonged downturn in energy prices, several energy producers have been successful in their efforts to raise cash in stock offerings. Related * Marathon Oil Slashes Capital Spending Amid First Annual Loss in 20 Years Within the past two weeks, Energen Corp., QEP Resources Inc., Cabot Oil & Gas Corp. and Devon Energy Corp. have increased public stock offerings. In after-hours trading, Marathon shares fell 4% to $7.88. Shares of the company have declined by more than half over the past three months. The company intends to sell 135 million shares, plus up to 20.25 million additional shares in an overallotment. In February, Marathon reported its first annual loss in 20 years. The Houston exploration and production company announced a $1.4 billion capital program for 2016, compared with $3 billion in 2015. Write to Josh Beckerman at josh.beckerman@wsj.com Credit: By Josh Beckerman
Subject: Acquisitions & mergers; Financial performance; Petroleum industry; Capital expenditures
Company / organization: Name: Cabot Oil & Gas Corp; NAICS: 211111; Name: Energen Corp; NAICS: 561210, 221210; Name: Marathon Oil Corp; NAICS: 486110, 324110, 211111, 213112; Name: Devon Energy Corp; NAICS: 211111; Name: QEP Resources Inc; NAICS: 211111, 211112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768692857
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768692857?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Hertz Swings to Profit but Cuts 2016 Outlook; Cites weakness in U.S. car rental and upstream oil and gas markets
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Feb 2016: n/a.
Abstract:
Hertz Global Holdings Inc. swung to a profit in the fourth quarter but cut its projections for 2016, citing continued weakness in its U.S. car rental business and the energy sector, which has driven down demand for its rental equipment.
Full text: Hertz Global Holdings Inc. swung to a profit in the fourth quarter but cut its projections for 2016, citing continued weakness in its U.S. car rental business and the energy sector, which has driven down demand for its rental equipment. The Naples, Fla., company, which has been trying to turn around operations following a yearslong restatement of results over accounting errors, said Monday it plans to press on with its cost-cutting push, targeting $350 million in cuts this year. In 2015, it cut about $230 million in expenses, above its initial target. Shares, which have lost nearly two-thirds of their value over the last 12 months, rose 1.8% to $8.65 in after-hours trading Monday. For 2016, the car rental company projects adjusted corporate earnings before interest, taxes, depreciation and amortization of $1.6 billion to $1.7 billion with U.S. car rental revenue increasing 1.5% to 2.5%. That compares with its earlier view of $1.7 billion to $1.8 billion in adjusted Ebitda and a rental revenue increase of 2.5% to 3.5% in the U.S. The guidance includes $600 million to $650 million, down from $625 million to $675 million, from the equipment-rental business that it plans to spin off by midyear . In 2015, Hertz reported $1.49 billion in adjusted Ebitda while U.S. rental declined 3% to $6.29 billion. Hertz, which had to adjust financial results dating to 2011 after discovering a series of accounting errors, rents cars under the Hertz, Thrifty, Dollar and Firefly brands. Taking advantage of declining car ownership rates, Hertz has looked for growth in ride-sharing service providers. For example, last year it launched a pilot program in Last Vegas and Denver in which Hertz rented some of its cars to Lyft drivers at discounted rates. Over all, Hertz reported a profit of $70 million, or 16 cents a share, compared with a loss of $234 million, or 51 cents a share, a year earlier. Excluding certain items, Hertz reported a profit of 5 cents a share, compared with a year-earlier loss of 22 cents a share. Revenue fell 5.7% to $2.41 billion, with currency fluctuations lowering revenue by about $75 million, Hertz said. Analysts surveyed by Thomson Reuters had projected profit of 4 cents a share on $2.52 billion in revenue. In the latest period, domestic car-rental revenue, which accounts for the bulk of the company's revenue, fell 5% to $1.41 billion. Write to Maria Armental at maria.armental@wsj.com Credit: By Maria Armental
Subject: Automobile rentals
Location: United States--US
Company / organization: Name: Hertz Global Holdings Inc; NAICS: 532111, 551112; Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Feb 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768693879
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768693879?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Streetwise; The Worst Market of All: One Without a Story; Stories about China, negative rates, tightening dollar liquidity, tumbling U.S. profits, impending recession, oil and more have left investors with no clear narrative to follow
Author: Mackintosh, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Mar 2016: n/a.
Abstract:
None of this fits easily with the popular tale of woe for the global economy, impending doom for the economy of China, the world's biggest commodity consumer, or collapsing world trade, all of which should be bad for the price of industrial metals in particular and mining shares more generally. The "divergence trade" was predicated on the idea that with the U.S. Federal Reserve embarking on a tightening cycle and the Bank of Japan and European Central Bank both printing money, the greenback was sure to continue its rise against the yen and euro.
Full text: Markets don't just love a good tale, they need a good tale. There are happy stories for bulls, sad endings to cheer bears or sci-fi horrors about algorithms running wild. Investors devour them all. This year has provided too many interlocking story lines, though. Yarns have been spun about China, negative rates, tightening dollar liquidity, tumbling U.S. profits, impending recession, oil, sovereign-wealth funds, geopolitics and the rise of populist politicians. The problem is that all these plots and subplots left investors without a clear narrative to follow. No one can say what's going on, and investors have responded by reducing the risk they take. One response: The most popular trades went into sharp reverse, with some apparently perverse outcomes. Perhaps the best measure of the reverse is the impact on stocks popular with hedge funds. A Goldman Sachs index of the 50 U.S. shares most widely held by hedge funds just had its worst six-month underperformance since the financial crisis of 2008-09. It figures: The stocks least liked by hedge funds, as measured by another Goldman index, just recorded their best six-month relative return. Hedge funds borrow to invest, and have been reducing their debts as their managers worry about the uncertainties ahead. That means selling some of their favorite positions and closing short trades by buying back those stocks they had bet against. Selling by mutual funds and oil-fueled sovereign-wealth funds added to the pressures. The result was a violent shift: The big winners of 2015 became losers, and the most-hated stocks and sectors are now outperformers. Few stocks back up the story of lower leverage as much as the FANGs. The four stocks which led the U.S. market--and were loved by hedge funds--last year were Facebook, Amazon.com, Netflix and Google. This year only Facebook has beaten the broader market, with Amazon and Netflix both down more than 17% as of Friday. Biotechnology deserves a chapter to itself: After an extraordinary run-up in prices, U.S. biotech has just had its worst six-month performance since 2002 both in absolute and relative terms. The most-hated sector in 2015 was mining. MSCI data show that by mid-January of this year, the sector's market value had declined to a smaller percentage of global stocks since the dot-com bubble, when old-economy miners were out of fashion. From this low base, the sector rebounded a remarkable 30% in a month, with miners returning 10% this year, including dividends, making them by far the best-performing sector in the FTSE World index. Underlying the bounce is the return of hope for copper, iron ore and other metals, with the Bloomberg Industrial Metals spot index up slightly this year amid a giant swing in the positioning of speculators in futures. The closure of huge bets against copper helped support prices as speculators moved to become broadly neutral on the metal. None of this fits easily with the popular tale of woe for the global economy, impending doom for the economy of China, the world's biggest commodity consumer, or collapsing world trade, all of which should be bad for the price of industrial metals in particular and mining shares more generally. Furthermore, weaker prospects for the economy usually increase the rarity value, and share price, of companies able to increase sales whatever the economy does--companies like social media and biotech. Yet their shares have been battered. The dislocations in the markets do fit the story of investors reducing risk and leaving crowded trades. Of those, perhaps the most popular bet in the world was on the dollar. The "divergence trade" was predicated on the idea that with the U.S. Federal Reserve embarking on a tightening cycle and the Bank of Japan and European Central Bank both printing money, the greenback was sure to continue its rise against the yen and euro. It didn't. The dollar is now down almost 5% against the yen over the past year, its worst 12-month performance since the eurozone crisis four years ago. It is still up against the euro year over year, but down so far in 2016. Like miners and biotech, the valuation of the yen was especially stretched. Adjusted for inflation, the yen reached the weakest level against a basket of Japan's trading partners since 1972. Like a spring, the more stretched a valuation is, the harder it is to keep it extended. With hedge funds and investors no longer piling on the pressure, the yen snapped back hard. Some parts of the market weren't crowded with fast-money traders, and performed as would be expected from a slowing economy. So far this year, boring companies with reliable earnings and those with high-quality balance sheets have outperformed, while banks were pummeled. A new narrative is sure to engross investors again soon. Bulls are working on a modern fairy tale where America lifts the world economy by its bootstraps. A satire penned by the bears is proving popular, in which the world has hit its debt limit and rising U.S. interest rates kill financial markets. As a chronicle of this year's market, though, the story of risk reduction comes with the final chapter still unwritten. Hedge fund leverage has come down a long way, and anecdotal evidence suggests it may have stabilized or even be picking up a little. A happy ending is too much to ask for, but at least the heroine of this saga--your portfolio--has a chance. Write to James Mackintosh at James.Mackintosh@wsj.com Credit: By James Mackintosh
Subject: American dollar; Stock prices; Stock exchanges; Biotechnology; Metals; Social networks; Recessions; Hedge funds
Location: China United States--US
Company / organization: Name: Netflix Inc; NAICS: 532230, 518210, 443142; Name: Amazon.com Inc; NAICS: 454111; Name: Google Inc; NAICS: 519130; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768696509
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768696509?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Crude Oil Prices Fall as China Manufacturing Data Disappoint; May Brent crude on London's ICE Futures exchange fell $0.22 to $36.35 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Mar 2016: n/a.
Abstract:
Oil prices rose overnight after China's central bank lowered the amount of deposits that banks must hold in reserve by 0.5 percentage point late Monday, a sign the world's second-biggest economy is seeking ways to prop up its slowing economy.
Full text: Crude-oil prices were lower in early Asia trade Tuesday, after China's official manufacturing data showed a seventh consecutive contraction in February, deepening concerns that oil demand from the world's second-largest economy will slow. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $33.61 a barrel at 0219 GMT, down $0.14 in the Globex electronic session. May Brent crude on London's ICE Futures exchange fell $0.22 to $36.35 a barrel. China's official manufacturing purchasing managers' index, a gauge of the nation's factory activity, fell to 49.0 in February from 49.4 a month earlier, official data from the National Bureau of Statistics showed. A PMI reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 points to a contraction. However, some economists cautioned that seasonal factors were likely in play as most factories were closed for a week in February during the Lunar New Year break. "Slowing manufacturing activities in China will definitely weigh on sentiment," said Stuart Ive, a client manager at OM Financial. China's aggressive consumption of oil has been a bright spot in the gloomy oil market. But as China moves gradually from a heavy industry-based economy to a more service-oriented one, analysts say the country's oil-demand growth will weaken. CLSA estimates China's crude-oil imports will likely rise at least 6% this year, slowing from the 8.8% growth in 2015. However, some analysts say China is still largely a manufacturing economy. They expect Chinese refiners and factory owners to take advantage of low oil prices, which could help support China's demand for foreign oil. "Chinese independent refiners are in the midst of hiking output, seizing the [relatively new] opportunity to process imported crude at the expense of fuel oil as a feedstock," said consulting firm JBC Energy in a report. Daniel Ang, an energy analyst at Phillip Futures, said profit-taking after the overnight rally also contributed to the decline. Oil prices rose overnight after China's central bank lowered the amount of deposits that banks must hold in reserve by 0.5 percentage point late Monday, a sign the world's second-biggest economy is seeking ways to prop up its slowing economy. "This move, highlighting People's Bank of China's priority on economic growth and its equity market, has in turn suggested that China's demand for commodities, especially crude oil, base metals and gold, will remain healthy in 2016," said OCBC in a note. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--fell 54 points to $1.3153 a gallon, while April diesel traded at $1.0905, 32 points lower. ICE gasoil for March changed hands at $319.25 a metric ton, down $5.25 from Monday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Manufacturing; Petroleum industry; Factories; Futures; Crude oil prices; Economic growth
Location: Asia China
Company / organization: Name: Peoples Bank of China; NAICS: 521110; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768701968
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768701968?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Finance: Exxon Mobil Sells Bonds But Cost Has Increased
Author: Cherney, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Mar 2016: C.3.
Abstract:
Exxon Mobil Corp., the oil giant that still has pristine triple-A ratings, sold $12 billion of new bonds Monday, one of the biggest corporate-debt deals of the year and a sign investors remain willing to lend to higher-quality companies despite concerns about global economic weakness.
Full text: Exxon Mobil Corp., the oil giant that still has pristine triple-A ratings, sold $12 billion of new bonds Monday, one of the biggest corporate-debt deals of the year and a sign investors remain willing to lend to higher-quality companies despite concerns about global economic weakness. Financial markets have been roiled this year by anxiety over the pace of economic growth in China, a prolonged bust in commodity prices and concerns that the U.S. could be headed toward recession. The debt market, even for highly rated companies, was largely shut in the first part of February as U.S. stocks were hit with a selloff. But market tone has improved in recent weeks amid some more encouraging economic data about the strength of the U.S. consumer, a major driver of economic activity. Debt markets opened up again, allowing companies like Apple Inc. to sell new bonds, and the stock market has bounced back from its mid-February lows. Exxon Mobil's debt sale indicates the bond boom of recent years isn't letting up yet, and that the debt markets still are available for highly rated companies that need to sell bonds to pay for debt refinancing, capital spending or share buybacks. Several other firms sold bonds Monday, including Hyatt Hotels Corp. and SunTrust Banks Inc., according to S&P Capital IQ LCD. Still, the Exxon Mobil deal illustrates how the decline in energy prices since mid-2014 is hitting even the big multinational companies. Exxon Mobil's borrowing costs relative to market benchmarks have risen since it sold bonds last year. A 10-year bond, for example, was priced to yield 1.3 percentage points more than Treasurys, compared with 0.58 percentage point for a 10-year bond last year, according to S&P Capital IQ LCD. A higher gap in yield means that investors are demanding additional compensation to own the company's bonds. The company, which plans to use proceeds of its sale for general corporate purposes, is at risk of losing its triple-A rating. Standard & Poor's Ratings Services on Feb. 2 said it was reviewing the company's rating and could downgrade it by one notch within 90 days. On Feb. 25, Moody's Investors Service changed its outlook on the company to negative from stable, saying it expects low oil and gas prices to persist for the next few years, though it still affirmed the triple-A rating for now. A big company like Exxon Mobil can withstand an increase in borrowing costs or a small credit-rating downgrade. But lower-rated, financially strapped energy companies are finding investors reluctant to buy new bonds, sending the price of existing bonds tumbling and prompting some firms to file for bankruptcy. Others are seeking to restructure their debt loads to buy more time for oil prices to recover, but analysts expect defaults to increase in the coming months. Exxon Mobil's sale on Monday ties Apple Inc.'s debt deal as the second largest of the year, according to S&P Capital IQ LCD. They trail a $46 billion deal from Anheuser-Busch InBev NV, which sold the bonds in January to help pay for its acquisition of SABMiller PLC. Bank of America Merrill Lynch, Citigroup Inc. and J.P. Morgan Chase & Co. led Exxon Mobil's sale on Monday. Credit: By Mike Cherney
Subject: Bond issues; Petroleum industry
Location: United States--US
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Classification: 8510: Petroleum industry; 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: Mar 1, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768780015
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768780015?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Hits Two-Month High on Talk of Output Agreement; Major players speak of 'critical mass' agreeing to freeze oil production
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Mar 2016: n/a.
Abstract:
Analysts surveyed by The Wall Street Journal expect the Energy Information Administration to report Wednesday that crude stockpiles rose by 2.6 million barrels in the week ended Feb. 26, while supplies of gasoline and distillates, including heating oil and diesel fuel, fell.
Full text: NEW YORK--Oil markets rose to a two-month high Tuesday as traders focused on the possibility of an output agreement among large producers. Russia's energy minister said Tuesday that a "critical mass" of oil-producing countries had agreed to freeze oil production, state news agency TASS reported. Russia, Saudi Arabia, Venezuela and Qatar announced last month that they were willing to freeze production at January levels. Other countries in Africa, Latin America and the Persian Gulf have expressed optimism about joining the deal. Russia and Venezuela said last week they are planning a broad meeting of producers in mid-March. The United Arab Emirates' energy minister said Tuesday that "everyone should move toward freezing production whether they like it or not," due to current low oil prices, according to the country's state news agency. Related Coverage * 'Critical Mass' of Oil-Producing Countries Agree to Freeze Production * Global Stocks Edge Higher Light, sweet crude settled up 65 cents, or 1.9%, at $34.40 a barrel on the New York Mercantile Exchange, the highest settlement since Jan. 5. Brent, the global benchmark, rose 24 cents, or 0.7%, to $36.81 a barrel on ICE Futures Europe, the highest level since Jan. 4. Market participants are unsure whether the measure would help shrink the global glut of crude, as production was high in January and Iran hasn't said it would participate in the deal. Iran's oil output is expected to rise this year now that international sanctions were lifted. Traders are also waiting on weekly U.S. inventory data due Wednesday. U.S. crude stockpiles are at their highest level in more than 80 years, and another inventory increase could weigh on prices. Analysts surveyed by The Wall Street Journal expect the Energy Information Administration to report Wednesday that crude stockpiles rose by 2.6 million barrels in the week ended Feb. 26, while supplies of gasoline and distillates, including heating oil and diesel fuel, fell. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 9.9-million-barrel increase in crude supplies, a 2.2-million-barrel decrease in gasoline stocks and a 2.7-million-barrel rise in distillate inventories, according to market participants. Prices fell in late trading on the news. Global inventories of crude oil and refined products have climbed in recent months amid robust oil production. U.S. production has declined from a peak in April 2015, but more slowly than some investors initially expected. Companies have cut spending on new drilling but also increased the amount of crude they can pump at lower prices. Offshore production in the Gulf of Mexico has also increased as long-planned projects came online. The U.S. Energy Information Administration said late Monday that U.S. production fell by 43,000 barrels a day, or 0.5%, to 9.3 million barrels a day in December from the month before. That is a smaller decline than in the previous two months, when production fell by more than 70,000 barrels a day. "The resilience of North American shale oil production to low prices remains remarkable," said Norbert Ruecker, head of commodities research at Julius Baer, in a note. Still, Mr. Ruecker said he expects prices to rise in the coming months, and "last year's slump in drilling activity finally leads to less supply." U.S. production is expected to fall in 2016. The number of rigs drilling for oil has dropped 75% from a peak in October 2014, and a number of large companies have announced that they expect their production to fall this year. James Marson and Summer Said contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Supply & demand; Inventory; Petroleum production
Location: Qatar Iran Venezuela Russia United States--US Africa Latin America Persian Gulf Saudi Arabia
Company / organization: Name: Critical Mass; NAICS: 541810; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768839293
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768839293?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Tankers Wait to Unload Oil
Author: Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Mar 2016: C.4.
Abstract:
Crude stocks rose to 55.4 million barrels last week at a network of storage tanks in the Dutch ports of Amsterdam and Rotterdam and Belgium's Antwerp, a hub known as ARA, according to information provider Genscape.
Full text: As many as 50 oil tankers are waiting to unload cargo in the port of Rotterdam, the Netherlands, the highest number since 2009 and another sign that, amid a glut, crude is struggling to find a home. The unusually high number of ships idling outside Europe's busiest port comes as onshore tanks around the world brim with crude and products such as jet oil. That has sent buyers and sellers scrambling to find storage, using tankers and even empty railcars to stash the surplus. The glut is affecting shipping in other ways, as producers send ships carrying oil and oil products from the Mideast on longer routes to Europe to give their cargoes more time to find buyers. That adds further pressure on a commodity that has fallen recently to around $30 a barrel from over $100 in 2014. Brent crude, the global benchmark, settled at $35.97 a barrelMonday. There are between 40 and 50 tankers anchored in the waters outside Rotterdam, more than twice the usual number, said Sjaak Poppe, spokesman for the Dutch port. "Storage in the Rotterdam area is nearing its limits," he said. Crude stocks rose to 55.4 million barrels last week at a network of storage tanks in the Dutch ports of Amsterdam and Rotterdam and Belgium's Antwerp, a hub known as ARA, according to information provider Genscape. That is a 2.6% increase from a week earlier. While crude stocks have fallen from a high reached last summer, they are 4.1 million barrels higher than the corresponding week last year, Genscape said. Stocks of gas oil, a petroleum product used for heating, reached a three-year high earlier this month. Despite signs consumers are taking advantage of low prices and using more oil products, analysts say the world is producing over a million barrels of crude above demand on any given day. The glut in Europe is diverting ships to take longer voyages, according to the U.S. Energy Information Administration. Ships coming from the Mideast and India have two options to get to ARA: a 15- to 20-day transit through the Suez Canal or a 30- to 40-day journey around Africa's southernmost point, the Cape of Agulhas. Cargoes are increasingly taking the longer route. Credit: By Georgi Kantchev
Subject: Commodity prices; Crude oil
Classification: 8510: Petroleum industry; 3400: Investment analysis & personal finance; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 1, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspaper s
Language of publication: English
Document type: News
ProQuest document ID: 1768850133
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768850133?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Anadarko Slashes Capital Spending Budget for 2016; The oil-and-gas producer also plans asset sales of as much as $3 billion this year amid efforts to improve its balance sheet
Author: Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Mar 2016: n/a.
Abstract:
In prepared remarks, Chairman and Chief Executive Al Walker said the company expects its cash position to be strengthened during the year though substantial cost reductions, asset sales and the company's dividend cut, which was unveiled in early February.
Full text: Anadarko Petroleum Corp. plans to slash capital spending for 2016 by nearly half, joining a long list of energy companies reining in budgets amid efforts to ride out the commodities downturn. The company's shares, down 54% in the past 12 months, rose 2.9% to $39.04 in recent trading. The Houston oil-and-gas producer also said it plans asset sales of as much as $3 billion this year amid efforts to improve its balance sheet. The planned asset sales include $1.3 billion in asset monetizations unveiled last week. Previous Coverage * Anadarko Petroleum Slashes Dividend by 81% (Feb. 9) * Anadarko Raises Output Guidance, to Cut Capex(Dec. 17, 2015) * Anadarko Sees Lower 2015 Capital Spending, Rig Activity (March 3, 2015) The company provided details about its plans for the year in conjunction with its 2016 investor conference call. In prepared remarks, Chairman and Chief Executive Al Walker said the company expects its cash position to be strengthened during the year though substantial cost reductions, asset sales and the company's dividend cut, which was unveiled in early February. The company projected capital expenditures of between $2.6 billion and $2.8 billion for 2016, compared with roughly $5.4 billion in 2015. The biggest cuts are expected in Anadarko's U.S. onshore operations, with capital spending down roughly 70% to about $1.2 billion. The company said it is cutting its U.S. onshore rig count by 80% to five this year, compared with an average of 25 in 2015. The company said it plans to focus on roughly 230 drilled but intentionally uncompleted wells. Write to Tess Stynes at tess.stynes@wsj.com Credit: By Tess Stynes
Subject: Petroleum industry; Capital expenditures; Financial performance
Location: United States--US
Company / organization: Name: Anadarko Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768913954
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768913954?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Production Freeze Countries Reach 'Critical Mass': Russian Energy Minister; Producers aim to stabilize the price of oil around $50-$60 a barrel
Author: Marson, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Mar 2016: n/a.
Abstract:
Energy Minister Alexander Novak said after a meeting with President Vladimir Putin and top Russian oil executives that countries producing 73% of the world's oil had agreed to the tentative deal, brokered earlier this month by Russia and Saudi Arabia and aimed at supporting the oil price.
Full text: MOSCOW--Russia's energy minister said Tuesday that a "critical mass" of oil-producing countries had agreed to freeze oil production, and that a final decision on such a measure would be taken this month, state news agency TASS reported. Energy Minister Alexander Novak said after a meeting with President Vladimir Putin and top Russian oil executives that countries producing 73% of the world's oil had agreed to the tentative deal, brokered earlier this month by Russia and Saudi Arabia and aimed at supporting the oil price. He said that capping oil production would prove effective even without Iran, which hasn't said it would take part. Mr. Novak said talks were continuing on how to monitor implementation of the production freeze. He said the aim was to stabilize the price of oil around $50-$60 per barrel, as any higher price would again create excess supply. Write to James Marson at james.marson@wsj.com Credit: By James Marson
Subject: Petroleum industry; Energy economics; Petroleum production
Location: Iran Russia Saudi Arabia
People: Putin, Vladimir Novak, Alexander
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1768979384
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1768979384?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Analysts Forecast 2.6 Million-Barrel Rise in Crude-Oil Inventories
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Mar 2016: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a large, 9.9-million-barrel surge in crude supplies, a 2.2-million-barrel decrease in gasoline stocks and a 2.7-million-barrel rise in distillate inventories, according to market participants.
Full text: NEW YORK--U.S. crude-oil stocks are expected to increase in data due Wednesday from the Department of Energy, according to a survey of analysts by The Wall Street Journal. Estimates from 11 analysts surveyed showed that U.S. oil inventories are projected to have risen by 2.6 million barrels, on average, in the week ended Feb. 26. Nine analysts expect stockpiles to rise, while two expect a fall. Forecasts range from a rise of 5 million barrels to a drop of 3 million barrels. The closely watched survey from the Energy Information Administration is due at 10:30 a.m. EST Wednesday. Gasoline stockpiles are expected to fall by 1.5 million barrels, according to analysts. Ten analysts expect a drop, with one expecting a gain. Estimates range from a rise of 1.5 million barrels to a drop of 2.7 million barrels. Stocks of distillates, which include heating oil and diesel, are expected to fall by 1.3 million barrels. Ten analysts expect a decline, while one sees a rise. Forecasts range from a rise of 300,000 barrels to a drop of 3 million barrels. Refinery use is seen falling 0.3 percentage point to 87% of capacity, based on EIA data. Six analysts expect a decline, while two see a rise, one expects no change and two didn't provide an estimate. Forecasts range from an increase of 0.5 point to a fall of 1.0 point. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a large, 9.9-million-barrel surge in crude supplies, a 2.2-million-barrel decrease in gasoline stocks and a 2.7-million-barrel rise in distillate inventories, according to market participants. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Inventory
Location: United States--US
Company / organization: Name: Department of Energy; NAICS: 926130; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769006499
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769006499?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
'Critical Mass' of Oil-Producing Countries Agree to Freeze Production; Russian Energy Minister Alexander Novak said countries producing 73% of the world's oil agreed to the tentative deal
Author: Marson, James; Said, Summer; Peker, Emre
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Mar 2016: n/a.
Abstract:
After meeting with President Vladimir Putin and top Russian oil executives, Energy Minister Alexander Novak said countries producing 73% of the world's oil had agreed to the tentative deal , according to state news agency TASS.
Full text: MOSCOW--A "critical mass" of oil-producing countries have agreed to freeze oil production, Russia's energy minister said Tuesday, as African, Latin American and Persian Gulf producers expressed optimism about joining the deal. After meeting with President Vladimir Putin and top Russian oil executives, Energy Minister Alexander Novak said countries producing 73% of the world's oil had agreed to the tentative deal , according to state news agency TASS. Mr. Novak said capping oil production would prove effective even without Iran , which hasn't said it would take part. The deal was brokered in February in Doha among Russia and members of the Organization of the Petroleum Exporting Countries : Venezuela, Qatar and Saudi Arabia. Russia and Venezuela said last week they were planning a broad meeting of producers in mid-March to expand the agreement to freeze their production. Mr. Novak said talks were continuing on how to monitor implementation of the production freeze. He said the aim was to stabilize the price of oil around $50-$60 per barrel, as any higher price would again create excess supply . Oil producers have turned to the concept of limiting their output to January levels as a form of action to boost prices that have fallen more than two-thirds since the middle of 2014. Saudi Arabia's oil minister Ali al-Naimi, the de facto leader of OPEC, has said outright supply cuts aren't on the table because producers don't trust each other. Oil supplies outpace demand by more than 1 million barrels on any given day, and billions of barrels of oil are being stored rather than consumed. The oil-production freeze has gained traction among a growing number of producers. In an interview Monday with CNBC, Nigeria's oil minister Emmanuel Ibe Kachikwu said the chances of a successful production freeze agreement are "very high." "In terms of the production freeze, we are working on the issue," Mr. Kachikwu said. "There is a lot of conversation going on, and I think there is a lot of consensus building on the issue of the freeze." Ecuador's President Rafael Correa said his country, Colombia and Mexico were among countries considering to join a producers' meeting due mid-March, according to state television there. Officials from Persian Gulf producers said they were expecting a majority of OPEC producers to freeze production, with the exception of Iran and Iraq. "It is necessary to reach an agreement on a production freeze" to fix the oil market and there are no calls to hold an emergency OPEC meeting, the United Arab Emirates' Energy Minister Suhail al-Mazrouei said, according to the country's state news agency. "I believe that current prices will force everyone to freeze production...everyone should move toward freezing production whether they like it or not." OPEC officials said they are still have major doubts on whether Russia will stick to its word, adding no location or date had been fixed. A production freeze, if implemented, would happen when countries are pumping at or near record levels, including Saudi Arabia and Russia. Excluding Iraq and Iran could also limit the freeze's effectiveness, as both countries have been racing to increase their output. An Iranian official on Tuesday reiterated the country's position that it would consider oil-production caps only after the country's output rises back to the levels before the West imposed sanctions over its nuclear program. Now that those sanctions have been lifted , Iran is trying to increase production by as much as 1 million barrels a day this year. Iran may increase oil production by another 500,000 barrels to about 3.9 million barrels per day by August, said Mehran Amirmoeini of the Institute for International Energy Studies, which is affiliated with Iran's oil ministry. Iran may then consider participating in negotiations with OPEC and Russia, he said. Benoit Faucon in London contributed to this article. Write to James Marson at james.marson@wsj.com , Summer Said at summer.said@wsj.com and Emre Peker at emre.peker@wsj.com Credit: By James Marson, Summer Said and Emre Peker
Subject: Petroleum industry; Agreements; Energy economics; Petroleum production
Location: Russia Iran Venezuela Saudi Arabia Persian Gulf
People: Correa, Rafael Kachikwu, Emmanuel Ibe Naimi, Ali I Putin, Vladimir
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 1, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769018421
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769018421?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Ex-Chesapeake Energy CEO Aubrey McClendon Indicted on Antitrust Charges; Justice Department alleges McClendon orchestrated conspiracy not to compete for oil and gas leases
Author: Harder, Amy; Kendall, Brent
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract:
The Justice Department said the charges were the first resulting from an ongoing federal antitrust investigation into price fixing, bid rigging and other possible anticompetitive actions in the oil and natural gas industry.
Full text: WASHINGTON--Aubrey McClendon, former CEO of Chesapeake Energy and one of the biggest names in the U.S. energy boom, was indicted Tuesday on charges of conspiring to rig bids for the purchase of oil and natural-gas leases. The Justice Department unveiled the charges Tuesday evening, alleging Mr. McClendon, who stepped down as the top executive of Chesapeake in 2013, orchestrated a conspiracy between two large oil and natural-gas companies to not bid against each other for the purchase of certain leases in northwest Oklahoma. Mr. McClendon didn't immediately respond to an email request for comment. Related: * For Chesapeake Energy, Hope Is the Strategy * Chesapeake's Woes Rattle Pipeline Partners * A Roller Coaster For Chesapeake Investors Mr. McClendon co-founded Chesapeake in 1989 and led the company until he was pushed out in 2013 by activist investors who had become concerned about his leadership and cash short-falls at the debt-laden company. Gordon Pennoyer, a spokesman for Chesapeake, said the company has been cooperating with the Justice Department "for some time," providing investigators with information on the company's leasing practices under Mr. McClendon. "Chesapeake does not expect to face criminal prosecution or fines relating to this matter," Mr. Pennoyer said, adding that the company has taken significant steps to address legacy issues and comply with laws and regulations. The under the alleged conspiracy, which ran between December 2007 and March 2012, it was decided ahead of time who would win the leases. The Justice Department didn't name anyone else it believed participated in the alleged conspiracy. Bill Baer, head of the department's antitrust division, said Mr. McClendon's actions "put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land." Mr. McClendon is now the head of American Energy Partners LP. The Justice Department said the charges were the first resulting from an ongoing federal antitrust investigation into price fixing, bid rigging and other possible anticompetitive actions in the oil and natural gas industry. Credit: By Amy Harder and Brent Kendall
Subject: Price fixing; Antitrust; Leases; Indictments
Location: United States--US Oklahoma
Company / organization: Name: American Energy Partners LP; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769071492
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769071492?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Slide as Overhang Worries Deepen; May Brent crude on London's ICE Futures exchange fell $0.17 to $36.64 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract:
Oil prices surged overnight to a two-month high on the rising possibility of a production freeze after Russia's energy minister said a "critical mass" of oil-producing countries--which together produce around 73% of the world's oil--had agreed to hold output at January levels, state news agency TASS reported.
Full text: Crude-oil prices pared gains in early Asia trade Wednesday on expectations for greater-than-expected growth in U.S. crude stockpiles last week. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $33.96 a barrel at 0207 GMT, down $0.44 in the Globex electronic session. May Brent crude on London's ICE Futures exchange fell $0.17 to $36.64 a barrel. Based on an estimate by industry group American Petroleum Institute, U.S. crude stocks likely grew by 9.9 million barrels in the week ended Feb. 26. The forecast is much larger than the 2.6 million-barrel expansion estimated by analysts in a Wall Street Journal survey. U.S. oil production has tapered gradually from a peak in April 2015, but the rate of decline has yet to materialize in a significant price recovery, as many shale producers remain resilient despite falling revenue. As of last week, total U.S. crude inventories stood at 507.6 million barrels, a fresh weekly high. Historical monthly data shows inventories last surpassed 500 million barrels in 1930. The official data will be released by the U.S. Department of Energy later Wednesday. "We'd also not assume that a smaller Department of Energy draw would receive bullish reception since any increase at all sets a new record," said Tim Evans, a Citi Futures analyst. Oil prices surged overnight to a two-month high on the rising possibility of a production freeze after Russia's energy minister said a "critical mass" of oil-producing countries--which together produce around 73% of the world's oil--had agreed to hold output at January levels, state news agency TASS reported. The pact, however, was conditional on the participation of other oil producers. Iran has reiterated that it won't join and will continue to pump until production returns to about 4 million barrels a day. Russia and Venezuela said last week they were planning a broad meeting of producers in mid-March to expand the agreement to freeze production. In an interview Monday with CNBC, Nigeria's oil minister, Emmanuel Ibe Kachikwu, said the chances of a successful production freeze agreement are "very high." Most market observers, however, say capping production at January levels won't result in any immediate impact on the glut because many producers were producing at a high level. Russia's January output reached record high of 10.88 million barrels. "The fact they have all come together is a step in the right direction," said Virendra Chandra, an Energy Aspects analyst. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--fell 17 points to $1.3018 a gallon, while April diesel traded at $1.0950, 45 points lower. ICE gasoil for March changed hands at $322.75 a metric ton, down $0.25 from Tuesday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Petroleum industry; Inventory; Futures; Crude oil prices; Petroleum production
Location: Russia United States--US Asia
People: Kachikwu, Emmanuel Ibe
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769101887
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769101887?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Stocks Edge Higher; Energy shares rally on higher oil prices
Author: Vaishampayan, Saumya
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract: None available.
Full text: U.S. stocks rose slightly Wednesday, as higher oil prices fueled a rally in energy shares. Stocks have rebounded since mid-February, as investors reassessed the health of the U.S. economy and a bounce in oil prices alleviated pressures on junk bonds and commodity-sensitive companies. What isn't clear is whether the stock-market recovery will turn into a sustained move higher. Underscoring the uncertainty, much of the rally has been driven by short-term investors covering bearish bets rather than by longer-term asset managers stepping in and buying stocks, traders say. The materials, industrials and energy sectors have gained the most over the past month, though earnings expectations for those sectors remain gloomy amid low oil prices. And even though stocks have tumbled from records, valuations remain elevated compared with long-run averages. "The overall sentiment on this bounce seems very weak," said Nathan Thooft, head of asset allocation at John Hancock Asset Management, adding that he doesn't expect stocks to advance much further. Read More * Some Funds Turning Bullish on Energy * Investors Turn Finicky on Corporate Bonds * The Real Reason ICE Covets the LSE While investors had been eager to snap up stocks after pullbacks in recent years, that has changed in recent months, Mr. Thooft said. "The market has moved from a 'buy the dip' mentality...to more of a 'sell the bounce' mentality," he said. On Wednesday, the Dow Jones Industrial Average added 34.24 points, or 0.2%, to 16899.32. The S&P 500 rose 8.10, or 0.4%, to 1986.45 and the Nasdaq Composite gained 13.83, or 0.3%, to 4703.42. U.S. crude-oil prices gyrated after data showed a surge in domestic crude stockpiles, settling 0.8% higher at $34.66 a barrel. Energy shares rose the most in the S&P 500, up 2.5%. Recent economic reports, including a better-than-expected reading on fourth-quarter growth, have added to optimism on the economy. "The stock market priced in a [U.S.] recession, and we're nowhere near a recession," said Kully Samra, U.K. managing director at Charles Schwab. Some investors say they are encouraged by the bounce in the Dow Jones Transportation Average, which tracks airlines, railroads and trucking companies in the U.S. The 20-stock index has recovered all of its losses this year, and now is up 0.1% in 2016. "You can't hide economic activity from transport stocks," said Art Hogan, chief market strategist at Wunderlich Securities. "If you're making goods and services, you have to get them somewhere." Data showing continued strength in the labor market attracted attention Wednesday, especially as investors search for clues about when the Federal Reserve will make its next interest-rate increase. The Fed considers employment and inflation data as it makes monetary-policy decisions. Private payrolls in the U.S. rose by 214,000 in February, according to payroll processor Automatic Data Processing Inc. and forecasting firm Moody's Analytics. Economists surveyed by The Wall Street Journal had expected a rise of 185,000. The Labor Department's February jobs report, set for release Friday, is forecast to show that employers added 200,000 jobs last month. "We need that Goldilocks number on Friday," said Chris Gaffney, president at EverBank World Markets. A headline number sharply above 200,000 could throw the prospect of a rate increase in the short term back on the table, catching many investors offside. On the other hand, a number below 150,000 could revive some fears about the strength of the U.S. economy, he added. Elsewhere, the Stoxx Europe 600 rose 0.7%, extending its rally to five consecutive sessions. European stocks have been bolstered by expectations of more stimulus from the European Central Bank at its meeting next week. Stocks in Japan and Shanghai rose by more than 4% on Wednesday, while shares in Australia gained 2%. Trading in haven assets was mixed. Treasury prices slipped, pushing the 10-year yield up to 1.848%, from 1.835% on Tuesday. The dollar fell 0.5% against the yen to ¥113.48. Gold rose 0.9% to $1,241.10 an ounce. In corporate news, Abercrombie & Fitch reported its first same-store sales gain in over three years as its quarterly profit soared 33%. Shares rose $1.27, or 4.4%, to $30.41. Monsanto cut the midpoint of its fiscal 2016 profit forecast by 11% but saw signs of stabilization in the weak farm economy. Its shares fell 7.19, or 7.8%, to 85.30. Riva Gold contributed to this article. In the Markets * Oil Prices Notch Gain Despite U.S. Stockpiles * Treasurys Lower on Strong Data * Gold Rises * Dollar Falls Ahead of Friday Jobs Report * Asian Shares Stage Big Rebound Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com Credit: By Saumya Vaishampayan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769384938
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769384938?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
ECB Ready to Boost Inflation With New Stimulus Measures, Says Bank of France Governor; ECB governing council member says inflation should become positive later this year as oil prices stabilize
Author: Dalton, Matthew
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract: None available.
Full text: PARIS--The European Central Bank is ready to roll out new stimulus measures to boost worryingly low inflation in the eurozone, Bank of France Governor François Villeroy de Galhau said on Wednesday. Those tools include targeted loans to commercials banks, more asset purchases and providing more detail about how long the ECB might keep interest rates at low levels, Mr. Villeroy de Galhau said in testimony to the French legislature. More * ECB's Mario Draghi Hints at More Stimulus in March (Jan.21, 2016) * ECB's Stimulus Moves Fall Short of Market Expectations, Hammering Stocks (Dec.3, 2015) The ECB has set the interest rate for banks to park money at the central bank at negative levels and is in the middle of buying hundreds of billions of euros of assets to boost prices. Yet inflation remains stubbornly low and has recently dipped into negative territory, pulled down by falling energy prices. Mr. Villeroy de Galhau, who is a member of the ECB's governing council, said the brief period of negative inflation doesn't herald the arrival of a more long-lasting period of falling prices. Inflation should become positive again later this year with the stabilization of oil prices, he said. But Mr. Villeroy de Galhau said the situation nevertheless warranted close attention by the central bank. "Falling oil prices can have more long-lasting effects, on the prices of other goods and services, as well as on the evolution of salaries," he said. "We are not in deflation, but we must avoid that expectations of future inflation don't become too pessimistic." "Negative interest rates, which have provoked many questions, are of course not a goal in themselves," Mr. Villeroy de Galhau said, "and the Eurosystem has at its disposition a suite of other tools." Write to Matthew Dalton at Matthew.Dalton@wsj.com Credit: By Matthew Dalton
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769403826
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769403826?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Look Past Bearish Data to Notch Gain; Total U.S. crude inventories grew by 10.4 million barrels last week, the EIA says
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract:
The U.S. Energy Information Administration said U.S. crude stocks grew by 10.4 million barrels last week, versus the 2.6-million-barrel expansion estimated by analysts in a Wall Street Journal poll.
Full text: Oil prices gyrated sharply Wednesday but ultimately ended higher after weekly U.S. government data showed a big increase in domestic crude stockpiles, with waning space available to store swelling supplies. The benchmark U.S. crude contract rose 0.8% to settle at $34.66 a barrel, and the global Brent benchmark rose 0.3% to $36.93 a barrel. It was the third straight gaining session for both contracts. U.S. prices fell as much as 2% immediately after the release of the U.S. data but quickly recovered and then wavered between gains and losses throughout the day. The U.S. Energy Information Administration said U.S. crude stocks grew by 10.4 million barrels last week, versus the 2.6-million-barrel expansion estimated by analysts in a Wall Street Journal poll. The data confirmed a larger-than-expected increase reported by the American Petroleum Institute late Tuesday, which said stockpiles grew by 9.9 million barrels. As of last week, total U.S. crude inventories stood at 518 million barrels, a weekly high. Historical monthly data show inventories last surpassed 500 million barrels in 1930. And inventories at the key U.S. storage hub in Cushing, Okla., rose to 66.3 million barrels, 90% of the region's storage capacity. But analysts and brokers said the market was looking past the immediate dire picture presented by the inventory report to focus on a hoped-for rebound as supply-and-demand fundamentals reach a nadir. Two other data points in the report reinforced bullish views: domestic U.S. production, which fell for the sixth consecutive week to 9.08 million barrels a day, and gasoline inventories, which suggested healthy demand with a 1.5-million barrel decline. "The market seems willing to shrug off bearish developments and push the upside," said Robert Yawger, director of the futures division at Mizuho Securities USA. U.S. oil production has tapered gradually from a peak last year, but many shale producers remain resilient despite falling revenue as they have increased their efficiency. Production is now down from 9.7 million in April last year. Oil prices have been supported in recent weeks by hopes that major suppliers would curtail their output in a bid to raise prices. Those hopes were reinforced Wednesday after Reuters reported that Saudi Arabia had reached out to banks to raise the possibility of arranging a loan for the country, a potential sign that continued low oil prices are weighing on its finances. Still, official selling prices released by the country Wednesday showed it was once again cutting prices for sales to the U.S., by 20 cents a barrel. On Tuesday, prices rose to a two-month high Tuesday after Russia's energy minister said a "critical mass" of oil-producing countries--which together produce around 73% of the world's oil--had agreed to hold output at January's levels. The pact, however, is conditional on the participation of other oil producers. Iran has confirmed that it won't join and will continue to pump until its production returns to about four million barrels a day. "The last lows were hit in January; the price of oil is higher by over $7 a barrel--a very good accomplishment based on the fact that OPEC has not yet done anything to change their strategy," said Dominick Chirichella, an analyst at the Energy Management Institute Market observers say capping production at January levels won't have any immediate impact on the supply glut because many countries were producing at high levels. Russia's January output reached record high of 10.88 million barrels. But even if the agreement succeeds in raising prices in the short term, analysts say the flexibility of the U.S. shale industry would prevent a sustained rebound. "The oil market has seemingly found its footing," said Seth Kleinman, analyst at Citi Research. But, he added, prices of over $40 a barrel "would prompt shale producers to reverse many of the production cuts that are supporting the rally." Jenny W. Hsu contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com and Jenny W. Hsu at jenny.hsu@wsj.com Credit: By Christian Berthelsen and Georgi Kantchev
Subject: Petroleum industry; Inventory; Petroleum production
Location: United States--US
Company / organization: Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769403865
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769403865?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Rises on Talk of Output Agreement
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Mar 2016: C.4.
Abstract:
Analysts surveyed by The Wall Street Journal expect the Energy Information Administration to report Wednesday that crude stockpiles rose by 2.6 million barrels in the week ended Feb. 26, while supplies of gasoline and distillates, including heating oil and diesel fuel, fell.
Full text: Oil markets rose to a nearly two-month high as traders focused on the possibility of an output agreement among large producers. Russia's energy minister said Tuesday that a "critical mass" of oil-producing countries had agreed to freeze oil production, state news agency TASS reported. Russia, Saudi Arabia, Venezuela and Qatar announced last month that they were willing to freeze production at January levels. Other countries in Africa, Latin America and the Persian Gulf have expressed optimism about joining the deal. Russia and Venezuela last week said they are planning a broad meeting of producers in mid-March. The United Arab Emirates' energy minister said Tuesday that "everyone should move toward freezing production whether they like it or not," due to current low oil prices, according to the country's state news agency. Light, sweet crude settled up 65 cents, or 1.9%, at $34.40 a barrel on the New York Mercantile Exchange, the highest settlement since Jan. 5. Brent, the global benchmark, rose 24 cents, or 0.7%, to $36.81 a barrel on ICE Futures Europe, the highest level since Jan. 4. Market participants are unsure whether the measure would help shrink the global glut of crude, as production was high in January and Iran hasn't said it would participate in the deal. Iran's oil output is expected to rise this year now that international sanctions were lifted. Traders also are waiting for weekly U.S. inventory data due Wednesday. U.S. crude stockpiles are at their highest level in more than 80 years, and another inventory increase could weigh on prices. Analysts surveyed by The Wall Street Journal expect the Energy Information Administration to report Wednesday that crude stockpiles rose by 2.6 million barrels in the week ended Feb. 26, while supplies of gasoline and distillates, including heating oil and diesel fuel, fell. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 9.9 million barrel increase in crude supplies, a 2.2 million barrel decrease in gasoline stocks and a 2.7 million barrel rise in distillate inventories, according to market participants. Prices fell in late trading on the news. Global inventories of crude oil and refined products have climbed in recent months amid robust oil production. U.S. production has declined from a peak in April 2015, but more slowly than some investors initially expected. Companies have cut spending on new drilling but also increased the amount of crude they can pump at lower prices. Offshore production in the Gulf of Mexico also has increased as long-planned projects came online. The U.S. Energy Information Administration said late Monday that U.S. production fell by 43,000 barrels a day, or 0.5%, to 9.3 million barrels a day in December from the month before. That is a smaller decline than in the previous two months, when production dropped by more than 70,000 barrels a day. "The resilience of North American shale-oil production to low prices remains remarkable," said Norbert Ruecker, head of commodities research at Julius Baer, in a note. Still, Mr. Ruecker said he expects prices to rise in coming months, and "last year's slump in drilling activity finally leads to less supply." Gasoline futures settled down 1.72 cents, or 1.3%, at $1.3035 a gallon. Diesel futures rose 0.58 cent, or 0.5%, to $1.0995 a gallon. --- James Marson and Summer Said contributed to this article. Credit: By Nicole Friedman
Subject: Commodity prices; Crude oil
Location: United States--US
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 2, 2016
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769404459
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769404459?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Hedge Funds Turn Bullish on Oil Despite Glut; Prices have rebounded in recent weeks on hopes major producers will cut output
Author: Fletcher, Laurence; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract: None available.
Full text: Several hedge funds are starting to bet that assets in the battered energy sector are through the worst of their dismal run. Oil is down nearly 70% since June 2014 and analysts say there are few signs that the global oversupply of crude will abate anytime soon. But some hedge-fund managers have recently started betting on rising oil prices or picking up the stocks or credit of battered energy firms, in the belief prices have dropped too far. "We turned bullish on energy two weeks ago," said Gennaro Pucci, founder of hedge fund PVE Capital LLP, which invests in credit and oversees more than $1 billion in assets. He said he had previously been betting on falling prices. Related Coverage * Oil Prices Fall on Surge in U.S. Stockpiles * 'Critical Mass' of Oil-Producing Countries Agree to Freeze Production (March 1) * Investor Shift: Hate the Oil, Love the Big Oil Company (Nov. 17, 2015) He added that he had bought the credit of firms including U.S. shale-oil producer Continental Resources, Inc. and pipeline operator Kinder Morgan, Inc. He pointed to "compelling valuations" and an oil price he believes will stabilize between $30 and $40. On Wednesday, Brent, the global price benchmark, was trading down 0.8% at 36.50 a barrel . Pierre Andurand, one of the world's top energy traders, who made big profits by correctly calling the plunge in oil prices in late 2014 , said in his latest letter to investors, reviewed by The Wall Street Journal, that he is "cautiously constructive on oil prices at the moment." Mr. Andurand, who is founder of London-based hedge fund Andurand Capital Management LLP, had last autumn predicted that oil could go as low as $25 a barrel, but said in a recent investor letter that he expects oil to end the year higher as inventory levels stabilize. A spokesman for Andurand declined to comment. His fund was up 5.2% in January, having gained 4.1% last year and 38.1% the previous year. Oil prices have rebounded in recent weeks from the decade-lows reached in January on hopes that major producers will cap their output. A persistent glut of crude has weighed on the market in the past two years, fueled by rising output from Saudi Arabia to Texas. Overall, bullish bets on Brent taken by hedge funds and other money managers rose 12.4% during the past week to their highest since 2011, according to the Commitment of Traders report from Intercontinental Exchange Inc. Investors are less optimistic on West Texas Intermediate, the U.S. oil gauge, where the number of bets on higher prices has barely ticked up this year. Meanwhile, the size of hedge fund bets on oil stocks rising rose 77% over the week to Feb. 18, the biggest gain in any sector, according a J.P. Morgan note to hedge funds clients reviewed by the Journal. The bet on energy is controversial, market participants say. Hedge funds raised billions of dollars to invest in distressed oil and gas companies after the oil price began to fall in 2014, but many such as Brigade Capital Management LP and King Street Capital Management LP suffered losses as the bets proved too early. Investors also bought into oil stocks late last year , hoping that moves to cut costs and spin off businesses signaled their share prices had bottomed, but the bet proved too early. Few in the market believe that oil's rebound will be a smooth ride. Worries about global growth engulfed financial markets early this year , adding to concerns about oil's longer-term oversupply. Storage tanks around the world are brimming with oil and many traders are scrambling to chart ships to use as floating storage, leaving key ports like Rotterdam, Europe's busiest, congested with oil tankers . "The consensus is that people are still pretty negative on oil in the near-term," said Robert Duggan, partner at SkyBridge Capital , which invests in hedge funds and manages $12.9 billion in assets. However, he added that betting against the oil price at such low levels had become "very hard" for hedge funds because of the potential for it suddenly to rise. Investment banks have been busy slashing their outlook for oil and expect prices to recover more slowly than previously anticipated. Thirteen banks polled by The Wall Street Journal last week predicted that Brent would average $39 a barrel this year, while WTI would average $38 a barrel. Both forecasts are down $11 from a survey in January. Still, many investors think this is the time to get back into the market. "The cheapest point is now," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, which oversees $125 billion in assets. He said that "the demand story is not one of a global recession" and said high seasonal demand should start in the spring as Americans use the cars they bought last year. "We are currently underweight on energy but are looking for opportunities to pinch assets," he said. London-based Ledbury Capital Partners has added to positions in stocks with large net cash positions such as Cairn Energy and Ophir Energy, said chief investment officer Michael Alsalem. "Energy companies are viewed as being all bad. People are throwing the baby out with the bathwater," he said. Others are sticking with long-held bullish views. Hedge-fund manager Jean-Louis Le Mee, whose firm Abydos Capital shut at the end of 2014 after he called the bottom of the market too early, is launching Westbrook Asset Management. The fund will bet on rising energy stocks and is aiming for a return of more than 100% over three years. "In the second half of the year the market looks a lot less oversupplied than in the first half," he said, adding that he expects oil to reach $75-80 in the next two-to-three years. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Laurence Fletcher and Georgi Kantchev
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769616652
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769616652?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World's Superrich Population Declines for First Time Since 2008; Number of individuals with at least $30 million in assets fell 3% in 2015, as collapse in oil prices takes its toll
Author: Patnaude, Art
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract:
The rise of the superrich over recent years has been a boon for real-estate markets, which have become a popular destination for investment. Since 2009, a quarter of global commercial property investment came from ultra-high-net-worth individuals , the Knight Frank report said.
Full text: The ranks of the global superrich shrank last year for the first time since 2008, a fresh signal that slower economic growth, stock market shocks and weak commodity prices have taken their toll. The number of individuals with $30 million or more in assets fell 3% in 2015 to about 187,000, according to a report from real-estate broker Knight Frank. The dip follows years of surging private wealth, with the global population of high-net-worth individuals growing 61% in the last 10 years, according to data in the report from New World Wealth. Stock market losses were a big driver of depreciating wealth, the report said. A collapse in oil prices hit the super wealthy in the Mideast and Africa, while currency fluctuations also played a role. Brazil saw a 12% drop in ultrahigh net worth individuals, the data show. In Saudi Arabia, the population of these individuals dropped 8%, Russia 5%, the U.S. 2% and China 1%. However the retreat is expected to be temporary. The number of superrich will rise 41% by 2025, although "the pace will be significantly slower than the previous 10 years," the report said. The rise of the superrich over recent years has been a boon for real-estate markets, which have become a popular destination for investment. Since 2009, a quarter of global commercial property investment came from ultra-high-net-worth individuals , the Knight Frank report said. "Private wealth investors have become far more sophisticated and considered, and are not just hunting for trophy assets," a Knight Frank statement said. "They view commercial property as tangible, controllable, not subject to daily pricing and giving real performance relative to other asset classes." Last year, the superrich pumped $178 billion into real estate. Hotels were the most popular investment. North America had the highest concentration of private investment. "The increase of inbound capital from Chinese and Middle Eastern investors has been a noticeable, contributing factor," Knight Frank said. North America has the highest number of ultrawealthy individuals with around 69,300, followed by Europe with 46,200 and Asia with 41,100. However, over the next decade, the balance is expected to shift, with Asia moving into second place. Write to Art Patnaude at art.patnaude@wsj.com Credit: By Art Patnaude
Subject: Investments; Statistical data; Securities markets; Wealth management
Location: Brazil Russia Africa China United States--US North America Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769713742
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769713742?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon Reaffirms Plans to Cut 2016 Capital Spending; Oil giant plans capital expenditures of roughly $23 billion this year
Author: Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract:
In prepared remarks Wednesday, Exxon Mobil Chairman and Chief Executive Rex W. Tillerson said, "We have the financial flexibility to pursue attractive opportunities and can adjust our investment program based on market demand fundamentals."
Full text: Exxon Mobil Corp. reaffirmed plans to cut capital spending 25% this year, as the oil giant met with analysts Wednesday in New York. The company's annual analyst meeting comes a month after Exxon Mobil posted its weakest annual results in more than a decade , making it one of several global oil giants to get smacked by a prolonged commodities rout. Exxon's annual earnings were cut in half to $16.2 billion, forcing the Irving, Texas, company to put its share-buyback plan on hold to preserve cash. Exxon Mobil on Wednesday reiterated that it plans capital expenditures of roughly $23 billion this year, down from a reduced $31.1 billion in 2015 . About a year ago, Exxon had projected its 2015 capital spending budget at $34 billion, a decline of 12% from 2014, but reined in spending as the year progressed. In prepared remarks Wednesday, Exxon Mobil Chairman and Chief Executive Rex W. Tillerson said, "We have the financial flexibility to pursue attractive opportunities and can adjust our investment program based on market demand fundamentals." The comment comes two days after Exxon Mobil on Monday sold $12 billion of new bonds , one of the biggest corporate-debt deals of the year and a sign investors remain willing to lend to higher-quality companies. However Exxon Mobil's borrowing costs relative to market benchmarks have risen since it sold bonds last year. Exxon Mobil also said it is on track to start up 10 exploration-and-production projects in 2016 and 2017, and that the company is advancing several projects in other business segments. The company also noted that its reduced its capital and operating costs by a net $12 billion last year, including a 9% decrease in unit costs in its exploration-and-production business. Write to Tess Stynes at tess.stynes@wsj.com Credit: By Tess Stynes
Subject: Petroleum industry; Capital expenditures; Financial performance
Location: Texas New York
People: Tillerson, Rex W
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769713961
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769713961?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited wit hout permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Why Big U.S. Banks Can Ride Out the Oil Bust; The biggest U.S. banks can weather even severe defaults by oil companies
Author: Back, Aaron
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract:
Consider that energy-sector exposures at the big four U.S. banks--J.P. Morgan Chase, Bank of America, Wells Fargo and Citigroup--range from roughly 1.5% to 3.5% of their total loan books, according to the banks' recent annual filings and other disclosures.
Full text: The energy meltdown has taken bank stocks hostage. Investors should cut them free. Fear that oil's crash will spawn losses that blow holes in big-bank balance sheets are somewhat understandable. It is tough to gauge exactly how exposed banks may be if oil-related firms start going belly up, and the information available isn't initially comforting. Consider that energy-sector exposures at the big four U.S. banks--J.P. Morgan Chase, Bank of America, Wells Fargo and Citigroup--range from roughly 1.5% to 3.5% of their total loan books, according to the banks' recent annual filings and other disclosures. That doesn't sound huge. But it doesn't include so-called "unfunded" exposure. This mainly refers to lines of credit extended to clients that haven't been tapped. Including these, total exposure is more than 2.5 times as large, or $186 billion in aggregate, for the big four. Fortunately for bank investors, this doesn't have to be such a big problem, especially considering the big banks' strengthened capital positions. Oil companies facing lean times have every incentive to draw on credit lines before resorting to more drastic measures like restructuring their debt. However, borrowers can't use up these loans automatically. Credit-line agreements typically come with covenants that allow banks to cut off a client in some kind of distress. What's more, credit lines to the energy sector are regularly reappraised against collateral, which mainly consists of oil reserves in the ground. Not that banks are immune to drawdowns: At J.P. Morgan's investor day last week, finance chief Marianne Lake said the bank's downside scenario for energy--oil prices of around $25 a barrel for 18 months, resulting in an extra $1.5 billion of provisions--assumes a "quite dramatic draw down" of credit lines . Even then, though, investors shouldn't be quick to panic. During the oil-price bust of the 1980s, bank write-offs peaked at about 10% to 15% of loans to companies in exploration and production as well as oil-field services. Integrated majors, which make up a sizable part of big banks' loans books, have better staying power. Assume then, that today's energy bust is just as bad as in the 1980s, but across the entire lending portfolio--an overly harsh scenario. Assume also that outstanding credit lines are fully tapped--also unlikely. Still, potential losses look painful but manageable. As a percentage of Tier 1 common equity, they would range from 3.6% at J.P. Morgan to 5.9% at Citigroup. And that would be in a worst-case scenario. The reality is likely to be far less onerous. Of course, banks could help themselves by providing more information than they do now about unfunded commitments and how likely they are to be drawn. As well, any hits or additional reserve build up will come at a time when bank earnings are already under extreme pressure from continued superlow interest rates--a far bigger problem than oil . But with big banks in many cases trading well below book value, share prices are assuming too dire an outcome. Write to Aaron Back at aaron.back@wsj.com Credit: By Aaron Back
Subject: Banking industry; Loans; Bank earnings; Lines of credit; Energy industry
People: Lake, Marianne
Company / organization: Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769750675
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769750675?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Nigerian Communities Can Sue Royal Dutch Shell Over Oil Spills, U.K. Court Says; The suits are the latest international litigation to face Shell for environmental damage stemming from its Nigerian operations
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract: None available.
Full text: LONDON--Two Nigerian communities can sue Royal Dutch Shell PLC's Nigerian unit in the U.K. over oil spills in the West African country, a London court ruled Wednesday, testing whether energy companies can be held liable in their home country for events elsewhere. The lawsuits, filed with the London High Court, are the latest international litigation to face Shell for environmental damage stemming from its Nigerian operations. The Anglo-Dutch company reached a £55 million ($77.4 million) settlement in a similar U.K. lawsuit brought by the Niger Delta-based Bodo community in January 2015. It also is being sued in the Netherlands in a separate case over Nigerian oil spills. The firm's local subsidiary, Shell Petroleum Development Company of Nigeria Limited, or SPDC, has been plagued by frequent spills that environmental groups and nongovernmental organizations say have destroyed Niger Delta fishing grounds and polluted water systems. According to figures published by Shell, oil spills from its operations in Nigeria amounted to around 48,000 tons between 2008 and 2014. Shell says the spills are primarily caused by oil thieves who sabotage pipelines. The company says it cleans up any environmental damage regardless of the cause. A spokesperson for SPDC said in an email Wednesday that the cases should be tried in Nigeria and that it would challenge the jurisdiction of English courts. "We believe that allegations concerning Nigerian plaintiffs in dispute with a Nigerian company, over issues which took place within Nigeria, should be heard in Nigeria," the email said. The communities' lawyers said they are suing in the U.K. because the oil spills have persisted for decades in Nigeria without being addressed. "The Nigerian courts can't deal with these cases," said Daniel Leader, a partner at law firm Leigh Day, which is representing the communities. "This would clearly be a very important precedent because it would mean that Shell could be held to account, not only in Nigeria, but also in the jurisdiction of the parent company for its environmental record." This isn't the first time African communities have looked to international courts in environmental cases. In the Netherlands, a Dutch appeals court ruled in December that four Nigerian farmers and Friends of the Earth Netherlands could sue Shell there in relation to separate oil spills. Shell has operated in Nigeria for nearly 80 years and SPDC produces around 39% of Nigeria's oil, pumping it through a web of pipelines in the oil-rich Niger Delta. The new cases against Shell in London relate to the Ogale and Bille communities in the Niger Delta. The Ogale community alleges that it has been subject to repeated oil spills since at least 1989 that have destroyed farming and fishing in the area and left the community without clean drinking water. The community is located in an area known as Ogoniland where Shell was forced to abandon production in 1993 because of community protests, but a 2011 UN investigation found the area remained seriously polluted. "We hope at last this case will force Shell clean up," Ogale's ruler Emere Godwin Bebe Okpabi said in a press release issued by Leigh Day. In Bille, the community's lawyers say oil leaks from a Shell pipeline have damaged thousands of hectares of mangrove and destroyed the fishing grounds they rely on for their livelihood. The SPDC statement Wednesday said both Bille and Ogale are in areas heavily affected by oil theft and pipeline sabotage and that its access to Ogale has been limited by violence and threats to staff in the area. The company said it is also working with the Nigerian government and other stakeholders to address the recommendations made in the 2011 UN report. Idris Musa, the director for oil field assessment at Nigeria's National Oil Spill Detection and Response Agency, declined to comment on the case. A spokesman for Nigeria's state oil company, the Nigerian National Petroleum Co. wasn't immediately able to comment. Benoit Faucon contributed to this article. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769823047
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769823047?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Bust Forces West Texas to Adjust; Small businesses cut costs, lower prices as energy downturn grinds on
Author: Simon, Ruth
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Mar 2016: n/a.
Abstract:
According to small business loan tracker PayNet Inc., about 2.2% of small business loans in the area are between 31 and 180 days past due compared with 1.2% in July 2014, near the oil market's peak.
Full text: As oil and gas producers slash production around Texas, small-business owners like Clint Fletcher are suffering the consequences. Mr. Fletcher, who owns stakes in nearly two-dozen businesses in the Midland area, has shut down 85% of his oil and gas wells and has had to mothball his oil-field equipment rental business, retaining two employees to repair and test the idle equipment. His business transporting water from oil field production, however, is holding its own. That is better than a number of competitors who have shut their doors in the last 45 days. "In 2015, people could still live and operate because you were living off 2014 receivables," he said. "In 2016, you just can't make it." Falling energy prices are deepening the pain felt in Midland and nearby Odessa, the two biggest cities in the oil-rich Permian Basin region of West Texas. There is downward pressure on wages as job applicants swell, while prices of everything from hotel rooms to tacos fall and late payments on small business loans increase. After a 50% drop in oil prices in the second half of 2014, Wesley Webb's catering business dried up. From serving three meals a day to crews on as many as 50 drilling rigs and fracking sites in 2014, he suddenly had only two or three catering jobs a week in early 2015. "It was like someone had turned the lights out," Mr. Webb said. At least 65% of economic activity in Midland, a city of about 140,000, is directly tied to the energy industry, according to Karr Ingham, the consulting petroleum economist for trade group Texas Alliance of Energy Producers. Retail sales in Midland and Odessa dropped 19% in the fourth quarter compared with a year earlier, he estimates, while hotel receipts fell 27% in the same time period. Unemployment rates in the Midland-Odessa area have been creeping up, according to his data, reaching 4.1% on average in the fourth quarter, up from 2.6% a year earlier. Related * In West Texas, Oil Drillers Keep Pumping * U.S. Shale Producers Face Reality, Cut Output * Why Oil Producers Will Be Over a Barrel for a Long Time Yet Midland "just lives and dies by crude oil prices," Mr. Ingram said, noting that growth was "stratospheric" during the recent energy boom. Even as delinquencies remain flat nationally, they are starting to rise among the city's small businesses and those in the surrounding Permian Basin. According to small business loan tracker PayNet Inc., about 2.2% of small business loans in the area are between 31 and 180 days past due compared with 1.2% in July 2014, near the oil market's peak. Nationally, the level is about 1.5%. Delinquency rates on construction loans in Midland and the surrounding area have climbed to 4.3% from 2.6%. Real-estate agents, auto repair shops, restaurants and other businesses are also having more trouble paying their bills, PayNet says. "It's like a spreading contagion," said PayNet President William Phelan. "It is infecting the general Texas economy." Midland Mayor Jerry Morales is trying to remain optimistic, hoping efforts to lure aerospace companies and more retail, dining and entertainment to this city will help buffer the slowdown in energy wealth. Mr. Morales, who owns three restaurants in town, including one that opened last month, is feeling the effects. He says customers are less free-spending than they were when oil prices were high. So he has reintroduced daily specials, such as a $6.99 taco plate, normally $10. He is being inundated with job seekers, now receiving 30 applications a month compared with about 25 in all of 2014. He has dropped starting pay to $11 an hour, from $15 two years ago and is staying open longer, after cutting back during the oil boom to hold down overtime costs. "We have been through this before and have always come out of it," said Mr. Morales. Hotel owners also have cut prices, which during weekdays had climbed in some cases to $300 or more a night. At the DoubleTree by Hilton Midland Plaza, revenue is down 35% from last year, said Keith Dial, operating partner of the 262-room hotel. Mr. Dial recently offered to lower negotiated rates by between $20 and $40 a night for his best corporate customers. Stephen Jumper, chief executive of Dawson Geophysical Co., a publicly traded oil-field services company, negotiated an $85 a night weekend rate for guests at one Midland hotel for his son's January wedding, below the $150 rate guests paid when another son married two years ago. Businesses in Midland and neighboring towns are used to the price swings of oil and it can present opportunities for those that survive. RK Pump and Supply, which sets up storefronts near active oil fields that sell piping, valves and other supplies, has stepped up marketing in an effort to boost market share, according to co-owner Lance Daniels. It is negotiating to buy several smaller competitors. "Our company is staying aggressive," said Mr. Daniels. "We are trying to build these relationships as a lot of our big competitors get lax." Meanwhile, Mr. Webb had to figure out a way to keep his catering business afloat after business came to a halt. More than a year ago, he took a stockpile of eggs, bacon and sausage nearing expiration and launched a special on breakfast burritos. He now serves as many as 2,000 breakfast burritos a week to supplement the catering business. Mr. Webb also turned his commercial kitchen into a barbecue restaurant. "We have seen it go from really good to really bad to pretty good," Mr. Webb said. Credit: By Ruth Simon
Subject: Small business loans; Petroleum industry; Hotels & motels; Crude oil prices; Energy industry
Location: Permian Basin West Texas
Company / organization: Name: PayNet Inc; NAICS: 561450; Name: Texas Alliance of Energy Producers; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 2, 2016
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769887497
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769887497?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Gain on Falling U.S. Production; May Brent crude on London's ICE Futures exchange rose $0.16 to $37.09 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Mar 2016: n/a.
Abstract:
[...]the market shrugged off the bigger-than-expected growth and honed in on the decline in production, which fell for the sixth week to 9.08 million barrels a day, and the drawdown in gasoline stocks, which fell by 1.5 million barrels, suggesting healthy demand.
Full text: Crude-oil prices rose in early Asian trade Thursday as a decline in U.S. production prompts more risk-taking in the market. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $34.84 a barrel at 0200 GMT, up $0.18 in the Globex electronic session. May Brent crude on London's ICE Futures exchange rose $0.16 to $37.09 a barrel. The U.S. Energy Administration on Wednesday reported the country's crude inventories in the week ended Feb. 29 grew 10.4 million barrels, sending total stockpiles to a weekly high of 518 million barrels. Historical monthly data show inventories last surpassed 500 million barrels in 1930. Analysts say the growth in crude stocks was mainly driven by stronger imports as refining margins remains robust given crude prices are still almost 70% lower from mid-2014 levels. However, the market shrugged off the bigger-than-expected growth and honed in on the decline in production, which fell for the sixth week to 9.08 million barrels a day, and the drawdown in gasoline stocks, which fell by 1.5 million barrels, suggesting healthy demand. "The message is clear, risk is on, traders are betting on a light at the end of the tunnel with regard to the global economy and hope that oil producers will somehow enforce the production freeze," said Stuart Ive, a client manager at OM Financial. Oil prices have been battered in the past 20 months. But tide has gradually turned recently, mostly buoyed by rising expectation of a production adjustment after the Russian energy minister said a "critical mass" of oil producing countries are on board to hold productions at January levels. A meeting is planned later this month in which producers will discuss the details of the proposed action. Nymex and Brent were last trading up 5% and 3.5% respectively so far this week. "Remember, the fundamentals have not changed at all because the world is still very much oversupplied. The market is mostly reacting to information and not actual changes," said Gao Jian, an energy analyst at SCI International. The renewed optimism in the market, however, is strengthening the argument that "the bottom in the crude oil market could now be in place for 2016," said ANZ Research. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--rose 2 points to $1.3109 a gallon, while April diesel traded at $1.1129, 64 points higher. ICE gasoil for March changed hands at $328.00 a metric ton, down $3.50 from Wednesday's settlement. Credit: By Jenny Hsu
Subject: Petroleum industry; Inventory; Crude oil prices; Price increases
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769838750
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769838750?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Most Stock Markets in Asia Rise, Hong Kong Is Standout; Rising oil prices and signs of an improving U.S. economy appear to help sentiment
Author: Fong, Dominique
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Mar 2016: n/a.
Abstract:
Most Asian stock markets extended weekly gains Thursday as rising oil prices and signs of an improving U.S. economy appeared to restore investor confidence.
Full text: Most Asian stock markets extended weekly gains Thursday as rising oil prices and signs of an improving U.S. economy appeared to restore investor confidence. Japan's Nikkei Stock Average ended the day 1.3%, Australia's S&P/ASX 200 closed 1.2% higher and Korea's Kospi rose 0.6%. Hong Kong's Hang Seng Index, however, closed 0.3% lower. In China, the Shanghai Composite Index eked out a 0.4% gain to close at 2859.76 as investors waited for the start of the National People's Congress, an annual legislative session that begins on Saturday. Policy makers there are expected to map out plans to stimulate the slowing economy. "Right now most investors in China are just 'wait and see,'" said Castor Pang, head of research at Core Pacific-Yamaichi International, a brokerage in Hong Kong. They're waiting "to see whether there is any surprise from the NPC announcement." Chinese shares pared gains briefly in the morning on renewed concerns about an impending squeeze of the market's money supply. Gui Minjie, chairman of the Shanghai Stock Exchange, said Thursday that "preparation work is running smoothly" to launch a registration-based system for new share sales. Such a system would soak up money available for buying and selling shares of existing listings. Chinese investors were also betting that property companies would be the beneficiaries of housing-stimulus policies that are expected to be unveiled at the National People's Congress. Jinke Property Group Co. rose 1% and Cinda Real Estate Co. was up 1.2%. Hints that the U.S. economy is improving have helped ease investor worries about slowing global economic growth. The U.S. Federal Reserve's "beige book" report on Wednesday showed economic activity in most areas of the U.S. grew in recent months , while a private jobs gauge suggested employment rose in February. Stocks in Asia were also extending gains as Brent crude prices hovered at about $37 per barrel in Asian trading hours. The oil-price rebound in recent weeks had helped fuel a second straight day of gains in the S&P 500. In Hong Kong, shares sank after data in the morning showed manufacturing activity contracted in February due in amid a slump in tourist arrivals and weaker global economic growth. Losses across most sectors offset gains in energy shares. In other markets, the Korean won strengthened to 1,214 per U.S. dollar after data showed that consumer-price inflation rose 1.3% in February from a year earlier, which was more than economists expected. The Australian dollar traded at its highest level so far this year at an intraday peak of US$0.7321 after data showed the nation's trade deficit narrowed more than expected. Yifan Xie and James Glynn contributed to this article. Write to Dominique Fong at Dominique.Fong@wsj.com Credit: By Dominique Fong
Subject: Stock exchanges; Energy economics; Investments; Economic growth
Location: Australia Japan United States--US China Hong Kong
Company / organization: Name: Congress; NAICS: 921120; Name: Shanghai Stock Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769840759
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769840759?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Exxon Backs '16 Spending Decrease
Author: Stynes, Tess
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Mar 2016: B.2.
Abstract:
In prepared remarks Wednesday, Exxon Mobil Chairman and Chief Executive Rex W. Tillerson said, "We have the financial flexibility to pursue attractive opportunities and can adjust our investment program based on market demand fundamentals."
Full text: Exxon Mobil Corp. reaffirmed plans to cut capital spending 25% this year, as the oil giant met with analysts Wednesday in New York. The company's annual analyst meeting comes a month after Exxon Mobil posted its weakest annual results in more than a decade, making it one of several global oil giants to get smacked by a prolonged commodities rout. Exxon's annual earnings were cut in half to $16.2 billion, forcing the Irving, Texas, company to put its share-buyback plan on hold to preserve cash. Exxon Mobil on Wednesday reiterated that it plans capital expenditures of roughly $23 billion this year, down from a reduced $31.1 billion in 2015. About a year ago, Exxon had projected its 2015 capital spending budget at $34 billion, a decline of 12% from 2014, but reined in spending as the year progressed. In prepared remarks Wednesday, Exxon Mobil Chairman and Chief Executive Rex W. Tillerson said, "We have the financial flexibility to pursue attractive opportunities and can adjust our investment program based on market demand fundamentals." The comment comes two days after Exxon Mobil sold $12 billion of new bonds, one of the biggest corporate-debt deals of the year and a sign investors remain willing to lend to higher-quality companies. Credit: By Tess Stynes
Subject: Petroleum industry; Capital expenditures; Financial performance
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Classification: 9190: United States; 8510: Petroleum industry; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: Mar 3, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769886621
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769886621?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
In Oil Country, Small Owners Feel Price Pinch --- Falling energy prices deepen the pain felt in Texas towns that rely on oil and gas business
Author: Simon, Ruth
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Mar 2016: B.4.
Abstract:
According to small business loan tracker PayNet Inc., about 2.2% of small business loans in the area are between 31 and 180 days past due compared with 1.2% in July 2014, near the oil market's peak. RK Pump and Supply, which sets up storefronts near active oil fields that sell piping, valves and other supplies, has stepped up marketing in an effort to boost market share, according to co-owner Lance Daniels.
Full text: As oil and gas producers slash production around Texas, small-business owners like Clint Fletcher are suffering the consequences. Mr. Fletcher, who owns stakes in nearly two-dozen businesses in the Midland area, has shut down 85% of his oil and gas wells and has had to mothball his oil-field equipment rental business, retaining two employees to repair and test the idle equipment. His business transporting water from oil field production, however, is holding its own. That is better than a number of competitors who have shut their doors in the last 45 days. "In 2015, people could still live and operate because you were living off 2014 receivables," he said. "In 2016, you just can't make it." Falling energy prices are deepening the pain felt in Midland and nearby Odessa, the two biggest cities in the oil-rich Permian Basin region of West Texas. There is downward pressure on wages as job applicants swell, while prices of everything from hotel rooms to tacos fall and late payments on small business loans increase. After a 50% drop in oil prices in the second half of 2014, Wesley Webb's catering business dried up. From serving three meals a day to crews on as many as 50 drilling rigs and fracking sites in 2014, he suddenly had only two or three catering jobs a week in early 2015. "It was like someone had turned the lights out," Mr. Webb said. At least 65% of economic activity in Midland, a city of about 140,000, is directly tied to the energy industry, according to Karr Ingham, the consulting petroleum economist for trade group Texas Alliance of Energy Producers. Retail sales in Midland and Odessa dropped 19% in the fourth quarter compared with a year earlier, he estimates, while hotel receipts fell 27% in the same time period. Unemployment rates in the Midland-Odessa area have been creeping up, according to his data, reaching 4.1% on average in the fourth quarter, up from 2.6% a year earlier. Midland "just lives and dies by crude oil prices," Mr. Ingram said, noting that growth was "stratospheric" during the recent energy boom. Even as delinquencies remain flat nationally, they are starting to rise among the city's small businesses and those in the surrounding Permian Basin. According to small business loan tracker PayNet Inc., about 2.2% of small business loans in the area are between 31 and 180 days past due compared with 1.2% in July 2014, near the oil market's peak. Nationally, the level is about 1.5%. Delinquency rates on construction loans in Midland and the surrounding area have climbed to 4.3% from 2.6%. Real-estate agents, auto repair shops, restaurants and other businesses are also having more trouble paying their bills, PayNet says. "It's like a spreading contagion," said PayNet President William Phelan. "It is infecting the general Texas economy." Midland Mayor Jerry Morales is trying to remain optimistic, hoping efforts to lure aerospace companies and more retail, dining and entertainment to this city will help buffer the slowdown. Mr. Morales, who owns three restaurants in town, including one that opened last month, is feeling the effects. He says customers are less free-spending than they were when oil prices were high. So he has reintroduced daily specials, such as a $6.99 taco plate, normally $10. He is being inundated with job seekers, now receiving 30 applications a month compared with about 25 in all of 2014. He has dropped starting pay to $11 an hour, from $15 two years ago and is staying open longer, after cutting back during the oil boom to hold down overtime costs. "We have been through this before and have always come out of it," said Mr. Morales. Hotel owners also have cut prices, which during weekdays had climbed in some cases to $300 or more a night. At the DoubleTree by Hilton Midland Plaza, revenue is down 35% from last year, said Keith Dial, operating partner of the 262-room hotel. Mr. Dial recently offered to lower negotiated rates by between $20 and $40 a night for his best corporate customers. Stephen Jumper, chief executive of Dawson Geophysical Co., a publicly traded oil-field services company, negotiated an $85 a night weekend rate for guests at one Midland hotel for his son's January wedding, below the $150 rate guests paid when another son married two years ago. Businesses in Midland and neighboring towns are used to the price swings of oil and it can present opportunities for those that survive. RK Pump and Supply, which sets up storefronts near active oil fields that sell piping, valves and other supplies, has stepped up marketing in an effort to boost market share, according to co-owner Lance Daniels. It is negotiating to buy several smaller competitors. "Our company is staying aggressive," said Mr. Daniels. "We are trying to build these relationships as a lot of our big competitors get lax." Meanwhile, Mr. Webb had to figure out a way to keep his catering business afloat after business came to a halt. More than a year ago, he took a stockpile of eggs, bacon and sausage nearing expiration and launched a special on breakfast burritos. He now serves as many as 2,000 breakfast burritos a week and turned his commercial kitchen into a barbecue restaurant. "We have seen it go from really good to really bad to pretty good," Mr. Webb said.
Credit: By Ruth Simon
Subject: Small business loans; Hotels & motels; Energy industry; Economic impact; Petroleum industry; Crude oil prices; Small business
Location: Permian Basin West Texas Texas
Company / organization: Name: PayNet Inc; NAICS: 561450; Name: Texas Alliance of Energy Producers; NAICS: 813910
Classification: 9190: United States; 8510: Petroleum industry; 3400: Investment analysis & personal finance; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Mar 3, 2016
Section: Small Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769886636
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769886636?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Some Funds Turning Bullish on Energy --- Despite global oil glut, some managers bet on rising prices or buy battered stocks
Author: Fletcher, Laurence; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Mar 2016: C.4.
Abstract:
Overall, bullish bets on Brent made by hedge funds and other money managers rose 12.4% during the past week to their highest since such records began in 2011, according to the Commitment of Traders report from Intercontinental Exchange Inc. Investors are less optimistic on the U.S.'s WTI oil benchmark, in which the number of bets on higher prices has barely ticked up this year.
Full text: Several hedge funds are starting to bet that assets in the battered energy sector are through the worst of their dismal run. Oil is down nearly 70% since June 2014, and analysts say there are few signs that the global oversupply of crude will abate soon. But some hedge-fund managers have recently started betting on rising oil prices, or picking up the stocks or credit of battered energy companies in the belief that prices have dropped too far. "We turned bullish on energy two weeks ago," said Gennaro Pucci, founder of hedge fund PVE Capital LLP, which invests in credit and oversees more than $1 billion in assets. He said he previously was betting on falling prices. Mr. Pucci said he had bought the credit of companies including U.S. shale-oil producer Continental Resources Inc. and pipeline operator Kinder Morgan Inc. He pointed to "compelling valuations" and an oil price he believes will stabilize at between $30 and $40 a barrel. On Wednesday, Brent crude, the global benchmark, edged up 0.3% to $36.93 a barrel, while West Texas Intermediate, the U.S. gauge, rose 0.8% to $34.66 a barrel. Pierre Andurand, one of the world's top energy traders who made big profits by correctly calling the plunge in oil prices in late 2014, said in his latest letter to investors, reviewed by The Wall Street Journal, that he is "cautiously constructive on oil prices at the moment." Mr. Andurand, founder of London-based hedge fund Andurand Capital Management LLP, had predicted last fall that oil could go as low as $25 a barrel, but said in a recent investor letter that he expects oil to end the year higher as inventory levels stabilize. A spokesman for Andurand declined to comment. Oil prices have rebounded in recent weeks from the decade-lows reached in January on hopes that major producers will cap their output. A persistent glut of crude has weighed on the market in the past two years, fueled by rising output. Overall, bullish bets on Brent made by hedge funds and other money managers rose 12.4% during the past week to their highest since such records began in 2011, according to the Commitment of Traders report from Intercontinental Exchange Inc. Investors are less optimistic on the U.S.'s WTI oil benchmark, in which the number of bets on higher prices has barely ticked up this year. Meanwhile,the size of hedge-fund bets on oil stocks rising increased 77% over the week ended Feb. 18,the biggest gain in any sector, according a J.P. Morgan Chase & Co. note to hedge-fund clients. The bet on energy is far from a sure thing, market participants say. Hedge funds raised billions of dollars to invest in distressed oil-and-gas companies after the oil price began to fall in 2014, but many sustained losses as the bets proved too early. Investors also bought into oil stocks late last year, hoping that moves to cut costs and spin off businesses signaled their share prices had bottomed, but that bet also proved too early. Few in the market believe oil's rebound will be a smooth ride. Worries about global growth engulfed financial markets early this year, adding to concerns about oil's longer-term oversupply. Storage tanks around the world are brimming with oil, and many traders scrambling to charter ships to use as floating storage, leaving key ports such as Rotterdam, Europe's busiest, congested with oil tankers. "The consensus is that people are still pretty negative on oil in the near term," said Robert Duggan, partner at SkyBridge Capital, which invests in hedge funds and manages $12.9 billion in assets. However, he said that betting against the oil price at such low levels had become hard for hedge funds because of the potential for it suddenly to rise. Investment banks have been cutting their outlooks for oil and expect prices to recover more slowly than previously anticipated. Thirteen banks polled by the Journal last week predicted Brent would average $39 a barrel this year, while West Texas Intermediate would average $38 a barrel. Both forecasts are down $11 from a survey in January. Still, many investors think this is the time to get back into the market. "The cheapest point is now," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, which oversees $125 billion in assets. He said "the demand story is not one of a global recession" and said high seasonal demand should start in the spring as Americans take to the roads in earnest. Ledbury Capital Partners has added to positions in stocks with large net cash positions such as Cairn Energy and Ophir Energy, said Chief Investment Officer Michael Alsalem. "Energy companies are viewed as being all bad. People are throwing the baby out with the bath water," he said. Credit: By Laurence Fletcher and Georgi Kantchev
Subject: Crude oil; Commodity prices
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 3, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769886708
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769886708?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Rising Oil Prices Push Up Stocks
Author: Vaishampayan, Saumya
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Mar 2016: C.4.
Abstract:
Data showing continued strength in the labor market attracted attention Wednesday, especially as investors search for clues about when the Federal Reserve will make its next interest-rate increase.
Full text: U.S. stocks rose slightly, as higher oil prices fueled a rally in energy shares. Stocks have rebounded since mid-February, as investors reassessed the health of the U.S. economy and a bounce in oil prices alleviated pressures on junk bonds and commodity-sensitive companies. What isn't clear is whether the stock-market recovery will turn into a sustained move higher. Underscoring the uncertainty, much of the rally has been driven by short-term investors covering bearish bets rather than by longer-term asset managers stepping in and buying stocks, traders say. The materials, industrials and energy sectors have gained the most over the past month, though earnings expectations for those sectors remain gloomy amid low oil prices. And even though stocks have tumbled from records, valuations remain elevated compared with long-run averages. "The overall sentiment on this bounce seems very weak," said Nathan Thooft, head of asset allocation at John Hancock Asset Management, adding that he doesn't expect stocks to advance much further. While investors had been eager to snap up stocks after pullbacks in recent years, that has changed in recent months, Mr. Thooft said. "The market has moved from a 'buy the dip' mentality. . .to more of a 'sell the bounce' mentality," he said. On Wednesday, the Dow Jones Industrial Average added 34.24 points, or 0.2%, to 16899.32. The S&P 500 rose 8.10, or 0.4%, to 1986.45 and the Nasdaq Composite gained 13.83, or 0.3%, to 4703.42. U.S. crude-oil prices gyrated after data showed a surge in domestic crude stockpiles, settling 0.8% higher at $34.66 a barrel. Energy shares rose the most in the S&P 500, up 2.5%. Recent economic reports, including a better-than-expected reading on fourth-quarter growth, have added to optimism on the economy. "The stock market priced in a [U.S.] recession, and we're nowhere near a recession," said Kully Samra, U.K. managing director at Charles Schwab. Some investors say they are encouraged by the bounce in the Dow Jones Transportation Average, which tracks airlines, railroads and trucking companies in the U.S. The 20-stock index has recovered all of its losses this year, and now is up 0.1% in 2016. "You can't hide economic activity from transport stocks," said Art Hogan, chief market strategist at Wunderlich Securities. "If you're making goods and services, you have to get them somewhere." Data showing continued strength in the labor market attracted attention Wednesday, especially as investors search for clues about when the Federal Reserve will make its next interest-rate increase. The Fed considers employment and inflation data as it makes monetary-policy decisions. Private payrolls in the U.S. rose by 214,000 in February, according to payroll processor Automatic Data Processing Inc. and forecasting firm Moody's Analytics. Economists surveyed by The Wall Street Journal had expected a rise of 185,000. The Labor Department's February jobs report, set for release Friday, is forecast to show that employers added 200,000 jobs last month. "We need that Goldilocks number on Friday," said Chris Gaffney, president at EverBank World Markets. A headline number sharply above 200,000 could throw the prospect of a rate increase in the short term back on the table, catching many investors offside. On the other hand, a number below 150,000 could revive some fears about the strength of the U.S. economy, he added. Elsewhere, the Stoxx Europe 600 rose 0.7%, extending its rally to five consecutive sessions. European stocks have been bolstered by expectations of more stimulus from the European Central Bank at its meeting next week. In Asia/Pacific trading early Thursday, Japan's Nikkei was up 0.6% at lunchtime, the Shanghai Composite was up 0.9%, Australia's S&P ASX 200 was up 0.8%, but Hong Kong's Hang Seng Index was down 0.7%. Trading in haven assets was mixed. Treasury prices slipped, pushing the 10-year yield up to 1.848%, from 1.835% on Tuesday. The dollar fell 0.5% against the yen to 113.48 yen. Gold rose 0.9% to $1,241.10 an ounce. In corporate news, Abercrombie & Fitch reported its first same-store sales gain in over three years as its quarterly profit soared 33%. Shares rose $1.27, or 4.4%, to $30.41. --- Riva Gold contributed to this article. Credit: By Saumya Vaishampayan
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 3, 2016
column: Wednesday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769886940
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769886940?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Genel Turns In $1 Billion Loss After Tony Hayward's Oil Firm Cuts Reserves; U.K.-listed oil company warned of lower revenue this year despite rising output
Author: Williams, Selina; MacDonald, Alex
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Mar 2016: n/a.
Abstract:
LONDON--Genel Energy PLC, the oil company chaired by former BP PLC Chief Executive Tony Hayward, reported its worst loss since listing its shares more than four years ago in writing down the value of its prized Taq Taq oil field whose reserves have proved lower than expected.
Full text: LONDON--Oil explorer Genel Energy PLC reported a loss of $1.16 billion for 2015 after it wrote down the value of a prized Kurdistan oil field where reserves proved lower than expected and worth less amid lower oil prices. Genel also said it was in talks to sell part of its stake in a $5.5 billion project to produce and export natural gas from Iraqi Kurdistan to Turkey, helping to push its shares 14% higher to 88.25 pence in London Thursday. The company's shares fell more than 40% on Monday after the oil explorer announced the $1 billion write down on its Taq Taq oil field in Kurdistan in northern Iraq. The reserves downgrade on Monday marked the latest setback for Chairman Tony Hayward, who remains Genel's dominant force despite stepping down as CEO last year. Mr. Hayward left the helm of BP PLC in 2010 following the Deepwater Horizon explosion and oil spill in the Gulf of Mexico. Chief Executive Murat Özgül said on Thursday that Genel was in discussions with a Turkish state-backed entity on the sale of as much as 50% of the Miran and Bina Bawi gas fields and up to 90% of the gas processing facilities in Iraqi Kurdistan and hoped to reach an agreement in the second half of this year. "We are prioritizing the Turkish company because the customer [of the gas] is the Turkish government and the project is of strategic importance to them as they seek to diversify their energy sources," he said in an interview. Mr. Özgül declined to name the Turkish or the international companies that Genel is talking to. The U.K.-listed oil company, once an investor favorite for its promises of growth from a portfolio of oil prospects from Angola to Kurdistan, warned that revenue would fall this year on lower output while it seeks delayed payments from the Kurdistan Regional Government for oil exports. Genel's net loss for 2015 widened to $1.16 billion, compared with a net loss of $314 million in the previous year. Revenue fell 34% to $344 million. The impact of lower oil prices, which plummeted last year, more than offset a 22% increase in Genel's oil output to 84,900 barrels a day. Looking ahead, Genel confirmed its plans to produce between 60,000 to 70,000 barrels of oil a day and generate $200 million to $275 million in revenue this year, assuming a $45 a barrel Brent oil price. This would drop to $160 million to $220 million, assuming a $35 a barrel Brent oil price. The company also reaffirmed its plan to spend between $80 million and $120 million on its Kurdistan fields this year as the regional government committed to making predictable monthly oil export payments. This will be supplemented with additional monthly payments aimed at reducing the amount the government owes for delayed payments on oil exports, which is currently around $405 million. The Kurdish regional government resumed oil payments in the second half of last year but is still in arrears as its struggles to pay its soldiers, who are fighting off Islamic State militants. Write to Selina Williams at selina.williams@wsj.com and Alex MacDonald at alex.macdonald@wsj.com Credit: By Selina Williams and Alex MacDonald
Subject: Net losses; Oil reserves; Petroleum industry; Oil fields; Crude oil prices
Location: Angola United Kingdom--UK
Company / organization: Name: Genel Energy PLC; NAICS: 211111; Name: BP PLC; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 3, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769889601
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769889601?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices End Rally on Increased Stockpiles; U.S. crude production continued to ease, but low demand meant inventories increased
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Mar 2016: n/a.
Abstract:
Oil prices have gained more than 30% since hitting a nadir in mid-February, but remain down nearly 70% from their recent peak in June 2014 thanks to a mushrooming global supply glut amid robust U.S. output and a decision by foreign state producers to keep output high rather than cutting back and conceding market share.
Full text: Oil prices edged lower Thursday, ending a three-day rally, as the market took stock of mounting U.S. inventories. The benchmark U.S. crude contract fell 9 cents or 0.3% to $34.57 a barrel on the New York Mercantile Exchange, after a 5.7% gain over the first three trading sessions of the week. The global Brent contract settled up 0.4% at $37.07 a barrel on the ICE Futures U.S. exchange. The markets toggled around the break-even point for much of the trading session Thursday. Oil prices have gained more than 30% since hitting a nadir in mid-February, but remain down nearly 70% from their recent peak in June 2014 thanks to a mushrooming global supply glut amid robust U.S. output and a decision by foreign state producers to keep output high rather than cutting back and conceding market share. U.S. output has now been falling for six consecutive weeks, to below 9.1 million barrels a day from a peak of 9.7 million last April. Crude oil inventories, however, have been on the rise, with last week's increase being much larger than expected. This has led to crude storage space in the U.S. quickly filling up, with the key U.S. hub at Cushing, Okla. near 90% of available capacity. The U.S. Energy Information Administration on Wednesday reported the country's crude inventories last week grew 10.4 million barrels, sending total stockpiles to a weekly high of 518 million barrels. Historical monthly data show inventories last surpassed 500 million barrels in 1930. With the U.S. refinery maintenance season fast approaching, analysts say that crude inventories will rise further. However, U.S. crude oil production fell for the sixth week to 9.08 million barrels a day. Analysts said investors have been looking past the bearish data to focus on the continued decline in production, as an indicator that supply-and-demand balances are starting to improve. The oil market "remains surprisingly well supported off of continued bullish sentiment rather than any particular shift in the fundamentals," research consultancy Ritterbusch and Associates said in a note. Hopes for production cuts among major state producers have also supported the market since Saudi Arabia, Russia and other OPEC members announced last month they will seek to clinch a deal to freeze output at January levels. The Russian energy minister said this week that a "critical mass" of oil producing countries are on board . Iran, however, has been a critical holdout so far , as the country seeks to increase its production after years of international sanctions. The renewed optimism in the market, however, is strengthening the argument that "the bottom in the crude oil market could now be in place for 2016," said ANZ Research. In refined product markets, gasoline futures ended down 0.9% at $1.2988 a gallon while diesel futures rose 1.24% at $1.1202 a gallon. Write to Christian Berthelsen at christian.berthelsen@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Christian Berthelsen and Georgi Kantchev
Subject: Crude oil; Petroleum industry; Inventory; Futures; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769897577
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769897577?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canadian Natural Profit Drops 89%; Company Cuts Spending; Falling commodity prices hurt oil and gas producer
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Mar 2016: n/a.
Abstract:
Oil and gas producer Canadian Natural Resources Ltd. reported an 89% decline in its fourth-quarter profit and slashed planned spending for this year amid tumbling commodity prices.
Full text: Oil and gas producer Canadian Natural Resources Ltd. reported an 89% decline in its fourth-quarter profit and slashed planned spending for this year amid tumbling commodity prices. Calgary, Alberta-based Canadian Natural, which cut its capital-spending budget multiple times throughout 2015, said Thursday that it plans to spend 3.5 billion Canadian dollars ($2.6 billion) to C$3.9 billion this year. That is down about 22% from guidance given in November. Canadian Natural, like its fellow operators in the oil patch, faced stiff headwinds from the significant decline in oil and gas prices. In its latest quarter, the company said West Texas Intermediate benchmark oil prices fell 42% from a year earlier, to $42.17 a barrel, and were down 9% from the previous quarter. The big oil-sands producer said it earned C$131 million, or 12 Canadian cents a share, in its latest quarter, down from C$1.2 billion, or C$1.09 a share, a year earlier. Adjusted to exclude items, it recorded a loss of 4 Canadian cents a share, which was in line with the loss projected by analysts polled by Thomson Reuters. Cash flow fell 42%, and sales were down 39%. Canadian Natural, which late last year sold the bulk of its royalty land assets in Western Canada to PrairieSky Royalty Ltd. for C$1.8 billion, said production in 2015 rose 8% to a record 851,901 barrels of oil equivalent a day. The increase came despite an 80% decline in its 2015 drilling programs, helped in part by strategic acquisitions and productivity enhancements. Production in 2016 is expected to fall about 2% from prior-year levels, it said. The company said it has earmarked the bulk of its planned spending budget this year, or around C$2 billion, to complete its Horizon oil-sands project expansion project. It said startup of the second phase of Horizon is expected within seven months. Write to Judy McKinnon at judy.mckinnon@wsj.com Credit: By Judy McKinnon
Subject: Petroleum industry; Losses; Oil sands
Location: Calgary Alberta Canada
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Canadian Natural Resources Ltd; NAICS: 211111, 213112; Name: PrairieSky Royalty Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 3, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1769993392
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1769993392?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
British Oil Producers Need a Budget Boost; The government now has another chance to help a vital industry hit by falling prices and high taxes.
Author: Ruddiman, Bob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Mar 2016: n/a.
Abstract: None available.
Full text: Among those who will be watching with keen interest U.K. Chancellor of the Exchequer George Osborne's March 16 budget will be members of Britain's oil industry. Pressed by the impact of oil now priced at $30 a barrel, producers are eager for some short-term relief. There have already been some concessions to British oil on the way down from $100 oil. Last year's budget announced a cut in the petroleum revenue tax to 35% from 50%. It also reduced the supplementary charge to 20% from 30% and set aside £20 million ($28 million) to support more seismic surveys of underexplored fields in the North Sea. Earlier this year, a further £500 million investment package was promised to support the oil exploration and production industry around the North Sea, to be paid for by England and Scotland. Many felt these concessions were inadequate when oil was at $60 a barrel. Now that prices are half that, it's time for Mr. Osborne to redouble his support. Without further concessions, the U.K. could face a flight of capital, skills and technologies to competing oil-rich regions with more stable fiscal regimes. Should they go, there's no guarantee that they would ever return. There is also a risk that the U.K. might miss the opportunity to incentivize investment and usher in a golden age of British technology and know-how. The industry surrounding the North Sea has developed some of the most innovative techniques for extracting oil safely and efficiently from remote locations. It's one of the few U.K. industries that can be said with confidence to be world class. The industry itself is remarkably upbeat about its future. In a survey published in late January undertaken by my firm, we polled 200 senior executives in the oil-field-services industry with operations around the U.K. continental shelf. Ninety-six percent of respondents believed the U.K. North Sea would return to "peak" levels of profitability, with almost half predicting this rebound within the next three to five years. Seventy percent said they had plans to embark on mergers and acquisitions, driven by a desire to internationalize and export their technical expertise. But that isn't to say that the industry doesn't need help reducing its current short-term pain. A number of companies have already voiced concerns privately about how the government's planned "apprenticeship levy" will impact the industry. This is the program that proposes to impose a 0.5% tax on all employers with an annual wage bill of £3 million or more to help fund apprenticeships. Due to be introduced in April 2017, there are concerns in some quarters about the mounting costs this scheme would impose. Were one to create a disincentive for training the next generation of engineers and technicians at an already challenging time, it would probably look something like this. An exemption on a deferred basis would help soften the blow. The oil sector is also concerned, as are other capital-intensive industries, about potential tax increases arising out of the Organization for Economic Cooperation and Development's base erosion and profit-shifting project (BEPS). Few would defend aggressive and artificial corporate-financing arrangements designed to reduce tax liabilities, but the "cure" could be a killer for the oil industry. One target for tax reform to reduce tax avoidance is to severely limit tax relief for interest payments, since such relief often figures prominently in corporate tax planning. But if the U.K. goes ahead with a blanket restriction on this tax relief, that could have a disproportionate effect on oil companies, whose investments occur over long time horizons and whose profitability has already been sharply eroded by the fall in oil prices. Finally, the marginal tax rate on oil-field profits remains at 67.5% for older oil fields that are subject to the petroleum revenue tax and 50% for fields developed since the early 1990s. By comparison, the general corporation-tax rate is 20%. Clearly there must be scope for further tax reduction and flexibility amid the current volatility in global oil prices. A decline from $100 oil has brought with it economic benefits to consumers. But as Mr. Osborne puts the final touches on his 2016 budget, he would do well to remember the British oil producers who are now struggling at $30 oil. That impact is only just starting to be felt. Mr. Ruddiman is the head of energy at international law firm Pinsent Masons. Credit: By Bob Ruddiman
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 3, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770077535
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770077535?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fed's Kaplan Warns Oil Prices Could Remain Low for Some Time; Dallas Fed chief says energy industry could see more bankruptcies, mergers and restructurings
Author: Derby, Michael S
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Mar 2016: n/a.
Abstract:
Overproduction is being driven by Iran's return to the global energy market, smaller-than-expected cutbacks in American production, increased supply from Organization of the Petroleum Exporting Countries and falling demand from emerging-market economies, the official said.
Full text: The leader of the Dallas Fed on Thursday said low oil prices aren't going anywhere for some time, suggesting a continuing challenge to the central bank's desire to boost inflation pressures. Robert Steven Kaplan told an audience in Austin, Texas, that a significant oversupply of oil relative to demand is unlikely to be resolved until the middle of 2017. Mr. Kaplan heads one of the two regional Fed banks most connected to the energy sector, the other being the Minneapolis Fed, which counts North Dakota oil production in its district. Related * Kaplan: Fed Should Show Patience in Considering Rate Increases * Dallas Fed Chief Favors Regulations Tied to Banks' Sizes Mr. Kaplan said his bank believes global oil production will exceed demand by one million barrels a day in 2016 before moderating next year. He said overproduction is such an issue that "there is now some discussion in the industry about potential limits in storage capacity." Overproduction is being driven by Iran's return to the global energy market, smaller-than-expected cutbacks in American production, increased supply from Organization of the Petroleum Exporting Countries and falling demand from emerging-market economies, the official said. He added that if OPEC cut back on production, that should have a clear impact on prices. "The ultimate timing of market production/consumption balance remains uncertain," Mr. Kaplan said. "In the meantime, we expect to see continued low prices and high levels of price volatility, as well as more bankruptcies, mergers and restructurings in the energy industry." Fed officials have been surprised by the declines in energy prices, and the drops have complicated the outlook for inflation in the U.S. The Fed has failed to achieve its 2% price-rise target for more than three years, and it doesn't expect to get there until some time in 2018. The oil-price declines have made hitting the target even harder. Fed official are counting on a stabilization of oil prices to create the favorable math that will lead to an increase in price pressures. But now, inflation expectations are on the wane, and some evidence suggests low gasoline prices are the culprit. As Fed officials see it, that could make it even harder for actual inflation to rise. Mr. Kaplan's comments suggest the Fed will be wrestling with the influence of weak oil for some time. The central banker said the energy situation is having an impact on financial markets as well, and it is making the general cost of higher-risk credit more expensive. This in turn is putting pressure on mutual funds invested in the high-yield market, Mr. Kaplan said. Write to Michael S. Derby at michael.derby@wsj.com Credit: By Michael S. Derby
Subject: Inflation; Petroleum industry; Petroleum production; Energy industry
Location: Texas North Dakota
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 3, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770079534
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770079534?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canadian Dollar Recovers on Higher Oil Prices and Hopes for Economy; But experts appear to be of mixed opinion about whether trend can be sustained
Author: George-Cosh, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Mar 2016: n/a.
Abstract:
The rebound has made the loonie, as the Canadian dollar is also known, a top performer among commodity-linked currencies this year. Since the start of 2016, the currency is up about 3.2% against the U.S. dollar.
Full text: TORONTO--The Canadian dollar has gotten some of its strength back. But will that trend last? After hitting a 13-year low of 68.1 U.S. cents on Jan. 20 on expectations the Bank of Canada was poised to cut interest rates to support an economy hard hit by the commodity-price rout , the currency was recently quoted at 74.6 U.S. cents. That 9.5% jump from its January bottom has surprised some analysts. The rebound has made the loonie, as the Canadian dollar is also known, a top performer among commodity-linked currencies this year. Since the start of 2016, the currency is up about 3.2% against the U.S. dollar. In the same period, the Australian dollar has advanced 1% versus the American currency, while the Norwegian krone is up about 3%. "Mauled by bears and left for dead just a few weeks ago, the Canadian dollar is now back with a vengeance," National Bank Financial senior economist Krishen Rangasamy said in a note last week. While the loonie's rebound was kick-started by the Canadian central bank's Jan. 20 monetary policy decision to keep its benchmark interest rate at 0.5%, several other factors have also come into play. Prices for oil, a key Canadian export which heavily influences the loonie's direction, have risen more than 20% from multiyear lows below $30 a barrel last month, as investors grow more optimistic the major oil producers will curb output to deal with oversupply. Also supporting the currency are expectations the Bank of Canada will stand pat on rates until the Canadian government gives more details about a planned fiscal-stimulus package to boost growth in resource-dependent Canada. That spending is likely to be unveiled in the government's 2016 budget on March 22. The U.S. Federal Reserve, meanwhile, has signaled caution about the path of its interest-rate increases because of financial-market turbulence and weakness in foreign economies including China. Its next policy meeting is March 15-16. "We're starting to buy Canadian dollars again and lighten up our U.S. dollar exposure," said Frank Maeba, managing director of Breton Hill Capital Ltd., a hedge fund based in Toronto. Some Canadian dollar observers suggest the currency will grind higher to about 76 U.S. cents by the end of the year, as oil prices improve and the Canadian stimulus spending begins. "Significant fiscal stimulus will take the onus off the Bank of Canada and position Canada for stronger [gross domestic product] growth rates going forward," said Shaun Osborne, chief currency strategist at the Bank of Nova Scotia. In 2015, the Canadian economy grew 1.2%, slower than the 2.5% pace the previous year. Other experts aren't so sanguine about the loonie's prospects. David Doyle, Canadian strategist at Macquarie Capital Markets Canada Ltd., hasn't stepped back from a bearish call made in January that the Canadian dollar would fall to around 59 U.S. cents this year. The Canadian government's fiscal stimulus, currently pegged around 10 billion Canadian dollars ($7.4 billion) this year but likely to be higher, is relatively modest, and it will take quite a bit of time until it shapes the Canadian economy, he said. Mr. Doyle expects debt-burdened households, a Canadian monetary policy that increasingly diverges from that in the U.S. and lackluster Canadian exports to weigh on Canada's outlook. "By and large, the [Canadian] economy is still going to disappoint expectations in the next six to 12 months," Mr. Doyle said. "We think [the Bank of Canada] will cut rates in April or July." Breton Hill's Mr. Maeba supports that bearish view and will look at selling opportunities when the loonie hits the 75-76 U.S. cent area. "We're still playing the ranges," he said. "The longer term trend we see in place for the loonie is to weaken back down." Write to David George-Cosh at david.george-cosh@wsj.com Credit: By David George-Cosh
Subject: Canadian dollar; American dollar; Interest rates; Federal Reserve monetary policy; Currency; Economic growth; Gross Domestic Product--GDP
Location: Canada United States--US
Company / organization: Name: Bank of Canada; NAICS: 521110; Name: Bank of Nova Scotia; NAICS: 522110; Name: National Bank Financial; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770079627
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770079627?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Indicted Oil Titan Killed in Car Crash
Author: Olson, Bradley; Dezember, Ryan; Ailworth, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Mar 2016: A.1.
Abstract:
Mr. McClendon grasped the promise of hydraulic fracturing, a drilling technology that could unlock formerly untapped deposits of oil and natural gas from dense underground sedimentary rock formations across the U.S. He in turn commanded what he described as an army of landmen that swarmed regions likely to hold these energy riches, photographing county deed records en masse and going door-to-door to persuade owners to lease the rights to drill beneath their land.
Full text: Aubrey McClendon, an Oklahoma wildcatter who helped pioneer the shale energy boom, died in a fiery car crash Wednesday, a day after he was indicted by a federal grand jury on charges of conspiring to rig the price of oil and gas leases. Mr. McClendon propelled the rebirth of U.S. energy production as the co-founder of Chesapeake Energy Corp., leading a rush to lease land around the country to extract natural gas and oil trapped in shale rock formations through a technique made famous by its nickname, fracking. His extreme risk-taking made him a billionaire at one time. It also caused him personal and professional financial hardships that spurred activist investors, including Carl Icahn, to oust him as Chesapeake's chief executive in 2013. Mr. McClendon immediately embarked on a comeback attempt that was eventually hobbled by collapsing energy prices and led him to put up some of his remaining wealth as collateral -- including his minority stake in the Oklahoma City Thunder basketball team. "He was a major player in leading the stunning energy renaissance in America," said T. Boone Pickens, another energy pioneer, who had known Mr. McClendon for nearly 25 years. "He was charismatic and a true American entrepreneur. No individual is without flaws, but his impact on American energy will be long-lasting." Oklahoma City police said Wednesday that Mr. McClendon was found dead after driving into a concrete wall around 9 a.m. at a speed well above the 40-mph hour limit for the area. He was alone in the car. Mr. McClendon was survived by his wife, Katie, and three children. He was 56. Authorities were trying to determine whether the crash was the cause of death, or whether a health problem had figured in the accident. Police said it would take one to two weeks to complete their investigation. "The vehicle was immediately engulfed in flames," said Capt. Paco Balderrama, of the Oklahoma City Police Department. "It appears that speed was most definitely a factor in the fatality." Mr. McClendon was an archetype from a past era: an oil man with an endless appetite for risk who shrugged off personal and professional peaks and valleys as the cost of doing business. The son of a prominent Oklahoma family, Mr. McClendon was the great-nephew ofRobert Kerr, the former Oklahoma governor, U.S. senator and co-founder of Kerr McGee Corp., a large U.S. energy company sold in 2006 to Anadarko Petroleum Corp. Mr. McClendon, a graduate of Duke University, got his start in the oil business on the ground floor as a leasing agent, or "landman." In 1989, he formed Chesapeake with a fellow landman, and occasional competitor, Tom Ward, with $50,000. Mr. McClendon grasped the promise of hydraulic fracturing, a drilling technology that could unlock formerly untapped deposits of oil and natural gas from dense underground sedimentary rock formations across the U.S. He in turn commanded what he described as an army of landmen that swarmed regions likely to hold these energy riches, photographing county deed records en masse and going door-to-door to persuade owners to lease the rights to drill beneath their land. At one point, Mr. McClendon spent more than $2 billion leasing rights to drill beneath roughly 5% of Ohio, where he believed the gas-laden Utica Shale would be the "biggest thing to hit Ohio since the plow." His aggressive approach drove Chesapeake to become the second-largest natural gas producer in the U.S. But his ambitions also created a mountain of debt that led to tensions with shareholders. When Wall Street funding dried up after the financial crisis, he went to Asia with Ralph Eads, a Jefferies LLC banker and college pal, to successfully sell the region's sovereign-wealth funds on U.S. shale. Soon, a flood of money flowed to Chesapeake and its oil-patch rivals, which kept drilling rigs running across the U.S., despite the recession. Mr. McClendon's star rose in his native Oklahoma, where he helped draw the National Basketball Association's Seattle SuperSonics to the state capital, where they became the Thunder. He built a sprawling headquarters, a campus of redbrick Georgian buildings meant to evoke his alma mater with a large gym, restaurants, a full-time beekeeper to pollinate an organic garden -- all for employees. "I have never met another man like him," said Tom Price, a former Chesapeake senior vice president who worked with Mr. McClendon. "Aubrey made us all believe better things about ourselves." The shale boom transformed energy markets, challenged Saudi Arabia's role as a global oil price-setter -- and later contributed to a world-wide glut of oil and gas that led to one of the worst price crashes in decades. Mr. McClendon often ran his personal finances much like those of Chesapeake -- spending without much regard to cost. But once prices fell, Mr. McClendon's playbook frayed. A billionaire from the value of his shares, he was forced to sell tens of millions during a margin call on his debts in 2008. With unbending conviction about the prospects of shale drilling, Mr. McClendon set his sights on new opportunities in 2013 after his ouster from Chesapeake. He started anew just blocks from the company's campus and recruited former employees with such bold strokes as billboards urging workers in Oklahoma's oil patch to join him. In less than three years, he raised more than $14 billion from blue-chip debt investors, pension funds, friends and employees. Almost as soon as Mr. McClendon's companies were formed and bought new assets, the price of crude oil and natural gas began a precipitous crash. Mr. McClendon used American Energy Partners LP as the means to acquire oil and gas leases and mount his second act after his ouster at Chesapeake. In the past year, financial backers replaced him as CEO and board member at several of the companies under the American Energy umbrella. Meanwhile, he struggled to raise new funds from private-equity firms and banks -- once his strength -- for ventures in Australia, Argentina and Oklahoma. Scott Roberts, a senior portfolio manager at Invesco Ltd. who helps manage $3 billion in high-yield bonds, said in an interview before this week's indictment that he had long admired Mr. McClendon for his visionary deal-making at Chesapeake, but couldn't stomach buying into his new ventures. "He's always had a wide following of people willing to give him capital. But this time, it was different," Mr. Roberts said. "There was too much debt." In October, Mr. McClendon put up a host of personal assets -- including houses, vintage wines and antique boats -- as collateral for new lenders. Some were transfers from previous creditors, including his roughly 20% stake in the Thunder to Oaktree Capital Group LLC. A spokeswoman for Oaktree, which specializes in distressed assets, declined to comment. A personal loan of more than $400 million from Goldman Sachs Group Inc. and other banks helped finance his investment in new shale companies during 2013 and 2014, according to people familiar with the matter. That loan was still outstandingand most of it had been syndicated by the bank, the people said. On Tuesday, a federal grand jury indicted Mr. McClendon, alleging he orchestrated a campaign with an unnamed company to keep bid prices in Oklahoma down from 2007 to 2012. The state of Michigan made similar allegations against Chesapeake, and the company settled that case for $25 million last year. Mr. McClendon contested the federal charges Tuesday evening. "All my life I have worked to create jobs in Oklahoma, grow its economy, and to provide abundant and affordable energy to all Americans," he said in a statement. "I am proud of my track record in this industry, and I will fight to prove my innocence and to clear my name." According to a person familiar with the matter, the other party referenced in the indictment is Mr. Ward, Mr. McClendon's old partner at Chesapeake, who served as chief executive of another Oklahoma City energy company, SandRidge Energy Inc., before departing in 2013. Representatives for SandRidge and Mr. Ward didn't return requests for comment on Wednesday. SandRidge had previously disclosed in a regulatory filing that it had been contacted in connection with a federal antitrust probe involving leasing. One of the largest benefactors behind Mr. McClendon's comeback bid was private equity investor John Raymond, whose Houston-based Energy & Minerals Group helped launch American Energy Partners and invested roughly $3 billion with Mr. McClendon. But EMG declined to participate in Mr. McClendon's recent projects, including those overseas. "We will deeply mourn his loss and please join us in expressing our condolences to his family," American Energy Partners said in a statement following his death. Still, Mr. McClendon, a gambler among gamblers in the energy industry, was doing deals despite the current drop in oil and gas prices, even as rivals backed off. Last month, he signed a $500 million deal to develop shale oil and gas in Argentina with state-run firm YPF SA. He signed the agreement even though he had yet to produce the funds. As late as Monday, his SCOOP Energy Co. was filing new drilling agreements outside Oklahoma City, according to court documents. That fearless attitude was among the traits his colleagues recalled Wednesdayafter hearing of his death. "Aubrey McClendon could have been successful 40 years ago and 40 years from now," said James Hackett, the former chief executive of Anadarko Petroleum and a longtime oil industry peer. "He is one of the most incredible entrepreneurs I've ever known." --- Lynn Cook contributed to this article. Credit: By Bradley Olson, Ryan Dezember and Erin Ailworth
Subject: Natural gas; Petroleum industry; Professional basketball; Hydraulic fracturing; Fatalities; Traffic accidents & safety
Location: United States--US Oklahoma
People: McClendon, Aubrey
Company / organization: Name: Oklahoma City Thunder; NAICS: 711211; Name: Chesapeake Energy Corp; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Mar 3, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: New spapers
Language of publication: English
Document type: News
ProQuest document ID: 1770828359
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770828359?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Nigerian Official Says Some OPEC Members to Meet With Russia March 20; Crude oil prices have plunged more than 70% since June 2014
Author: Oredein, Obafemi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Mar 2016: n/a.
Abstract:
Some members of the Organization of the Petroleum Exporting Countries are scheduled to meet with non-member Russia later in the month as part of efforts to stabilize crude oil prices, a senior Nigerian official said Thursday.
Full text: Some members of the Organization of the Petroleum Exporting Countries are scheduled to meet with non-member Russia later in the month as part of efforts to stabilize crude oil prices, a senior Nigerian official said Thursday. Ibe Kachikwu, minister of state for petroleum resources, said the meeting will take place on March 20 in Moscow to "fine tune collaborative strategies," according to a statement from the Nigerian National Petroleum Corp. His comments were the first by an official providing details of the timing and location of a possible meeting. Russian and Venezuela, an OPEC member, previously had said a meeting of producers would take place to finalize a deal to freeze production. Officials from Russia, Saudi Arabia and Kuwait said earlier Thursday that no final decision had been made on the time and location of the meeting. Mr. Kachikwu didn't name the OPEC member countries that would meet with Russia. Last month, the energy ministers of Saudi Arabia and Russia--the world's two largest crude-oil exporters--agreed with Qatar and Venezuela to freeze their production amid mounting pressure to prop up slumping oil prices. Crude oil prices have plunged more than 70% since June 2014, largely because of surging supplies from the U.S., Russia and OPEC members including Saudi Arabia, Iraq, Nigeria and Iran. Nigeria, Africa's biggest crude exporter has seen its revenue drop sharply because of the plummeting prices for oil, the source of over 90% of its foreign exchange and 70% of government revenue, according to the International Monetary Fund. Nigerian President Muhammadu Buhari last week held talks with Saudi Arabia's King Salman and Qatar's emir, Sheikh Tamim bin Hamad al-Thani, on measures to achieve greater stability in crude prices. Benoit Faucon contributed to this article. Write to Obafemi Oredein at realtimedesklondon@wsj.com Credit: By Obafemi Oredein
Subject: Crude oil; Crude oil prices; Petroleum industry
Location: Venezuela Kuwait Qatar Russia Nigeria Saudi Arabia
People: al-Thani, Tamim bin Hamad
Company / organization: Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770107761
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770107761?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Trend Higher on Hopes of Shrinking U.S. Production; May Brent crude on London's ICE Futures exchange rose $0.15 to $37.22 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Mar 2016: n/a.
Abstract:
HSBC expects a 19% fall in aggregate capital expenditures this year for the global integrated oil companies the bank covers in its equity research, sinking spending to a ten-year low.
Full text: Crude-oil prices carved out small gains in early Asia trade Friday, driven by expectations of smaller U.S. production as persistently low prices squeeze less-competitive producers out of the market. U.S. crude production posted a 2.6% year-over-year drop in the week that ended Feb. 26 by falling to 9.08 million barrels a day. Although the total crude stocks at 518 million barrels is the highest since 1930 based on monthly data, the declining trend in production, albeit gradual, is enough to turn some traders bullish. Latest projection by the U.S. Energy Information Administration estimates domestic crude production to decrease from an average of 9.4 million barrels a day in 2015 to 8.7 million barrels a day in 2016 and to 8.5 million barrels a day in 2017. "The forecast reflects an extended decline in lower 48 onshore production driven by persistently low oil prices that is partially offset by growing production in the federal Gulf of Mexico," the agency said. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $34.83 a barrel at 0330 GMT, up $0.26 in the Globex electronic session. May Brent crude on London's ICE Futures exchange rose $0.15 to $37.22 a barrel. As oversupply has roiled prices for nearly 20 months, some smaller shale producers are struggling to stay afloat. Some are coping by pausing production. "The tight credit market will make it difficult for U.S. shale producers to refinance upcoming debt, and we may see an accelerated decline in U.S. oil production in 2016 to 2017," ANZ Research said in a note. U.S. oil players are hardly alone in dealing with the sting of low prices. HSBC expects a 19% fall in aggregate capital expenditures this year for the global integrated oil companies the bank covers in its equity research, sinking spending to a ten-year low. The price collapse has also battered the national coffers of oil-producing countries. Even Saudi Arabia, the largest producer in the Organization of the Petroleum Organization, is planning to cut spending by 14% this year as the kingdom faces a budget deficit. The prolonged downturn recently prompted several larger producers--Russia, Saudi Arabia, Qatar, and Venezuela--to call for a collective freeze of output at January's levels. Even though Iran has flatly refused to comply, Russia's energy minister said a "critical mass" of countries had pledged to be on board. Ibe Kachikwu, Nigeria's minister of state for petroleum resources, said a meeting will take place on March 20 in Moscow to "fine tune collaborative strategies," according to a statement from the Nigerian National Petroleum Corp. But not all market watchers are excited about the possible freeze, saying that because many producers were already pumping at an exceedingly high rate in January, holding output at the January levels meant the global glut may take longer to dwindle. In the short term, traders will be keeping an eye on U.S. non-farm payrolls for fresh cues. "For today, we continue to expect prices to move back towards the middle of the range as U.S. nonfarm payrolls are expected to be strong. This would cause the U.S. dollar index to move upwards [and] thus, give downward pressures for oil," said Daniel Ang, a Phillip Futures analyst. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--rose five points to $1.2993 a gallon, while April diesel traded at $1.1200, two points lower. ICE gasoil for March changed hands at $329.75 a metric ton, down $0.75 from Thursday's settlement. Obafemi Oredein contributed to this article. Credit: By Jenny Hsu
Subject: Petroleum industry; Capital expenditures; Budget deficits; Futures; Crude oil prices; Petroleum production
Location: United States--US Asia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770110498
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770110498?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Nigeria to Split Up National Oil Company; State's powerful oil bureaucracy will be broken up as government combats corruption
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Mar 2016: n/a.
Abstract:
"Titles like 'group executive directors' are going to disappear and in their place you are going to have chief executive officers and they are going to take responsibilities for their titles," he said.
Full text: Nigeria is set to split its giant state-run company into 30 independent units, a spokesman for the firm said, in an effort to improve efficiency in the wake of the oil price crash . The Nigerian National Oil Co., which oversees oil fields from Africa's largest oil producer, has suffered from decades of mismanagement and corruption. But with the country struggling financially because of low oil prices, the administration of President Muhammadu Buhari is taking steps to root out its problems by breaking up the country's powerful oil bureaucracy. "For the first time we are unbundling the subset of the NNPC to 30 independent companies with their own managing directors," said Emmanuel Ibe Kachikwu, Nigeria's oil minister, who is also NNPC's managing director. "Titles like 'group executive directors' are going to disappear and in their place you are going to have chief executive officers and they are going to take responsibilities for their titles," he said. Nigeria is currently in talks for a loan from the World Bank to help fill a steep budget deficit this year. The previous administration of Goodluck Jonathan has been widely accused of bribery and misappropriation of funds in the oil sector. Former oil minister Diezani Alison-Madueke is being investigated on corruption allegations in Nigeria and the U.K. Through her lawyer, she has denied any wrongdoing. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Executives; Petroleum industry
Location: Africa Nigeria
People: Jonathan, Goodluck Kachikwu, Emmanuel Ibe Alison-Madueke, Diezani
Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 4, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770194618
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770194618?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. R eproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Jump as Drilling Drops; Number of oil and natural-gas rigs fell to just above the record low in the past week
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Mar 2016: n/a.
Abstract:
The number of rigs drilling for crude in the U.S., which is viewed as a rough proxy for activity in the oil industry, dropped by eight in the past week to 392, the lowest level since 2009, oil-field-services company Baker Hughes Inc. said Friday.
Full text: U.S. oil prices rose for a third consecutive week as drilling continued to decline. The number of rigs drilling for crude in the U.S., which is viewed as a rough proxy for activity in the oil industry, dropped by eight in the past week to 392, the lowest level since 2009, oil-field-services company Baker Hughes Inc. said Friday. The combined number of oil and natural-gas rigs fell by 13 to 489, just above the record low of 488 rigs in 1999, according to Baker Hughes data starting in late 1948. "We're starting to see a lot of erosion in U.S. production," said Carl Larry, director of oil and gas at Frost & Sullivan. "We're inching our way back to $40." U.S. oil output has fallen from a peak in April as companies sharply cut spending on new drilling, but it hasn't declined as much as some investors expected because producers increased their efficiency and lowered drilling costs. Some analysts say U.S. production is due to drop more quickly this year because companies have announced new budget cuts in recent weeks. "You're on the path to getting a little bit more balance between supply and demand globally," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. "The factors are moving in place to begin to establish at least the lower [boundary] in oil prices." Light, sweet crude for April delivery settled up $1.35, or 3.9%, Friday at $35.92 a barrel on the New York Mercantile Exchange, the highest settlement since Jan. 5. Prices are up 37% from the 13-year low reached last month. For the week, U.S. crude was up 9.6%. Brent, the global benchmark, rose $1.65, or 4.5%, Friday to $38.72 a barrel on ICE Futures Europe, the highest close since Dec. 10. Prices are up 3.9% this year. Friday marked the first session in 2016 that Brent prices settled positive for the year to date. The global oil market remains oversupplied. U.S. inventories of crude oil rose more than expected in the week ended Feb. 26 and stand at the highest level in more than 80 years, according to the Energy Information Administration. Prices held their gains Friday after U.S. data showed stronger-than-expected jobs growth in February. Increased employment can add to oil demand, as more commuters drive to work. Talks among major producers, including Russia and members of the Organization of the Petroleum Countries, about freezing their output also have boosted prices in recent weeks. Emmanuel Ibe Kachikwu, Nigeria's oil minister, said Thursday that a meeting between OPEC and non-OPEC countries will take place on March 20 in Moscow to "fine-tune collaborative strategies," according to a statement from the Nigerian National Petroleum Corp. Iran, however, has indicated it won't join the freeze plan. Iran's production is expected to rise this year now that sanctions have been lifted, and market watchers say increased Iranian output could offset any decrease by other producers. Some analysts also are skeptical of the plan because some countries' January output levels were near record highs. Gasoline futures rose 3.33 cents, or 2.6%, Friday to $1.3321 a gallon, the highest level since Dec. 1. Prices rose 2.9% for the week. Diesel futures advanced 4.11 cents, or 3.7%, to $1.1613 a gallon, posting an 8.9% weekly gain. Georgi Kantchev contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Crude oil prices; Petroleum industry; Supply & demand; Futures
Location: United States--US
People: Kachikwu, Emmanuel Ibe
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Frost & Sullivan; NAICS: 541910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770194669
Document URL: https://login .ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770194669?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
BP CEO Gets 20% Rise in Total Pay Despite Oil Price Slump Hitting Earnings; Company continued freeze on executives' salaries and said they would remain static in 2016
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Mar 2016: n/a.
Abstract:
BP said its compensation committee focused on Mr. Dudley's success in bringing down costs and spending, a strong safety record for the year and operating cash flow and underlying profits that beat internal targets.
Full text: LONDON--BP PLC Chief Executive Bob Dudley received a 20% bump in his total compensation package last year, bringing it to $19.6 million despite a continuing slump in oil prices that has battered the energy giant's earnings . Mr. Dudley got a boost in 2015 from a $1.4 million cash bonus--up from about $1 million in 2014--and a doubling of his retirement savings from 2014 to $6.5 million, the company said in its annual report released on Friday. Overall, the company continued a freeze on its executives' salaries and said they would remain static in 2016 given the low oil prices. Mr. Dudley's actual salary of about $1.9 million was little changed from 2014. BP is the first of the so-called oil majors to release details of executive pay in 2015--a year defined by a nearly 50% drop in oil prices that hammered the entire sector. Mr. Dudley's compensation increase reflects a year in which BP lost $5.2 billion. The company announced plans this year to cut 7,000 jobs by the end of 2017 and has slashed spending to help manage the slump. Mr. Dudley should be accustomed to operating under such pressure. The 60-year-old executive's time at the head of the company has been defined by crises--BP's disastrous 2010 blowout in the Gulf of Mexico followed by one of the biggest oil slumps in the markets history. Though sizable, Mr. Dudley's pay package is still much smaller when compared with the heads of America's largest oil companies. In 2014, Exxon Mobil Corp. CEO Rex Tillerson received compensation valued at $33 million and Chevron Corp.'s head John Watson got a $26 million package. Such massive payouts have in the past led to tensions with investors. For instance, last year, shareholder advisory group Glass Lewis recommended investors vote down Mr. Dudley's proposed pay for 2014, though ultimately the package received approval at the company's annual meeting. BP said its compensation committee focused on Mr. Dudley's success in bringing down costs and spending, a strong safety record for the year and operating cash flow and underlying profits that beat internal targets. Mr. Dudley was one of the first oil executives to warn that the era of low prices would last longer than many expected. "The company's decision in late 2014 to plan for a 'lower for longer' oil price meant that the leadership acted early and decisively to respond to the low oil price environment," BP said in the annual report, filed with the Securities and Exchange Commission on Friday. "Overall, management delivered very well in terms of what they could control." BP said Mr. Dudley's pay package isn't as large as it looks because U.K. reporting requirements have inflated the increase in Mr. Dudley's pension. The company said their top executive's pension savings increased by $309,000 last year. That number has been multiplied by 20 in the report to comply with U.K. regulations, but the company said a U.S. plan like Mr. Dudley's would more typically have an annuity factor of around 14. Excluding pension and retirement savings the executive's pay slipped to $13.1 million in 2015, compared with $13.4 million a year earlier. He received $9.7 million from a deferred bonus and performance-linked shares, down from $10.4 million in 2014. Along with his salary and cash bonus, he received $119,000 for a car, security and other benefits. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Executive compensation; Petroleum industry; Chief executive officers; Prices; Wages & salaries
Location: United States--US
People: Tillerson, Rex W
Company / organization: Name: Securities & Exchange Commission; NAICS: 926150; Name: Chevron Corp; NAICS: 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 4, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770206641
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770206641?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Norway Taps Oil Fund for First Time as Falling Oil Price Takes Its Toll; Fund will continue to grow, at least as long as its returns outpace government spending, says official
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Mar 2016: n/a.
Abstract:
Over the last decade, it ballooned to 7 trillion kroner--or around $150,000 per man, woman and child in Norway--from 1 trillion kroner, mainly due to higher oil prices. Since 1996, the government has pumped 3.5 trillion kroner into the fund, but last year that inflow nearly ground to a halt, amid a roughly 70% drop in oil prices since mid-2014.
Full text: OSLO--Norway's government in January tapped into its sovereign-wealth fund to cover its expenses, for the first time since the fund was established in 1996, in another sign that falling oil revenues are taking a toll on crude producers. This year is set to be an inflection point for Norway, western Europe's largest oil producer and exporter, as it expects to make use of its rainy-day fund sooner than planned. In January, the fund transferred 6.7 billion kroner ($781 million) to the government, the first such transfer since the fund was set up, according to the country's Ministry of Finance. Until now, the government has pumped nearly 200 billion kroner a year into the fund on average. But this year, it may spend as much as 80 billion kroner from the wealth fund's returns, according to Norway's central bank. Norway is not the only oil producer to turn to their wealth funds for resources as oil revenues tanked. As an effect, some of the world's biggest investors, including Norway's sovereign-wealth fund, will have less money at hand to prop up global markets. "The fact that oil revenues would become too small to cover the government budget deficit was assumed from the beginning," said Paal Bjornestad, a state secretary in the country's Ministry of Finance. "Due to low oil prices, this came earlier than expected, but there will still be an inflow to the fund." Mr. Bjornestad said that Norway's piggy bank will continue to grow, at least as long as its returns outpace government spending. The fund is set up to last forever, due to the government's annual spending limit of 4% of its value--which is equal to the fund's expected long-term average returns. Related * T he Trouble With Sovereign-Wealth Funds * Five Things About Sovereign-Wealth Funds But without any government cash transfers, a period of unprecedented growth may be over for the fund . Over the last decade, it ballooned to 7 trillion kroner--or around $150,000 per man, woman and child in Norway--from 1 trillion kroner, mainly due to higher oil prices. Since 1996, the government has pumped 3.5 trillion kroner into the fund, but last year that inflow nearly ground to a halt, amid a roughly 70% drop in oil prices since mid-2014. The fund has returned more than 2.3 trillion kroner on its investments since 1998, and its value has increased another 1.1 trillion kroner as the krone weakened against foreign currencies. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Budget deficits
Location: Norway Europe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770388614
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770388614?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Rig Count Falls to 2009 Levels; First time level has fallen below 400 since late 2009
Author: Minaya, Ezequiel; Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Mar 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs dropped in the latest week by five to 97, a fall to levels unheard of in Baker Hughes' current format, which dates back to 1987.
Full text: The U.S. oil-rig count fell by eight to 392 in the latest week, according to Baker Hughes Inc., reaching levels last seen in late 2009. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the oil industry, has fallen sharply since oil prices began to fall. The latest total of 392 active oil rigs marks the first time it has fallen below 400 since late 2009. There are now about 69% fewer rigs of all kinds from a peak of 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs dropped in the latest week by five to 97, a fall to levels unheard of in Baker Hughes' current format, which dates back to 1987. The U.S. offshore-rig count was 24 in the latest week, down three rigs from last week and down 27 rigs from a year ago. In total, the U.S. rig count is down 13 from last week at 489. Oil prices rose Friday on a weaker dollar and expectations of another large drop in U.S. drilling. Prices held their gains after U.S. data showed stronger-than-expected job growth in February. Recently, U.S. crude oil climbed 3.6% to $35.83 a barrel. Write to Ezequiel Minaya at ezequiel.minaya@wsj.com and Dan Molinski at Dan.Molinski@wsj.com Credit: By Ezequiel Minaya and Dan Molinski
Subject: Petroleum industry; Oil service industry
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770407233
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770407233?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Jump as Number of Rigs Falls --- Gauge of activity in crude industry drops to lowest since 2009; 'inching...back to $40'
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Mar 2016: B.5.
Abstract:
The number of rigs drilling for crude in the U.S., which is viewed as a rough proxy for activity in the oil industry, dropped by eight in the past week to 392, the lowest level since 2009, oil-field-services company Baker Hughes Inc. said Friday.
Full text: U.S. oil prices rose for a third consecutive week as drilling continued to decline. The number of rigs drilling for crude in the U.S., which is viewed as a rough proxy for activity in the oil industry, dropped by eight in the past week to 392, the lowest level since 2009, oil-field-services company Baker Hughes Inc. said Friday. The combined number of oil and natural-gas rigs fell by 13 to 489, just above the record low of 488 rigs in 1999, according to Baker Hughes data starting in late 1948. "We're starting to see a lot of erosion in U.S. production," said Carl Larry, director of oil and gas at Frost & Sullivan. "We're inching our way back to $40." U.S. oil output has fallen from a peak in April as companies sharply cut spending on new drilling, but it hasn't declined as much as some investors expected because producers increased their efficiency and lowered drilling costs. Some analysts say U.S. production is due to drop more quickly this year because companies have announced new budget cuts in recent weeks. "You're on the path to getting a little bit more balance between supply and demand globally," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. "The factors are moving in place to begin to establish at least the lower [boundary] in oil prices." Light, sweet crude for April delivery settled up $1.35, or 3.9%, Friday at $35.92 a barrel on the New York Mercantile Exchange, the highest settlement since Jan. 5. Prices are up 37% from the 13-year low reached last month. For the week, U.S. crude was up 9.6%. Brent, the global benchmark, rose $1.65, or 4.5%, Friday to $38.72 a barrel on ICE Futures Europe, the highest close since Dec. 10. Prices are up 3.9% this year. Friday marked the first session in 2016 that Brent prices settled positive for the year to date. The global oil market remains oversupplied. U.S. inventories of crude oil rose more than expected in the week ended Feb. 26 and stand at the highest level in more than 80 years, according to the Energy Information Administration. Prices held their gains Friday after U.S. data showed stronger-than-expected jobs growth in February. Increased employment can add to oil demand, as more commuters drive to work. Talks among major producers, including Russia and members of the Organization of the Petroleum Countries, about freezing their output also have boosted prices in recent weeks. Emmanuel Ibe Kachikwu, Nigeria's oil minister, said Thursday that a meeting between OPEC and non-OPEC countries will take place on March 20 in Moscow to "fine-tune collaborative strategies," according to a statement from the Nigerian National Petroleum Corp. Iran, however, has indicated it won't join the freeze plan. Iran's production is expected to rise this year now that sanctions have been lifted, and market watchers say increased Iranian output could offset any decrease by other producers. Some analysts also are skeptical of the plan because some countries' January output levels were near record highs. Gasoline futures rose 3.33 cents, or 2.6%, Friday to $1.3321 a gallon, the highest level since Dec. 1. Prices rose 2.9% for the week. Diesel futures advanced 4.11 cents, or 3.7%, to $1.1613 a gallon, posting an 8.9% weekly gain. U.S. oil prices rose for a third consecutive week as drilling continued to decline. The number of rigs drilling for crude in the U.S., which is viewed as a rough proxy for activity in the oil industry, dropped by eight in the past week to 392, the lowest level since 2009, oil-field-services company Baker Hughes Inc. said Friday. The combined number of oil and natural-gas rigs fell by 13 to 489, just above the record low of 488 rigs in 1999, according to Baker Hughes data starting in late 1948. "We're starting to see a lot of erosion in U.S. production," said Carl Larry, director of oil and gas at Frost & Sullivan. "We're inching our way back to $40." U.S. oil output has fallen from a peak in April as companies sharply cut spending on new drilling, but it hasn't declined as much as some investors expected because producers increased their efficiency and lowered drilling costs. Some analysts say U.S. production is due to drop more quickly this year because companies have announced new budget cuts in recent weeks. "You're on the path to getting a little bit more balance between supply and demand globally," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. "The factors are moving in place to begin to establish at least the lower [boundary] in oil prices." Light, sweet crude for April delivery settled up $1.35, or 3.9%, Friday at $35.92 a barrel on the New York Mercantile Exchange, the highest settlement since Jan. 5. Prices are up 37% from the 13-year low reached last month. For the week, U.S. crude was up 9.6%. Brent, the global benchmark, rose $1.65, or 4.5%, Friday to $38.72 a barrel on ICE Futures Europe, the highest close since Dec. 10. Prices are up 3.9% this year. Friday marked the first session in 2016 that Brent prices settled positive for the year to date. The global oil market remains oversupplied. U.S. inventories of crude oil rose more than expected in the week ended Feb. 26 and stand at the highest level in more than 80 years, according to the Energy Information Administration. Prices held their gains Friday after U.S. data showed stronger-than-expected jobs growth in February. Increased employment can add to oil demand, as more commuters drive to work. Talks among major producers, including Russia and members of the Organization of the Petroleum Countries, about freezing their output also have boosted prices in recent weeks. Emmanuel Ibe Kachikwu, Nigeria's oil minister, said Thursday that a meeting between OPEC and non-OPEC countries will take place on March 20 in Moscow to "fine-tune collaborative strategies," according to a statement from the Nigerian National Petroleum Corp. Iran, however, has indicated it won't join the freeze plan. Iran's production is expected to rise this year now that sanctions have been lifted, and market watchers say increased Iranian output could offset any decrease by other producers. Some analysts also are skeptical of the plan because some countries' January output levels were near record highs. Gasoline futures rose 3.33 cents, or 2.6%, Friday to $1.3321 a gallon, the highest level since Dec. 1. Prices rose 2.9% for the week. Diesel futures advanced 4.11 cents, or 3.7%, to $1.1613 a gallon, posting an 8.9% weekly gain. Credit: By Nicole Friedman
Subject: Crude oil; Commodity prices
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2016
Publication date: Mar 5, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770472684
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770472684?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Crude-Oil Prices Extend Gains as Market Turns More Bullish; May Brent crude on London's ICE Futures exchange rose $0.64 to $39.36 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Mar 2016: n/a.
Abstract:
According to Nigeria's oil minister, officials from oil-producing nations will meet on March 20 in Moscow to discuss the details of the pact.
Full text: Crude-oil prices extended gains in early Asian trade Monday as the market turned more bullish on expectations of smaller supply and growing demand. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $36.51 a barrel at 0210 GMT, up $0.59 in the Globex electronic session. May Brent crude on London's ICE Futures exchange rose $0.64 to $39.36 a barrel. Oil prices have been climbing steadily in recent weeks, powered by expectations of a production freeze. At least four countries so far, including Russia and Saudi Arabia but not Iran, have pledged to cap future oil productions at January's levels. Many analysts say that while the move will do little to abate the glut, it is still a step in the right direction and possibly opens the door for future concessions. According to Nigeria's oil minister, officials from oil-producing nations will meet on March 20 in Moscow to discuss the details of the pact. There have been other signs that low oil prices are weighing on production plans. Last week, the number of rigs drilling for crude in the U.S. dropped by eight to 392, to the lowest level since 2009, according to industry group Baker Hughes. The combined number of oil and natural-gas rigs fell by 13 to 489, just above the record low of 488 rigs in 1999, the group said. U.S. shale production has also ebbed from its peak level in April of last year, emphasizing the financial struggles seen across the energy sector. "The tight credit market will make it difficult for U.S. shale producers to refinance upcoming debt, and we may see an accelerated decline in U.S. oil production in 2016 to 2017," says ANZ. Outlook for global oil demand is also brightening. In February, U.S. job growth rebounded as nonfarm payrolls increased by 242,000 and gains in the prior two months were revised up by 30,000. Increased employment can add to oil demand as more commuters drive to work. Over the weekend, Premier Li Keqiang laid out China's target economic growth should average at least 6.5% over the next five years. The country's top economic-planning agency also ruled out any possibility of a hard landing and rebutted the claim that China's slower growth is a drag on the global economy. "China's oil import will remain strong, because domestic crude production is declining and appetite for foreign crude by the independent refineries is growing," said Gao Jian, an energy analyst at the Shandong-based SCI International. Investment group CLSA estimates China's oil majors will cut domestic oil production by 4% to 5% in 2016 and a further 3% next year. "It seems to us that Beijing has a higher tolerance of ever-increasing crude oil, and we expect the import ratio to hit 70% by 2018, if not earlier, from just above 60% in 2015," said CLSA analyst Nelson Wang, tipping crude imports by the world's biggest energy consumer to grow 6% in 2016, after the 8.8% year-over-year growth in the previous year. This week, the market will be taking cues from China's February trade data report set for release Tuesday as well as the U.S.'s weekly report on crude inventories and production to be issued Wednesday. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--rose 152 points to $1.3473 a gallon, while April diesel traded at $1.1715, 102 points higher. ICE gasoil for March changed hands at $346.00 a metric ton, up $9.25 from Friday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Petroleum industry; Crude oil prices; Petroleum production; Energy industry
Location: China Iran Russia United States--US Saudi Arabia
People: Li Keqiang
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770796486
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770796486?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Sasol Boosts Cost Savings as Oil Price Hits Profit; The South African petrochemical and energy major was hit by a sharply declining Brent crude oil price
Author: Wexler, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Mar 2016: n/a.
Abstract:
Over the course of the six months ended Dec. 31, Sasol was hit by a 47% decline in the average Brent crude oil price, but that decrease was partly offset by a 24% drop in the average rand to U.S. dollar exchange rate during the period.
Full text: JOHANNESBURG--South African petrochemical and energy major Sasol Ltd. reported a steep drop in net profit for the six months ended Dec. 31, in line with expectations amid a global slump in oil prices. Sasol on Monday posted a profit of 7.31 billion South African rand ($475 million) for the first half of its fiscal year, down 63% from the first half of fiscal 2015, as the company continued to cut costs in response to lower crude prices. Headline earnings per share, the preferred profit measure that strips out certain exceptional and one-off items, fell 24% to 24.28 rand, in line with expectations. The company said Monday it had updated and extended the scope of its low oil price response plan against the backdrop of a $30-a-barrel oil price, reducing overall head count by 14%, or 4,900 employees. The company also said that it was finished cutting head count. Sasol had previously said it would conserve between 30 billion rand and 50 billion rand between Jan. 1, 2015, and June 30, 2017, by cutting back on capital projects, as well as through buyouts and early retirements. On Monday it extended that amount to between 65 billion rand and 75 billion rand through June 30, 2018. "Those are levers we can pull harder on or relax on," Sasol Chief Executive David Constable told The Wall Street Journal. A big expansion in Mozambique will now focus on gas first, then oil, rather than both at the same time. An ethane cracker in Louisiana is going ahead at a slower pace, while the company is cutting back its drilling in Canada. Sasol is forecasting oil prices at $40 a barrel for the remainder of its 2016 fiscal year, as well as 2017. Still, "there are some encouraging signs we might be nearing the bottom or seeing the bottom," Mr. Constable said. Sasol's revenue was down 15% at 84.48 billion rand in the latest period from a year earlier, beating expectations of a 21% slide. The company's shares have risen 14% in the year-to-date. Sasol declared a gross dividend of 5.70 rand a share, down 19% from the first half of 2015--part of Sasol's cash-conserving strategy. Over the course of the six months ended Dec. 31, Sasol was hit by a 47% decline in the average Brent crude oil price, but that decrease was partly offset by a 24% drop in the average rand to U.S. dollar exchange rate during the period. Write to Alexandra Wexler at alexandra.wexler@wsj.com Credit: By Alexandra Wexler
Subject: Crude oil prices; Rands; Petroleum industry; Stock prices; Corporate profits
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 7, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770813137
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770813137?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks Edge Higher After Recent Rally; Energy shares rise as oil prices climb
Author: Kuriloff, Aaron; Gold, Riva
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Mar 2016: n/a.
Abstract:
[...]Monday, U.S. oil-field-services company Baker Hughes said the number of rigs drilling for oil and natural gas globally fell in February to the lowest level since 2002, while the U.S. Energy Information Administration said it expects April production declines in key shale-drilling regions.
Full text: U.S. stocks tiptoed to their longest rally since October as a rise in oil prices lifted energy shares. Investors said Monday's small moves marked a pause after major indexes bounced back from February lows to near their highest levels this year on signs of strength in the U.S. economy. After a three-week rebound that propelled the Dow industrials above 17000 for the first time since early January, some investors and traders said they were taking a wait-and-see approach ahead of Thursday's European Central Bank meeting, which many expect will produce additional stimulus efforts. Read More * Investors Anxious Ahead of ECB Rate Decision * Europe's Banks Find a Dumping Ground for Losses * Trump's Three Friends in Finance "People are definitely watching and being somewhat circumspect in their investing," said Tom Carter, managing director at JonesTrading. The Dow Jones Industrial Average rose 67.18 points, or 0.4%, to 17073.95, and the S&P 500 climbed 1.77 points, or 0.1%, to 2001.76. Both indexes rose for a fifth session in a row, their longest winning streaks since October. The Nasdaq Composite declined 8.77 points, or 0.2%, to 4708.25. Chevron and Exxon Mobil were among the biggest gainers in the Dow. The energy sector led gains in the S&P 500, with Murphy Oil rising $2.99, or 13%, to $26.69 and Southwestern Energy gaining 76 cents, or 9.7%, to 8.59. A rebound in commodities prices that helped stoke the recent rally extended into Monday, as U.S. crude oil rose 5.5% to $37.90 a barrel. Oil prices are up 45% from a 13-year low in February. Oil prices have risen steadily since Russia, Saudi Arabia, Venezuela and Qatar tentatively agreed last month to freeze their output at January levels. The United Arab Emirates' energy minister said Monday that current prices were forcing all suppliers to freeze production. Also Monday, U.S. oil-field-services company Baker Hughes said the number of rigs drilling for oil and natural gas globally fell in February to the lowest level since 2002, while the U.S. Energy Information Administration said it expects April production declines in key shale-drilling regions. Some analysts warned, however, that the oil rally could be stopped by still-ample inventories of crude and refined products, with U.S. crude-oil stockpiles at their highest level in more than 80 years. With U.S. economic data easing fears of recession, investors have bought back into some of the assets they sold off earlier this year, while junk-bond yield spreads have narrowed and volatility has receded. Friday's strong U.S. jobs report further calmed concerns, helping to push up the yield on the 10-year Treasury note to 1.902%, its highest yield since Feb. 1, from 1.883% Friday. Gold prices fell 0.5% to $1,263.20 an ounce. "There's been a collective sigh of relief after starting the year in such a sloppy manner," said Gordon Charlop, managing director at Rosenblatt Securities. Investors also were turning their attention to efforts in Europe and China to prop up slowing economies. European Central Bank officials are widely expected to cut a key interest rate further into negative territory Thursday and expand the bank's stimulus measures to combat persistent weakness in the region's growth and inflation. "There are many different combinations of additional easing that [ECB President Mario] Draghi can put out," said Nandini Ramakrishnan, global market strategist at J.P. Morgan Asset Management. The Stoxx Europe 600 declined 0.3% as shares in banking companies fell. Chinese shares rose after authorities mapped out plans to buoy growth and said they expect the economy to grow between 6.5% and 7% this year, which is the lowest growth target that Beijing has set in a quarter of a century. The Shanghai Composite Index rose 0.8% Monday. The benchmark price for iron ore , a key steelmaking ingredient, rallied to a nine-month high after Chinese leaders said they would prioritize economic growth over restructuring this year, signaling the potential for more stimulus measures. Shares in Australia rose 1% to close at their highest level in more than two months as mining companies gained. Japan's Nikkei Stock Average fell 0.6% on Monday, while shares in Hong Kong fell less than 0.1%. Nicole Friedman contributed to this article. In the Markets * Oil Prices Lifted by Supply Cut Hopes * China Shares Climb * U.S. Government Bonds Under Pressure * Gold Wavers as Fed Decision Awaited Write to Aaron Kuriloff at aaron.kuriloff@wsj.com and Riva Gold at riva.gold@wsj.com Credit: Aaron Kuriloff; Riva Gold
Subject: Central banks; Petroleum industry; Recessions; Energy industry
Location: United States--US Europe
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Murphy Oil Corp; NAICS: 211111, 213112; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 7, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770817920
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770817920?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
UAE Energy Minister Sees Global Crude Markets Correcting Before Year-End; Current prices are forcing oil producers to freeze output, while demand remains solid, says minister
Author: Parasie, Nicolas; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Mar 2016: n/a.
Abstract:
ABU DHABI--Global crude markets will see a correction before the end of this year as current prices are forcing all producers to freeze their production, the United Arab Emirates' energy minister Suhail bin Mohammed al-Mazrouei said Monday.
Full text: ABU DHABI--Global crude markets will see a correction before the end of this year as current prices are forcing all producers to freeze their production, the United Arab Emirates' energy minister Suhail bin Mohammed al-Mazrouei said Monday. "I believe the current prices are forcing everyone to freeze. It's happening as we speak. It doesn't make any sense for anyone to increase the production with the current prices," the minister told reporters on the sidelines of an aerospace conference in Abu Dhabi. "To the contrary, many producing assets are losing now at the current oil prices and I think those are all [outside the Organization of the Petroleum Exporting Countries]. This is all good news for balancing the market. We just need to be patient," he said. Mr. Mazrouei said that he was optimistic prices will see some correction before the end of this year, adding there is evidence every day that the glut in the market is decreasing while demand is solid. Crude oil prices have plunged more than 70% since June 2014, largely because of surging supplies from the U.S., Russia and OPEC members including Saudi Arabia, Iraq, Nigeria and Iran. Last month, the energy ministers of Saudi Arabia and Russia--the world's two largest crude-oil exporters--agreed with Qatar and Venezuela to freeze their production at the January levels amid mounting pressure to prop up slumping oil prices. Ibe Kachikwu, Nigeria's minister of state for petroleum resources, said last week that some OPEC members are scheduled to meet with other producers, including Russia, on March 20 in Moscow to fine-tune talks on the output freeze. His comments were the first by an official providing details of the timing and location of a possible meeting. Mr. Mazrouei, however, said that OPEC member U.A.E. hasn't yet received an official invitation to attend the meeting but the country "is always cooperating with non-OPEC and if there is an unanimous decision to meet among the majority members of OPEC we will meet." Two Persian Gulf Arab OPEC delegates told The Wall Street Journal that no decision has been made yet on either the date or the location of the meeting between OPEC and producers from outside the group. A third delegate familiar with the Saudi thinking said Gulf countries prefer to have the gathering in Doha in the first half of April. Write to Nicolas Parasie at nicolas.parasie@wsj.com and Summer Said at summer.said@wsj.com Credit: By Nicolas Parasie and Summer Said
Subject: Crude oil prices; Petroleum industry
Location: Nigeria Russia United Arab Emirates Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770820289
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770820289?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Lifted by Supply-Cut Hopes; UAE energy minister says current prices are forcing suppliers to freeze production
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Mar 2016: n/a.
Abstract:
Oil-field services company Baker Hughes Inc. said Monday that the number of rigs drilling for oil and natural gas around the world fell by 130 in February to 1,761 rigs, the lowest level since 2002.
Full text: Oil prices surged Monday on hopes that declines in oil drilling around the world and an output deal among major producers would shrink the global glut of crude. U.S. oil prices have climbed 45% off a 13-year low reached in February, as investors have focused on talks among producing nations about freezing output and expectations that U.S. production will keep falling. However, some analysts warn that the rally could be halted by still-ample inventories of crude oil and refined products. In the U.S., crude-oil stockpiles stand at the highest level in more than 80 years. The U.S. benchmark contract settled up $1.98, or 5.5%, to $37.90 a barrel on the New York Mercantile Exchange, the highest settlement price since Dec. 24. Brent, the global benchmark, climbed $2.12, or 5.5%, to $40.84 a barrel on ICE Futures Europe, the highest level since Dec. 4. The oil-price rally is extending to consumers. The national average price at the pump rose six cents in the past week, the biggest one-week gain since the start of 2016, the American Automobile Association said. At $1.812 a gallon, the average retail gasoline price is still 64.6 cents lower than a year ago. Gasoline prices are likely to keep rising, the organization said, as refiners produce less fuel while undergoing seasonal maintenance. The oil-price rout that started in mid-2014 has forced companies to slash spending on new drilling. Oil-field services company Baker Hughes Inc. said Monday that the number of rigs drilling for oil and natural gas around the world fell by 130 in February to 1,761 rigs, the lowest level since 2002. In the U.S., the number of rigs drilling for oil and natural gas stands at the lowest level since 1999, according to Baker Hughes. Despite a large decline in drilling, U.S. production has fallen more slowly than many investors and analysts expected in the past year because companies lowered their costs and improved efficiency, and new offshore projects in the Gulf of Mexico started up. Some market participants are calling for U.S. output to decline more quickly this year, because companies have announced new spending cuts. The Energy Information Administration said Monday that it expects oil production in the seven key shale-drilling regions to drop by more than 100,000 barrels a day in April compared with March. Oil prices have risen steadily in recent weeks after Russia, Saudi Arabia, Venezuela and Qatar agreed last month to freeze their output at January levels in an effort to support prices. A broader meeting among members of the Organization of the Petroleum Exporting Countries and non-OPEC members is expected to take place this month or next. On Monday, the United Arab Emirates's energy minister said that current prices are forcing all suppliers to freeze their production. "It doesn't make any sense for anyone to increase the production with the current prices," Suhail bin Mohammedal-Mazrouei told reporters on the sidelines of an aerospace conference in Abu Dhabi. "This is all good news for balancing the market. We just need to be patient." In addition, Ecuador's foreign minister said on his Twitter account that Latin American oil producers will meet in Quito, Ecuador, on Friday to discuss a common position on oil prices. However, Iran, which is expected to increase its production this year, hasn't agreed to the freeze. "The big risk is that the meeting proves a disappointment and prices fall back sharply on any lack of further progress," said Barclays analyst Kevin Norrish. The recent price rally reduces the likelihood that countries will limit their output, said brokerage PVM in a note. "The current oil-price strength will prove to be too big a temptation for both cash-strapped OPEC and non-OPEC producers to resist maximizing output and oil revenues," the brokerage said. Growing crude inventories could send oil prices plunging again, particularly in the U.S., analysts said. Data provider Genscape Inc. told clients Monday that inventories in the key storage hub of Cushing, Okla., rose to a new high in the week ended March 4, according to a broker who viewed the data. "The past days' oil price rally was from our perspective less related to a shift in fundamentals but a recovery of sentiment," said Norbert Ruecker, head of commodities research at Julius Baer, in a note. "We still believe that oil prices experience a short-term bounce but no long-term recovery" due to increased production from Iran and resilient U.S. output. Gasoline futures settled up 6.06 cents, or 4.5%, to $1.3927 a gallon, the highest settlement since Nov. 25. Diesel futures rose 6.12 cents, or 5.3%, to $1.2225 a gallon, the highest level since Dec. 10 Georgi Kantchev and Benoit Faucon contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Petroleum production; Gasoline prices; Price increases
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: American Automobile Association; NAICS: 813990, 561599
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770824869
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770824869?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Gold Retreats From 13-Month Highs; Precious metal also weighed down by a strong dollar and higher oil prices
Author: Cui, Carolyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Mar 2016: n/a.
Abstract:
In recent days gold prices have tended to move in narrow ranges as investors anticipate policy meetings of the European Central Bank and the Federal Reserve at which those bodies are expected to further widen their interest-rate gaps.
Full text: Gold prices edged down Monday after spending most of the day shuffling between gains and losses amid uncertainty ahead of the rate decisions by two of the world's biggest central banks. Gold futures for March delivery lost 0.5%, or $6.7, to close at $1,263.20 a troy ounce at the Comex division of CME Group. With Monday's losses, gold snapped a three-session winning streak and retreated from a 13-month high hit in the previous session at $1,269.90 an ounce. In recent days gold prices have tended to move in narrow ranges as investors anticipate policy meetings of the European Central Bank and the Federal Reserve at which those bodies are expected to further widen their interest-rate gaps. The precious metal was weighed down by a strong dollar and higher oil prices Monday as some money chased higher returns in riskier assets. Despite Monday's modest losses some investors said the bullish case for gold remains intact, arguing the price will continue to rise amid currency instability, negative interest rates and sluggish economic growth. "Central banks are coming in slowly and cautiously on negative interest rates. If growth continues to be an issue, we're probably just seeing the beginning of the negative interest rates," said Paul Wong, a portfolio manager at Sprott Asset Management. Gold finds it easier to compete with yield-bearing assets, like Treasurys, when interest rates are near zero. Bullion-backed exchange-traded funds have seen big inflows since the beginning of this year. More broadly, some analysts believe the precious metal is being supported by improved investor sentiment for commodities as a whole. "The fact prices are holding up when other commodities and markets are rallying suggests there may be some broad-based movement into commodity baskets," said William Adams, head of research at Fastmarkets. Among the other precious metals, silver was down 0.4% at $15.633 an ounce, platinum was up 1.6% at $1,002 an ounce and palladium was up 2.6% at $577.60 an ounce. Ese Erheriene contributed to the article. Write to Carolyn Cui at carolyn.cui@wsj.com Credit: By Carolyn Cui
Subject: Central banks; Interest rates; Gold markets; Prices
Location: United States--US New York
Company / organization: Name: European Central Bank; NAICS: 521110; Name: CME Group; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1770937194
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1770937194?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Pare Gains; Brent Remains Above $40; May Brent crude on London's ICE Futures exchange fell $0.59 to $40.25 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2016: n/a.
Abstract:
BMI Research takes a more bearish view, saying the discussions of a production freeze "are largely a verbal intervention," and Saudi Arabia will raise its production when prices climb in the second quarter. [...]at above 500 million barrels, U.S. crude inventories remains at a level unseen since 1930, according to EIA's monthly data.
Full text: Crude oil prices edged down in early Asia trade Tuesday on profit-taking following an overnight surge, but Brent remains at above $40 a barrel on increasing expectations for shrinking global supply. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $37.39 a barrel at 0240 GMT, down $0.51 in the Globex electronic session. May Brent crude on London's ICE Futures exchange fell $0.59 to $40.25 a barrel. Brent, the international benchmark, broke the $40 level overnight and settled at the highest level since early December. "Sentiment continues to improve as discussion about a production freeze lingers," said ANZ Research, noting that more traders are cutting their short positions. Oil prices have risen steadily in recent weeks after Russia, Saudi Arabia, Venezuela and Qatar agreed last month to freeze their output at January levels in an effort to support prices. A broader meeting among members of the Organization of the Petroleum Exporting Countries and non-OPEC members is expected to take place this month or next. Other encouraging signs fueling the positive sentiment include the steady, albeit slow, reduction in U.S. crude output and the number of active oil rigs in the U.S. However, the bullish sentiment is offset by worries that the overhang will take a long time to wind down, even if a freeze is in place. "A production freeze probably won't make much of a difference because the market is so oversupplied. We expect heavy selling pressure at this price level," said Daniel Ang, a Phillip Futures energy analyst. BMI Research takes a more bearish view, saying the discussions of a production freeze "are largely a verbal intervention," and Saudi Arabia will raise its production when prices climb in the second quarter. Moreover, at above 500 million barrels, U.S. crude inventories remains at a level unseen since 1930, according to EIA's monthly data. In a survey of analysts by Platts, U.S. crude stocks likely increased by 3 million barrels last week, while gasoline stocks likely fell by 1.5 million barrels. The weekly data by the EIA will be released Wednesday. Traders will be monitoring China's February trade data released later Tuesday for cues. In January, China's crude imports fell 4.6% to 26.7 million tons. Analysts, however, said given that many Chinese factories were closed for a week last month for the Lunar New Year, the data may be skewed. Nymex reformulated gasoline blendstock for April, the benchmark gasoline contract, fell 51 points to $1.3876 a gallon, while April diesel traded at $1.2170, 55 points lower. ICE gasoil for March changed hands at $362.00 a metric ton, up $7.00 from Monday's settlement. Credit: By Jenny Hsu
Subject: Crude oil prices; Petroleum industry; Futures
Location: United States--US Asia Saudi Arabia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771005216
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771005216?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall Back After Recent Gains; Analysts caution recent market rally is unsustainable
Author: Berthelsen, Christian; Malek, Miriam; Baxter, Kevin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2016: n/a.
Abstract:
The U.S. Energy Department also said production was proving more robust than expected and lowered forecasts for average prices this year and next, and analysts said they expected another sizable increase in domestic stockpiles in data to be released Wednesday.
Full text: Oil prices sold off sharply Tuesday, giving back a big chunk of prior-day surge, as fresh signals of global oversupply and weak demand buffeted the market and analysts cautioned that the recent market rally appears unsustainable. The benchmark U.S. crude contract settled down 3.7% at $36.50 a barrel on the New York Mercantile Exchange, undoing much of Monday's 5.5% jump. The global Brent contract fell 2.9% to $39.65. Both contracts are up more than 40% from the depths of multiyear lows in the $20-range hit in January and February. Overall, investors appeared to be taking stock of the run-up in oil prices over the past month and heeding analysts who note the world's oversupply of oil is still high and that supply-and-demand fundamentals haven't yet begun to recover. The market was also buffeted with a series of headlines Tuesday reinforcing the notion that a recovery remains far off. "I thought the $10 rally in oil prices was overextended at $5," said Gene McGillian, a senior energy analyst at brokerage Tradition Energy in Stamford, Conn. "The fundamental picture throughout this rally has not been supportive of a turnaround." The market opened lower as investors absorbed overnight data from China showing a steep drop in exports, which the market took as a sign of slowing economic activity--and weakening oil demand--in the country. China is the world's second-largest source of oil demand and a leading driver of demand growth, and any weakness there could potentially push the oil market recovery further off. Meanwhile, Kuwait's oil minister signaled it would be unwilling to freeze production unless Iran agreed to as well and a new research report from Goldman Sachs Group Inc. said the rally appeared unsustainable. The U.S. Energy Department also said production was proving more robust than expected and lowered forecasts for average prices this year and next, and analysts said they expected another sizable increase in domestic stockpiles in data to be released Wednesday. Oil prices have surged in recent weeks as investors feel increasingly confident that the market bottomed out in late February near $27 a barrel, with the large number of bearish traders closing out short bets--which can exacerbate rallies. Optimists believe weak prices will finally force U.S. producers to slash output, reducing supplies on the market. U.S. production has been edging down but remains above 9 million barrels a day. But some analysts believe it is too early to sound the all-clear on this market. In a note on Tuesday, Goldman Sachs said that a price of $40 a barrel is unsustainable and a longer period of low prices is needed before the market begins to fully rebalance in the second half of 2016. "Energy needs lower prices...to finish the rebalancing process; otherwise, an oil price rally will prove self-defeating as it did last spring," the bank said. In refined product markets, gasoline futures were down 0.4% at $1.3878 a gallon and diesel futures were down 1.8% at $1.20 a gallon. Meanwhile, the American Petroleum Institute, an industry group, said in a report late Tuesday that U.S. crude supplies rose by 4.4 million barrels in the latest week, according to market participants. It also reported a 2.1-million-barrel decrease in gasoline stocks and a 128,000-barrel decline in distillate inventories, according to the market participants. Write to Christian Berthelsen at christian.berthelsen@wsj.com and Kevin Baxter at Kevin.Baxter@wsj.com Credit: By Christian Berthelsen, Miriam Malek and Kevin Baxter
Subject: Petroleum industry; Prices; Investments
Location: China United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771114691
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771114691?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Energy Agency Sees Lower Global Oil Prices; EIA expects supplies to grow more than previously anticipated
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2016: n/a.
Abstract:
Robust U.S. production is also leading to abundant inventories and lower prices for natural gas, a key source of fuel for power plants and home heating and air conditioning in the U.S. Natural gas prices recently touched their lowest level in 17 years, and inventories at the end of the winter heating season this month are on track to be the highest in four years.
Full text: The U.S. Energy Department lowered its price expectations for the global Brent crude contract this year and next, saying it expected supplies to grow more than previously anticipated because robust production has persisted despite the market collapse. The U.S. Energy Information Administration, an analytic division of the Energy Department, said it expected Brent oil prices to average $34 a barrel in 2016 and $40 a barrel in 2017, down from $37 and $50, respectively, from its outlook last month. "Global inventories over the next two years are expected to grow more rapidly than previously expected because of higher world production and less oil demand due to weaker economic growth worldwide," EIA Administrator Adam Sieminski said in a prepared statement. "Higher growth in world oil inventories tends to delay the rebalancing of supply and demand in the global market, keeping prices low," Mr. Sieminksi said. That buildup in inventories is expected to translate into lower prices at the pump, with the EIA lowering its estimate of U.S. gasoline prices to an average of $1.89 a gallon in 2016, down 8 cents from its outlook a month ago and the lowest annual average since 2004. Retail gasoline prices averaged $2.43 a gallon in 2015. Cheap prices are prompting drivers to hit the road more, with gasoline demand increasing 2.7% in 2015 to 9.2 million barrels a day, the highest level since the record demand of 9.3 million barrels a day in 2007. Robust U.S. production is also leading to abundant inventories and lower prices for natural gas, a key source of fuel for power plants and home heating and air conditioning in the U.S. Natural gas prices recently touched their lowest level in 17 years, and inventories at the end of the winter heating season this month are on track to be the highest in four years. Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen
Subject: Petroleum industry; Supply & demand; Inventory; Gasoline prices; Natural gas prices
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771274460
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771274460?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi Aramco Plans to Up its Gas Output Significantly in 10 Years, CEO Says; Amin Nasser said the state-oil giant will raise its output to 'around 23 billion standard cubic feet a day'
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2016: n/a.
Abstract:
Saudi Arabian Oil Co., known as Saudi Aramco, plans to nearly double its gas production to 23 billion standard cubic feet a day in 10 years, Chief Executive Amin Nasser said Tuesday.
Full text: Saudi Arabian Oil Co., known as Saudi Aramco, plans to nearly double its gas production to 23 billion standard cubic feet a day in 10 years, Chief Executive Amin Nasser said Tuesday. The state-oil giant, which has upped its gas output from 3.5 billion standard cubic feet a day in the early 1980s to more than 12 billion cubic feet a day now, will increase its output to "around 23 billion standard cubic feet [a day] during the coming decade," Mr. Nasser told an industry conference in Jubail. Saudi Aramco, the world's largest oil and gas company, also plans to raise its refining capacity to 8 million to 10 million barrels a day from its current capacity of around 5.4 million barrels a day, he added. Write to Summer Said at summer.said@wsj.com Credit: By Summer Said
Subject: Petroleum industry; Natural gas reserves
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771277954
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771277954?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Sabine Oil & Gas May Reject Pipeline Contracts; Federal bankruptcy judge says Sabine ruling isn't binding, encourages settlement
Author: Corrigan, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2016: n/a.
Abstract:
A federal bankruptcy judge dealt a blow to pipeline operators and other midstream oil companies Tuesday, ruling that Sabine Oil & Gas Corp. can scrap pipeline deals it made before oil and gas prices plummeted .
Full text: A federal bankruptcy judge dealt a blow to pipeline operators and other midstream oil companies Tuesday, ruling that Sabine Oil & Gas Corp. can scrap pipeline deals it made before oil and gas prices plummeted . Judge Shelley Chapman of the U.S. Bankruptcy Court in Manhattan agreed to let Sabine out of the pipeline deals in a closely watched decision that energy and restructuring experts warn could roil the so-called midstream sector . "The court preliminarily finds that none of the covenants run with the land," Judge Chapman said, potentially knocking down the pipeline operators' argument that the agreements can't be broken because they are inextricably tied to the land on which Sabine operates. However, the judge added that her ruling isn't binding. She said the dispute over whether the deals can be broken raises uncertain legal issues that will have to be addressed later. Houston-based Sabine sought to exit a contract with an affiliate of Cheniere Energy Inc. because of the likelihood that it wouldn't meet the deal's requirement to deliver a certain amount of natural gas in southern Texas. Sabine also sought to reject another deal it made with a midstream company that halted construction of its pipeline in 2014. Sabine, which sought chapter 11 protection last summer to restructure some $3 billion in debt, said it could save as much as $115 million by exiting the deals and wants to be free to negotiate more favorable contracts. Write to Tom Corrigan at tom.corrigan@wsj.com Credit: By Tom Corrigan
Subject: Bankruptcy; Bankruptcy reorganization; Pipelines; Petroleum industry; Natural gas
Company / organization: Name: Cheniere Energy Inc; NAICS: 211111; Name: Sabine Oil & Gas Corp; NAICS: 211111, 211112; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 8, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771282881
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771282881?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon's Canadian Unit Sells Gas Stations for $2.1 Billion; Almost 500 Esso outlets are divvied up between five fuel distributors
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2016: n/a.
Abstract: None available.
Full text: CALGARY, Alberta--The Canadian unit of Exxon Mobil Corp. said Tuesday it has agreed to sell its remaining company-owned retail gas stations in Canada to five fuel distributors. Imperial Oil Ltd. said the deal for 497 Esso-branded outlets across Canada is worth 2.8 billion Canadian dollars ($2.1 billion). The transaction is expected to close at the end of the year subject to regulatory approvals. The buyers include Alimentation Couche-Tard Inc. for stations in Ontario and Quebec, 7-Eleven Canada Inc. for sites in Alberta and British Columbia, Harnois Groupe pétrolier Inc. for sites in Quebec, Parkland Fuel Corp. for Saskatchewan and Manitoba and Wilson Fuel Co. for sites in Nova Scotia and Newfoundland. "We believe these agreements represent the best way for Imperial to grow in the highly competitive Canadian fuels marketing business," Imperial Chief Executive Rich Kruger said in a statement. The stations involved in the deal are among 1,700 Esso retail outlets in Canada that are supplied by Imperial, which acts as a wholesaler. The deal concludes a sale process that Imperial initiated early last year. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 8, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771 297353
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771297353?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Mexico's Pemex to Use Credit Lines to Pay Suppliers; State oil company owed suppliers $8.20 billion at end of last year
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2016: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexican state oil company Petróleos Mexicanos, struggling with low oil prices, said Tuesday that it will soon use credit from government development banks to pay small and midsize suppliers to which it owes money. Last year, Pemex extended to six months the time it takes to pay suppliers for goods and services, causing financial difficulties, especially for smaller businesses that rely on the oil giant. Before, payment would take two to three months, according to a number of suppliers. At the end of last year, Pemex owed suppliers 147 billion pesos ($8.20 billion), and since February has paid more than 20 billion pesos, the company said. Pemex said it would take out loans from three development banks to pay more than 1,300 suppliers, or 85% of the companies to which it owes money. Suppliers that submitted invoices for up to 85 million pesos and "whose situation is the most vulnerable" will be paid, Pemex said. In a meeting early Tuesday with members of the congressional energy commission, Pemex Chief Executive José Antonio González Anaya said the payments should be made within days, or at the most a couple of weeks. The executive met Monday with leaders of the country's main business organizations to discuss the problem of unpaid suppliers. Industrial confederation Concamin said the measures should give respite to many small and medium businesses whose financial situation is delicate as a result of the payment delays. Mr. González Anaya was appointed chief executive of Pemex last month with the task of shoring up its finances as it struggles with low oil prices and record after-tax losses. In his first major decision, Mr. González Anaya outlined 100 billion pesos in budget cuts for this year , based on the expectations that crude oil will average $25 a barrel instead of the $50 that Pemex budgeted for. The spending cuts and deferred investments are expected to lower Pemex's crude oil production this year by 100,000 barrels a day to around 2.13 million barrels a day as the company focuses on profitable output, although a rise in prices or success in forming partnerships with private companies could limit the lost output, Mr. González Anaya said last week. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 8, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771301586
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771301586?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Rare Glimpse Into Norwegian Fund Shows Shift From Large Stakes; Disclosures by Norway's $877 billion oil fund offer an unusually detailed view of its workings
Author: Hovland, Kjetil Malkenes; Clark, Simon
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Mar 2016: n/a.
Abstract:
Norway's government in January tapped into the fund for the first time since it was set up in 1996, as oil-production revenues dropped to a level insufficient to cover its expenses. Since inception, the government has pumped on average 187 billion kroner ($21.83 billion) a year of surplus oil revenues into the fund.
Full text: OSLO--Norway's $877 billion sovereign-wealth fund, the world's largest, said on Wednesday that it held fewer large equity stakes at the end of 2015 than a year earlier, due to a gradual shift away from Europe and a transfer of equity assets into its real-estate portfolio. Norges Bank Investment Management, or NBIM, which manages the fund, said it held stakes exceeding 5% in 29 companies at the end of 2015, down from 57 companies a year earlier. It held stakes exceeding 2% in 1,074 companies, down from 1,205 companies a year earlier. The annual disclosure of the Norwegian fund's investments gives the public an unusually detailed view into how a sovereign-wealth fund manages money. Similar government-owned funds that manage billions of dollars on behalf of nations from Qatar to Kuwait and China provide very little information about their activities. "The large ownership stakes we've had in some real-estate companies have been transferred to the real-estate portfolio," said NBIM chief executive Yngve Slyngstad. "Some of our big investments in Europe have also been reduced somewhat, so they've fallen from slightly above 5% to slightly below 5%." The fund, one of the largest investors in the world, held 1.3% of all global listed equities at the end of 2015, unchanged on the year, and held 2.3% of all listed European equities, down from 2.4%. The fund's European exposure dropped to 38.1% of its value at the end of 2015, from 39.3% a year earlier. Its exposure to North America increased to 40% from 38.9%. Its emerging markets holdings dropped to 9.8% of its value, from 10.6%, largely due to weaker markets and currency fluctuations. Norway's government in January tapped into the fund for the first time since it was set up in 1996, as oil-production revenues dropped to a level insufficient to cover its expenses. Since inception, the government has pumped on average 187 billion kroner ($21.83 billion) a year of surplus oil revenues into the fund. "We may soon be in a situation where the fund is flattening, and maybe there will even be withdrawals, so we may separate a little less from other sovereign-wealth funds than we've done historically," said Norway's central bank governor Oystein Olsen. However, Norway's fund is still in a more comfortable situation than some other wealth funds , which may have to sell off assets to fund government spending. Mr. Slyngstad expected to transfer about 80 billion kroner to government coffers this year, but would still have cash left to keep investing. "Our cash flow is significantly higher than the withdrawals, so we're net buyers of assets, not net sellers," Mr. Slyngstad said. The fund also revealed the 9,050 companies it owned shares in at the end of 2015, registering declines in its percentage stakes in Credit Suisse Group AG and BlackRock Inc. and increases in UBS AG and HSBC Holdings PLC. Financial companies accounted for the biggest share of equity investments, at 23.4%, and returned 2.3% for the fund last year. The fund's stake in BlackRock, the world's biggest money manager, declined from 7% at the end of 2014 to 5.66% a year later. Its stake in HSBC was 1.98% at the end of the year, compared with 1.81% at the start. The $3.07-billion holding in the London-based lender is the fund's second-biggest investment in a financial company, after the BlackRock stake. The fund's stake in Zurich-based lender Credit Suisse declined from 5.69% to 4.98% in the same period. Declines were also recorded in its stakes in France's BNP Paribas SA and Italian lenders UniCredit SpA and Intesa Sanpaolo SpA. Meanwhile it increased its stake in Swiss lender UBS from 2.94% to 3.08% during 2015. Percentage-increases were also recorded in the fund's stakes in Barclays PLC, Lloyds Banking Group PLC, Deutsche Bank AG, Nordea Bank AB, Standard Chartered PLC as well as U.S. lenders Citigroup Inc., J.P. Morgan Chase & Co, Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley and Wells Fargo & Co. The fund's stake in China Construction Bank Corp. also increased. The fund declined to comment on its stakes in financial companies, saying that it doesn't discuss single investments. In a bid to diversify its holdings, NBIM last year expanded its investment universe to 67 equity markets from 61 a year earlier, adding Bangladesh, Botswana, Estonia, Latvia, Lithuania and Sri Lanka. The fund returned 334 billion kroner or 2.7% in 2015, down from 7.6% in the year-earlier period and the weakest performance since 2011, when full-year returns were negative. The fund blamed last year's weaker returns partly on slowing growth in emerging markets. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com and Simon Clark at simon.clark@wsj.com Corrections & Amplifications Norway's sovereign-wealth fund increased its stake in Swiss lender UBS from 2.94% to 3.08% during 2015. An earlier version of this article incorrectly stated the size of the increase. Credit: By Kjetil Malkenes Hovland and Simon Clark
Subject: Investment bankers; Banking industry; International finance; Equity
Location: Norway Europe
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771548642
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771548642?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Energy Sector Pushes Up Stocks --- The commodities-price rebound that stoked recent rally continues, with oil jumping 5.5%
Author: Kuriloff, Aaron; Gold, Riva
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Mar 2016: C.4.
Abstract:
[...]Monday, U.S. oil-field-services company Baker Hughes said the number of rigs drilling for oil and natural gas globally fell in February to the lowest level since 2002, while the U.S. Energy Information Administration said it expects April production declines in key shale-drilling regions.
Full text: U.S. stocks tiptoed to their longest rally since October as a rise in oil prices lifted energy shares. Investors said Monday's small moves marked a pause after major indexes bounced back from February lows to near their highest levels this year on signs of strength in the U.S. economy. After a three-week rebound that propelled the Dow industrials above 17000 for the first time since early January, some investors and traders said they were taking a wait-and-see approach ahead of Thursday's European Central Bank meeting, which many expect will produce additional stimulus efforts. "People are definitely watching and being somewhat circumspect in their investing," said Tom Carter, managing director at JonesTrading. The Dow Jones Industrial Average rose 67.18 points, or 0.4%, to 17073.95, and the S&P 500 climbed 1.77 points, or 0.1%, to 2001.76. Both indexes rose for a fifth session in a row, their longest winning streaks since October. The Nasdaq Composite declined 8.77 points, or 0.2%, to 4708.25. Chevron and Exxon Mobil were among the biggest gainers in the Dow. The energy sector led gains in the S&P 500, with Murphy Oil rising $2.99, or 13%, to $26.69 and Southwestern Energy gaining 76 cents, or 9.7%, to 8.59. A rebound in commodities prices that helped stoke the recent rally extended into Monday, as U.S. crude oil rose 5.5% to $37.90 a barrel. Oil prices are up 45% from a 13-year low in February. Oil prices have risen steadily since Russia, Saudi Arabia, Venezuela and Qatar tentatively agreed last month to freeze their output at January levels. The United Arab Emirates' energy minister said Monday that current prices were forcing all suppliers to freeze production. Also Monday, U.S. oil-field-services company Baker Hughes said the number of rigs drilling for oil and natural gas globally fell in February to the lowest level since 2002, while the U.S. Energy Information Administration said it expects April production declines in key shale-drilling regions. Some analysts warned, however, that the oil rally could be stopped by still-ample inventories of crude and refined products, with U.S. crude-oil stockpiles at their highest level in more than 80 years. With U.S. economic data easing fears of recession, investors have bought back into some of the assets they sold off earlier this year, while junk-bond yield spreads have narrowed and volatility has receded. Friday's strong U.S. jobs report further calmed concerns, helping to push up the yield on the 10-year Treasury note to 1.902%, its highest yield since Feb. 1, from 1.883% Friday. Gold prices fell 0.5% to $1,263.20 an ounce. "There's been a collective sigh of relief after starting the year in such a sloppy manner," said Gordon Charlop, managing director at Rosenblatt Securities. Investors also were turning their attention to efforts in Europe and China to prop up slowing economies. European Central Bank officials are widely expected to cut a key interest rate further into negative territory Thursday and expand the bank's stimulus measures to combat persistent weakness in the region's growth and inflation. "There are many different combinations of additional easing that [ECB President Mario] Draghi can put out," said Nandini Ramakrishnan, global market strategist at J.P. Morgan Asset Management. The Stoxx Europe 600 declined 0.3% as shares in banking companies fell. China shares dropped sharply early Tuesday, dragging most of the region into the red, as investors sold off the country's smaller technology names. The Shanghai Composite Index was off 2.7%. The index had risen five days in a row, its first day down after five sessions of gains. The ChiNext, a benchmark of Chinese startup stocks, was down 4%, while the smaller Shenzhen Composite Index fell 3.6%. Stocks like Linewell Software and Lanpec Technologies Co Ltd. on the mainland were down about 5%. Energy, up 0.5%, was the only sector still in the green. Elsewhere, Japan's Nikkei stock average was down 1.6%, South Korea's Kospi was down 1.1% and Hong Kong's Hang Seng Index was down 1%. Australia's S&P/ASX 200 slipped by 0.5%. --- Nicole Friedman and Chao Deng contributed to this article. Credit: Aaron Kuriloff, Riva Gold
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 8, 2016
column: Monday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Fin ance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771712166
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771712166?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Sabine Oil & Gas May Reject Pipeline Contracts; Federal bankruptcy judge says Sabine ruling isn't binding, encourages settlement
Author: Sider, Alison; Corrigan, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
Oil and gas producers, which have been battered by persistently low oil and natural gas prices, have been hoping for a signal they might be able to escape pipeline transport fees and minimum shipping volumes they agreed to when times were good. Since output has fallen, some producers are stuck paying for space on pipelines that they aren't using.
Full text: A judge ruled that a bankrupt oil-and-gas producer could shed expensive contracts it made with pipeline companies when energy was booming, rejecting pipeline firms' claim that even bankruptcies couldn't break the lucrative agreements apart. Sabine Oil & Gas Corp., which filed for bankruptcy protection in July, had asked a New York bankruptcy court to let it out of pipeline agreements with Nordheim Eagle Ford Gathering LLC, an affiliate of Cheniere Energy Inc. Under such deals, oil-and-gas producers agree to ship certain volumes of oil or gas every year at set fees, and have to make deficiency payments if they miss their targets. Sabine argued it was no longer shipping enough fuel to meet its minimum commitments under the deals and would have to pay Nordheim $35 million over the life of the contract to make up the difference, making the pacts so expensive it would be better off striking a new agreement with another company. Sabine also asked to get out of similar agreements with a second pipeline operator--an affiliate of High Point Infrastructure Partners LLC--arguing that it would save as much as $80 million and avoid sinking money into unprofitable wells the company would be required to drill under the agreement. Judge Shelley Chapman of the U.S. Bankruptcy Court in Manhattan agreed to let Sabine out of the deals over the objections of the pipeline companies, but said that Texas law wasn't clear enough to allow her to make a binding decision, potentially setting the stage for another legal battle over the pipeline operators' argument that the agreements can't be broken because they are inextricably tied to the land on which Sabine operates. Sabine and Cheniere didn't respond to requests for comment. The ruling may be helpful to Delaware bankruptcy judges with similar disputes before them, but they aren't bound by it. Pipelines and producers will also likely resolve many disputes without going to court. Companies like Plains All American Pipeline LP have said producers are already asking for breaks on fees and volume commitments, and some experts said the ruling could set a new tone for those discussions. The closely watched case is likely to upend the once symbiotic relationship between companies that pump fuel and those that spent billions to lay thousands of miles of pipelines to move it. Oil and gas producers, which have been battered by persistently low oil and natural gas prices, have been hoping for a signal they might be able to escape pipeline transport fees and minimum shipping volumes they agreed to when times were good. Since output has fallen, some producers are stuck paying for space on pipelines that they aren't using. Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, said he expects more challenges to contracts between producers and pipeline companies. "One could see this ruling as something favorable for producers, but it's something that's going to play out further in the courts," he said. If more judges side with producers, it could pose a serious threat to dozens of pipeline companies that count on a steady stream of fees and pay out most of their cash flow to investors. The Alerian MLP index, which includes major pipeline companies, fell 6.1% Tuesday. "There is a concern in the community about whether this is going to shake up the reliable income everybody was kind of depending on," said Mary Lyman, president of the Master Limited Partnership Association, a trade group that represents many pipeline operators. Lawyers and analysts cautioned that Tuesday's decision won't necessarily affect companies with contracts structured differently, or in states with different laws. Alan Armstrong, the chief executive of pipeline company Williams Cos., sought to assure investors and analysts last month that contracts would survive customer bankruptcies. "We believe gathering contracts such as ours are not the type of contract that would be rejected," he said. Williams shares sold off sharply last month when rumors swirled that Chesapeake Energy Corp., a major shipper, might go bankrupt, potentially threatening its pipeline revenue and its credit rating. The panic spread to Energy Transfer Equity LP, which is buying Williams in a $33 billion deal. Williams has said Chesapeake is still paying its bills and that it remains open to renegotiating contract terms with its customer. Chesapeake issued a statement last month saying it had no plans to pursue a bankruptcy. Pipeline companies have argued that many of their agreements with producers are ironclad because many are set up more like real-estate interests in the oil and gas fields, not just a promise of payment, creating a link to the land that sticks even if the acreage is sold to a new owner. But as more struggling producers slide into bankruptcy, experts say contentious disputes will continue to emerge. After Quicksilver Resources filed for bankruptcy last year, its oil-and-gas fields were sold. The winner, BlueStone Natural Resources II LLC, agreed to pay $245 million in cash, with one condition: the rejection of contracts with pipeline company Crestwood Equity Partners LP. Crestwood Chief Executive Robert Phillips has said the company believes its agreements are bankruptcy-proof. Crestwood bought Quicksilver's north Texas natural-gas pipeline system in 2010. Last week, Crestwood's lawyers said the company wouldn't have paid more than $700 million in 2010 if it had not expected the contracts would stick with the land. But BlueStone said in a court filing that it didn't want to be saddled with obligations to Crestwood, arguing that the fees are "significantly above the market rate" in Texas' Barnett shale region. "BlueStone has other options instead of paying Crestwood an exorbitant gathering fee," the company wrote in a court filing. If a judge doesn't agree, BlueStone will walk away, and Quicksilver's creditors will have to turn to a significantly lower second-place offer: $93 million in cash from BSG LLC. Jacqueline Palank contributed to this article. Write to Alison Sider at alison.sider@wsj.com and Tom Corrigan at tom.corrigan@wsj.com Credit: By Alison Sider and Tom Corrigan
Subject: Pipelines; Bankruptcy; Petroleum industry; Fees & charges; Federal courts; Judges & magistrates; Natural gas prices
Location: Texas
Company / organization: Name: Sabine Oil & Gas Corp; NAICS: 211111, 211112; Name: Bankruptcy Court-US; NAICS: 922110; Name: Plains All American Pipeline LP; NAICS: 486110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771315127
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771315127?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canada's Oil-Dependent Alberta Province Sees Higher Deficits; 'Commodity price crash has proved to be deeper and longer than projected,' government says
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
CALGARY, Alberta--The Western Canadian province of Alberta said Tuesday that lower oil and gas prices will force it to increase deficit spending beyond earlier projections, a sign of its dependence on revenue from the energy industry.
Full text: CALGARY, Alberta--The Western Canadian province of Alberta said Tuesday that lower oil and gas prices will force it to increase deficit spending beyond earlier projections, a sign of its dependence on revenue from the energy industry. "The Government of Alberta cannot meet current deficit targets, because the commodity price crash has proved to be deeper and of longer duration than projected," Alberta Lieutenant Governor Lois Mitchell said in a speech on behalf of Premier Rachel Notely. The province's declining fortunes have weighed on the broader Canadian economy because fossil fuels are among the country's top export products. Alberta had been the fastest-growing province in Canada before a swoon in oil prices that began in mid-2014. The Conference Board of Canada said Tuesday that Alberta will be the only province to see its economy shrink this year, with GDP contracting 1.1% after a 2.9% drop in 2015. Last month, Alberta said the deficit could top 10.4 billion Canadian dollars ($7.75 billion) in the financial year that begins April 1 and that the province was on track for a C$6.3 billion deficit in the current fiscal year. Last year, Alberta posted a C$1.1 billion surplus. The government said in a key policy address called a throne speech that it would revise those budgetary assumptions. It promised to review its fiscal plan by taking a "prudent, balanced approach," but provided no further details. Ms. Notely's administration did, however, reiterate a pledge to spare education and health care from spending cuts. Her government also vowed to implement a controversial plan to combat climate change outlined last November. It will introduce a broad-based carbon tax, phase out coal-fired power generation and cap greenhouse gas emissions from oil sands production. Those initiatives follow legislation passed last summer to boost corporate taxes and increase an existing carbon tax on large-scale emitters. Some energy companies and conservative opposition parties have pushed back on those ambitious climate policies, which Ms. Notley's left-leaning ruling party pledged to pursue after taking power in provincial elections last May. As part of the throne speech, the government said it would set up an advisory committee of oil sands producers to "ensure measures are effective and widely supported." Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Environmental policy; Energy industry; Environmental tax; Petroleum industry; Emissions; Oil sands
Location: Canada
Company / organization: Name: Conference Board of Canada; NAICS: 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771315321
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771315321?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Crude-Oil Prices Pare Losses in Asia Trade; Traders anticipate U.S. data will show further declines in production
Author: Hsu, Jenny W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
"Higher growth in world oil inventories tends to delay the rebalancing of supply and demand in the global market, keeping prices low," he said in a statement.
Full text: Crude-oil prices reversed their downward trend in early afternoon Asia trading Wednesday, as investors hunt for bargains following the overnight decline. Prices in Asia opened lower but regained traction in the afternoon as traders anticipate U.S. production data will show further declines in the latest week, said Daniel Ang, a Phillip Futures energy analyst. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $36.69 a barrel at 0518 GMT, up 19 cents in the Globex electronic session. May Brent crude on London's ICE Futures exchange rose 15 cents to $39.80 a barrel. Analysts say that as the prolonged low prices have marginalized some high-cost U.S. shale producers, the downward trend in production is likely to persist because it is getting more unprofitable for these producers to keep pumping. Based on data from the Energy Information Administration on the week that ended Feb. 26, U.S. production has fall 2.6% from same period a year before. However, as U.S. crude inventories remain at a high unseen since 1930, the pace of production decline is still unable to really chip away the global glut. The industry group American Petroleum Institute said U.S. crude stocks grew by 4.4 million barrels last week while gasoline stocks decreased by 2.1 million barrels. A Wall Street Journal survey forecasts crude supplies to have risen by 3.1 million barrels and gasoline supplies to have decreased by 1.5 million barrels. The official data will be released later on Wednesday. On Tuesday, EIA Administrator Adam Sieminski painted a grim picture of crude prices over the next two years as the global economy weakens. "Higher growth in world oil inventories tends to delay the rebalancing of supply and demand in the global market, keeping prices low," he said in a statement. Prices are also facing pressure from softer Chinese economic growth after government data Tuesday showed that the country's exports in February fell 25.4% from a year earlier. That was much worse than the 15% decline expected by analysts, and was the largest monthly drop since the financial crisis. Imports also fell by 13.8% in the same month, signaling cooling demand. The country's crude imports, however, bucked the overall trend by rising 24.5% from a year earlier in February to 31.8 million metric tons, or eight million barrels a day, despite the weeklong Lunar New Year holiday during which many factories were closed. "Strong demand for the local refineries is supporting China's crude imports. With prices this low, we expect the refineries to keep importing more," said Li Li, a research and strategy director at ICIS China, estimating that China's crude imports will grow at roughly the same level as last year's 8.8%. Still, the robust crude imports weren't able to offset the sharp decline in overall imports, knocking global investors' confidence in China's economic prowess going forward, Ms. Li said. "We never read too much into month-to-month crude-import data because volumes tend to be volatile," said Laban Yu, a Jefferies analyst, adding that "the trend does suggest continued strength." Meanwhile, Kuwait's energy minister said the country wouldn't adhere to a pact to freeze production unless all oil producers, including Iran, are on board. The move could scuttle the agreement as Iran has repeatedly said it would keep pumping until production is back to the pre-sanction levels of around 4 million barrels a day. A broader meeting among the producers is expected to take place this month or next to discuss the agreement. Christian Berthelsen contributed to this article. Write to Jenny W. Hsu at jenny.hsu@wsj.com Credit: By Jenny W. Hsu
Subject: Petroleum refineries; Petroleum industry; Supply & demand; Inventory; Futures; Crude oil prices
Location: Asia United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771378353
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771378353?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Property Report: New Risk in Office Space: Defaults --- Commercial-property market shows rising signs of weakness; pain in oil boomtowns
Author: Brown, Eliot
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Mar 2016: C.1.
Abstract:
"The for-sale condo business has dramatically slowed at all price points and in all neighborhoods," said Steven Roth, chief executive of Vornado Realty Trust, during an earnings call last month.
Full text: For nearly a decade, the 14-story Houston office building called Northborough Tower proved a reliable investment for fund manager Behringer Harvard, staying fully leased and generating millions in profit. But now the gleaming building is being surrendered to creditors. Its $21 million mortgage came due in January, and Behringer Harvard wasn't able to find buyers willing to pay more than that. At the same time, its only tenant is leaving and the Houston office market is reeling from low oil prices. "We received no offers above the debt balance," said Thomas Kennedy, president of the Behringer Harvard fund that bought the building for $33 million in 2007. New signs of weakness are surfacing in the commercial-property market, ending a half-decade run of improvement with steadily climbing values. Amid global shifts like the sluggish Chinese economy and a new era of low oil prices, defaults on loans are popping up in areas that were considered overheated, occurring in small numbers for now, but stoking fears that more could be on the way. This comes as there is a growing view that the best days are in the past for this property cycle, which benefited strongly from low interest rates and demand by global investors from regions like China and oil-dependent economies in the Middle East. "We're at the top of the market," said Kenneth Riggs, president of Situs RERC, a real-estate-research firm that advises investors on property values and market direction. "There's going to be a market correction." If there is a downturn, few expect it to be severe because the economy still is creating a healthy level of jobs and lending has been far less aggressive than in past booms like 2007, when highly leveraged developers defaulted as the market slowed. Developers back then were routinely able to secure debt for more than 90% of the value of a building, compared with less than 80% today. Any correction now, Mr. Riggs said, will be "let's call it, manageable." Still, there are several pockets of concern. The Northborough Tower is one of numerous office buildings in which debt is coming due in the Houston area, where the amount of office space vacant or soon to be available for lease was 23% at the end of 2015, up from 17.8% a year earlier, according to real-estate-services firm Savills Studley. With vacancy expected to rise further still, investors are staying away from the area and lenders have grown particularly wary. Worse yet are the oil-drilling boomtowns in West Texas and North Dakota, where apartment rents have plunged thanks to a growing level of new supply hitting the market at the same time that low oil prices have sapped demand. A similar effect can be seen in New York, where the condominium market aimed at the superrich has slowed just as a wave of towers are hitting the market. "The for-sale condo business has dramatically slowed at all price points and in all neighborhoods," said Steven Roth, chief executive of Vornado Realty Trust, during an earnings call last month. The company is building a 950-foot condo tower on Central Park South. In turn, lenders have eschewed the sector, leaving developers who paid high prices for land unable to pay off their debts. Such is the case for the Bauhaus Group, a developer that had planned a condo tower on Manhattan's East Side but is now fighting in court with lenders seeking to foreclose after the owner didn't repay $147 million in debt. Another developer, Ian Bruce Eichner, is facing a similar attempt to seize his site in the Harlem neighborhood, where he had planned a 680-apartment rental project. A spokesman for Mr. Eichner has previously said the capital markets have retrenched and the timing is unfortunate. The developer has been seen as something of a canary in the coal mine. He was among the early, high-profile defaults in 2008, when he lost control of a $4 billion Las Vegas casino project. Meanwhile, loans are becoming harder to secure even for safe investments such as well-leased buildings. That is because broader market volatility has caused lenders who sell off their loans via bonds known as commercial-mortgage-backed securities to grow wary. While the segment made about $100 billion in loans last year, it has come to a virtual halt today, lending executives said. If that continues, it will become more difficult for landlords who took out 10-year loans in 2006 to refinance today. With more debt coming due and other conditions, defaults are bound to rise, said Robert Verrone, a veteran lender whose Iron Hound Management Co. also helps borrowers modify troubled mortgages. Credit: By Eliot Brown
Subject: Condominiums; Real estate sales; Commercial real estate; Office space
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Mar 9, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771387542
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771387542?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Rare Glimpse Into Norwegian Fund Shows Shift From Large Stakes; Disclosures by Norway's $877 billion oil fund offer an unusually detailed view of its workings
Author: Hovland, Kjetil Malkenes; Clark, Simon
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
Norway's government in January tapped into the fund for the first time since it was set up in 1996, as oil-production revenues dropped to a level insufficient to cover its expenses. Since inception, the government has pumped on average 187 billion kroner ($21.83 billion) a year of surplus oil revenues into the fund.
Full text: OSLO--Norway's $877 billion sovereign-wealth fund, the world's largest, said on Wednesday that it held fewer large equity stakes at the end of 2015 than a year earlier, due to a gradual shift away from Europe and a transfer of equity assets into its real-estate portfolio. Norges Bank Investment Management, or NBIM, which manages the fund, said it held stakes exceeding 5% in 29 companies at the end of 2015, down from 57 companies a year earlier. It held stakes exceeding 2% in 1,074 companies, down from 1,205 companies a year earlier. The annual disclosure of the Norwegian fund's investments gives the public an unusually detailed view into how a sovereign-wealth fund manages money. Similar government-owned funds that manage billions of dollars on behalf of nations from Qatar to Kuwait and China provide very little information about their activities. "The large ownership stakes we've had in some real-estate companies have been transferred to the real-estate portfolio," said NBIM chief executive Yngve Slyngstad. "Some of our big investments in Europe have also been reduced somewhat, so they've fallen from slightly above 5% to slightly below 5%." The fund, one of the largest investors in the world, held 1.3% of all global listed equities at the end of 2015, unchanged on the year, and held 2.3% of all listed European equities, down from 2.4%. The fund's European exposure dropped to 38.1% of its value at the end of 2015, from 39.3% a year earlier. Its exposure to North America increased to 40% from 38.9%. Its emerging markets holdings dropped to 9.8% of its value, from 10.6%, largely due to weaker markets and currency fluctuations. Norway's government in January tapped into the fund for the first time since it was set up in 1996, as oil-production revenues dropped to a level insufficient to cover its expenses. Since inception, the government has pumped on average 187 billion kroner ($21.83 billion) a year of surplus oil revenues into the fund. "We may soon be in a situation where the fund is flattening, and maybe there will even be withdrawals, so we may separate a little less from other sovereign-wealth funds than we've done historically," said Norway's central bank governor Oystein Olsen. However, Norway's fund is still in a more comfortable situation than some other wealth funds , which may have to sell off assets to fund government spending. Mr. Slyngstad expected to transfer about 80 billion kroner to government coffers this year, but would still have cash left to keep investing. "Our cash flow is significantly higher than the withdrawals, so we're net buyers of assets, not net sellers," Mr. Slyngstad said. The fund also revealed the 9,050 companies it owned shares in at the end of 2015, registering declines in its percentage stakes in Credit Suisse Group AG and BlackRock Inc. and increases in UBS AG and HSBC Holdings PLC. Financial companies accounted for the biggest share of equity investments, at 23.4%, and returned 2.3% for the fund last year. The fund's stake in BlackRock, the world's biggest money manager, declined from 7% at the end of 2014 to 5.66% a year later. Its stake in HSBC was 1.98% at the end of the year, compared with 1.81% at the start. The $3.07-billion holding in the London-based lender is the fund's second-biggest investment in a financial company, after the BlackRock stake. The fund's stake in Zurich-based lender Credit Suisse declined from 5.69% to 4.98% in the same period. Declines were also recorded in its stakes in France's BNP Paribas SA and Italian lenders UniCredit SpA and Intesa Sanpaolo SpA. Meanwhile it increased its stake in Swiss lender UBS from 0.08% to 3.08% during 2015. Percentage-increases were also recorded in the fund's stakes in Barclays PLC, Lloyds Banking Group PLC, Deutsche Bank AG, Nordea Bank AB, Standard Chartered PLC as well as U.S. lenders Citigroup Inc., J.P. Morgan Chase & Co, Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley and Wells Fargo & Co. The fund's stake in China Construction Bank Corp. also increased. The fund declined to comment on its stakes in financial companies, saying that it doesn't discuss single investments. In a bid to diversify its holdings, NBIM last year expanded its investment universe to 67 equity markets from 61 a year earlier, adding Bangladesh, Botswana, Estonia, Latvia, Lithuania and Sri Lanka. The fund returned 334 billion kroner or 2.7% in 2015, down from 7.6% in the year-earlier period and the weakest performance since 2011, when full-year returns were negative. The fund blamed last year's weaker returns partly on slowing growth in emerging markets. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com and Simon Clark at simon.clark@wsj.com Credit: By Kjetil Malkenes Hovland and Simon Clark
Subject: Equity; International finance
Location: Norway Europe
Company / organization: Name: Credit Suisse Group; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771403454
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771403454?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Hits Three-Month High on Gasoline Demand; EIA data show big drop in gasoline, diesel stockpiles
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
The EIA's report also gives some hope that demand is rising even before the start of the high-demand summer driving season, helping balance a market that has been oversupplied and crashing for nearly two years.
Full text: Oil prices surged to a three-month high Wednesday after government data showed demand for gasoline and diesel fuel was far higher than even bullish expectations. The U.S. Energy Information Administration said gasoline stockpiles fell last week three times as much as expected and diesel stockpiles fell double what was expected. Those are positive signs for demand and have surprised traders, sparking a slate of buying despite crude stockpiles that added another 3.9 million barrels, brokers said. "It looks like we had a pickup in demand, up to about 20 million barrels a day," said Bart Melek, head of commodity strategy at TD Securities in Toronto, "All in all, I think this is a positive for oil." Light, sweet crude settled up $1.79, or 4.9%, at $38.29 a barrel on the New York Mercantile Exchange, the highest settlement since Dec. 4. Brent, the global benchmark, rose $1.42, or 3.6%, to $41.07 a barrel on ICE Futures Europe, also the highest level since Dec. 4. The gains are the latest in a rally that's been strong for nearly a month. There are signs that rampant drilling is slowing around the world, and hope for a deal to freeze or cut output among the world's biggest producers. The EIA's report also gives some hope that demand is rising even before the start of the high-demand summer driving season, helping balance a market that has been oversupplied and crashing for nearly two years. Crude-oil inventories grew nearly 900,000 barrels more than expected. But sharp declines for gasoline and diesel exceeded expectations by even more. Gasoline stockpiles fell by 4.5 million barrels and distillates by 1.1 million. Analysts surveyed by The Wall Street Journal expected gasoline to fall just 1.5 million barrels and distillates by 500,000. The American Petroleum Institute had reported only a decrease of 2.1 million barrels in gasoline stocks and a drop of 128,000 barrels in distillate inventories. Gasoline futures settled up 8.27 cents, or 6%, to $1.4705 a gallon, the highest settlement since Aug. 31. It has gained 64% in a month. Diesel futures rose 3.27 cents, or 2.7%, to $1.2327 a gallon, the highest level since Dec. 9. It is up 42% in a little more than a month. "There's reason to be optimistic, albeit there's a lot of crude still in storage," said Tim Pickering, president of Auspice Capital Advisors Ltd., which manages $300 million and is holding a neutral position on oil. "You can see the right factors that can bring the supply-and-demand equation back into line." Those falling product stockpiles come at a time when crude output is declining from key producers Nigeria and Iraq because of pipeline attacks, analysts said. Iran is also falling short of putting as much new oil onto the market as some expected, and all of that emboldens bullish traders, said John Saucer, vice president of research and analysis at Mobius Risk Group in Houston. "The narrative has shifted," he added. "People are starting to be a little more receptive to the idea that things aren't quite as dismal as everyone felt in January." Analysts say that as the prolonged low prices have hit high-cost U.S. shale producers, the downward trend in production is likely to persist because it is getting more unprofitable for these producers to keep pumping. However, with U.S. crude inventories remaining near levels not seen since 1930, the slowing production is still unable to really chip away at the global glut, analysts say. The rally has also been bolstered by hopes for an agreement between major international producers to curtail their output. Some heavyweight suppliers, including Russia and Saudi Arabia, announced last month that they would freeze their output at January levels if other producers join. On Tuesday, Kuwait's energy minister said the country wouldn't adhere to a pact to freeze production unless all oil producers, including Iran, are on board. The move could scuttle the agreement as Iran has repeatedly said it would keep pumping until production is back to around 4 million barrels a day, its level before international trade sanctions were placed on it. A meeting of the producers is expected to take place this month or next to discuss the agreement. "The outcome of that meeting will be important for the reading of the global balances for the second half and we think that it will be difficult for prices to [fall to] recent lows before that gathering," said Olivier Jakob of oil consultancy Petromatrix. Georgi Kantchev and Jenny W. Hsu contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Petroleum industry; Supply & demand; Diesel fuels; Inventory; Futures
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771408638
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771408638?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
CEO of Argentina Oil Company YPF to Depart; Miguel Galuccio to step down following President Mauricio Macri's decision to pursue new management at the government-controlled company
Author: Turner, Taos
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract: None available.
Full text: BUENOS AIRES--Miguel Galuccio, the chief executive of YPF, Argentina's state-run oil company, will leave the company soon, YPF and government officials said on Wednesday. Mr. Galuccio's plans to step down come after President Mauricio Macri decided to pursue new management at the company, which is 51% government-owned. Mr. Galuccio was appointed to head YPF in 2012 by then President Cristina Kirchner after her government expropriated the company from Spain's Repsol. A YPF official said Mr. Galuccio has already begun working on a transition to help the company and the government adjust to having a new chief executive, possibly next month. Juan José Aranguren, Argentina's energy minister, didn't respond to requests for comment. Macri administration officials say the government has been considering at least two people to replace Mr. Galuccio: Javier Rielo, a former oil executive at Total Argentina; and Miguel Gutiérrez, who once ran Telefónica Group in Argentina. Write to Taos Turner at taos.turner@wsj.com Credit: By Taos Turner
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771422032
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771422032?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Russian Maker of Steel Pipes in Talks to Supply Iran's Oil Industry; TMK has already sold pipes to Iran after lifting of sanctions and hopes for more and bigger tenders
Author: Williams, Selina; Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
LONDON--Russia's largest manufacturer of steel pipes for the energy industry is in talks to supply Iran as the country throttles up its oil production following the lifting of international sanctions , the company's senior vice president said Wednesday.
Full text: LONDON--Russia's largest manufacturer of steel pipes for the energy industry is in talks to supply Iran as the country throttles up its oil production following the lifting of international sanctions , the company's senior vice president said Wednesday. TMK has already sold some pipes to Iran's energy sector after sanctions were lifted in January and hopes to conclude a longer-term contract this year with bigger tenders coming later. "Iran is a very important market for us," Vladimir Shmatovich, TMK's senior vice president for strategy and business development, said in an interview. "Now that sanctions are lifted we definitely want to restart our presence there," he said. The move shows the potential for Iran to have better access to more modern equipment to refurbish its aging oil industry now that Western sanctions over its nuclear program have ended. The country produces about 3 million barrels of a crude a day and seeks to increase its production by 1 million barrels a day now that European markets are reopened to its oil. The talks with TMK also highlight how Russian companies retain a competitive advantage there despite the opening of the country to Western suppliers. Iran has said about $200 billion is needed to restore and develop its oil sector. Iran has some of the world's largest oil and gas reserves, but the infrastructure to produce and transport the oil and gas is creaking after years of underinvestment. "If the infrastructure was old before sanctions, now it's even older," said Mr. Shmatovich, adding: "They need everything--storage, tankers, refineries." While sanctions were still in place, Russia had to follow United Nations restrictions on dealing with some Tehran's banks and companies. Russian companies in Iran were limited by the country's isolation from the international financial system Before sanctions TMK was a major supplier of pipes to Iran's oil industry. The company had even built a plant in Volgograd in southern Russia, where it loaded pipes onto barges and shipped them down the Volga River into the Caspian Sea and over into Iran. "Our pipe is already very well known in Iran," said Mr. Shmatovich, whose company is also a major supplier of pipes to the U.S. oil industry and to energy companies world-wide. TMK isn't the only major company from Russia's oil sector ramping up its efforts to return to Iran. Russia's second-largest oil company Lukoil and Russian state-controlled gas giant Gazprom have been in talks with Iranian oil officials to re-enter the country and expand their presence there. Earlier this year, Lukoil signed a deal with Iran on two exploration projects in the southwest of the country. Russia and Iran already had long-standing diplomatic and military ties. But economic links between the two countries deepened after restrictions on Tehran tightened during the presidency of hard-line Mahmoud Ahmadinejad. Write to Selina Williams at selina.williams@wsj.com and Benoit Faucon at benoit.faucon@wsj.com Credit: By Selina Williams and Benoit Faucon
Subject: Petroleum industry; Sanctions; Petroleum production; Energy industry; Natural gas reserves; Steel pipes
Location: Russia Iran
Company / organization: Name: OAO Gazprom; NAICS: 211111, 221210; Name: United Nations--UN; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771422300
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771422300?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Copper Prices Lifted by Oil Rally; Prices are up nearly 5% this year
Author: Iosebashvili, Ira; Erheriene, Ese
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
Copper prices are up nearly 5% this year, part of a commodities rebound that has stemmed in part from investors rushing to cover bets against a wide swath of raw materials, from industrial metals to oil.
Full text: Copper prices rose on Wednesday, boosted by a rally in oil. Copper for May delivery was recently up 1.3% at $2.2575 a pound on the Comex division of the New York Mercantile Exchange. The move higher comes alongside a sharp rise in prices for oil , which climbed with help from declining product stockpiles and signs rampant supply around the world could be slowing down. Light, sweet crude for April delivery recently rose $1.05, or 3.8%, to $37.92 a barrel on the New York Mercantile Exchange. Big moves in the oil price tend to weigh on copper, as many funds trade the two commodities in a single basket, with a heavier share devoted to oil. Copper prices are up nearly 5% this year, part of a commodities rebound that has stemmed in part from investors rushing to cover bets against a wide swath of raw materials, from industrial metals to oil. But while a big part of the rally has been based on hopes for stimulus from China, the world's largest commodity consumer, "the indicators for the supply-demand are not particularly constructive," analysts at BMO Capital Markets wrote in a note to clients. The firm expects copper prices to decline in 2016, ending the year at around $2.05 a pound. Among the other base metals, aluminum for delivery in three months was up 0.5% at $1,576 a metric ton on the London Metal Exchange. Zinc was up 2.5% at $1,804 a metric ton, nickel was up 3% at $8,850 a metric ton, lead was up 2.1% at $1,857 a metric ton and tin was up 0.5% at $16,650 a metric ton. Write to Ira Iosebashvili at ira.iosebashvili@wsj.com and Ese Erheriene at ese.erheriene@wsj.com Credit: By Ira Iosebashvili and Ese Erheriene
Subject: Copper industry; Supply & demand; Price increases; Copper
Location: China
Company / organization: Name: London Metal Exchange; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771422309
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771422309?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crescent Point Energy Posts Loss, Cuts Dividend Again; Canadian oil producer pares spending plans for 2016
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
According to RBC, the company had been expected to cut its dividend again.
Full text: Canadian oil producer Crescent Point Energy Corp. on Wednesday posted another hefty quarterly loss and slashed its dividend further as it contends with continued weak commodity prices. The Calgary, Alberta-based company also pared spending plans for 2016, guiding for an annual capital budget of 950 million Canadian dollars ($708 million). That is at the low end of previous guidance for up to $1.3 billion and nearly 40% below its 2015 budget. Under its budget plan, Crescent Point said it would shift about C$100 million of spending to the second half of the year from the first half and has earmarked about 85% of the overall budget to drilling and development. Production for the year is estimated at 165,000 barrels of oil equivalent a day, which is the low end of guidance offered in January. "In 2016, our priority is to protect our balance sheet and our production levels while continuing to advance our plays and new technology," Chief Executive Scott Saxberg said in a release. Crescent Point closed out its final quarter of 2015 with an overall loss of C$382 million, or 76 Canadian cents a share. That is down from a profit of C$121 million a year earlier, and larger than its third-quarter loss of C$201 million. Results in the latest quarter included a C$589 million impairment charge related to lower-than-expected commodity prices. Excluding items, the company said adjusted earnings totaled C$258 million, or 51 Canadian cents a share. Cash flow fell 13% from a year earlier, but was in line with analyst expectations, according to RBC Capital Markets. Compared with the third quarter, cash flow rose 3% on higher production and lower operating costs, the company said. Average quarterly production totaled 176,108 barrels of oil equivalent a day, up 14% from a year earlier. Average selling prices fell 36%. Crescent Point cut its monthly dividend 70% to 3 Canadian cents, effective with its March payout. The move, which it said will save about C$430 million annually, comes after slashing its payout by 57% in August. According to RBC, the company had been expected to cut its dividend again. Write to Judy McKinnon at judy.mckinnon@wsj.com Credit: By Judy McKinnon
Subject: Budgets; Petroleum industry; Oil reserves; Financial performance; Cash flow; Losses
Location: Calgary Alberta Canada
Company / organization: Name: RBC Capital Markets; NAICS: 523110; Name: Crescent Point Energy Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771451072
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771451072?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Bank of Canada Holds Policy Rate at 0.5%; BOC says low oil prices will continue to curb Canada's economic growth
Author: Kim Mackrael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
A commodity-price rebound in recent weeks, along with shifting expectations for Canadian and U.S. monetary policy, have caused Canada's currency to gain value against the U.S. dollar, the central bank said.
Full text: OTTAWA--The Bank of Canada kept its main interest rate unchanged Wednesday, fulfilling expectations it would remain on the sidelines until the government unveils a much-anticipated fiscal stimulus plan this month to boost Canada's sputtering economy. In keeping its benchmark rate at 0.50%, the central bank said the economy is broadly evolving as expected and said it would incorporate an assessment of Ottawa's planned spending measures into its next economic projection in April. Canada's Liberal government, which will announce its budget on March 22, pledged during an election campaign last year to spend as much as 10 billion Canadian dollars ($7.45 billion) during each of the next two fiscal years. "The Bank of Canada tried to say as little as possible today as it waits to see what stimulus the federal budget delivers," CIBC World Markets economist Avery Shenfeld said in a note. The central bank's statement appeared to play down both good and bad economic news that has unfolded in recent weeks, further confirming that policy makers remain in a "wait and see" mode, Mr. Shenfeld said. Canada's economy grew by just 1.2% in 2015 , as the sharp drop in oil prices led energy firms to cut jobs and curb their investment plans. While nonenergy exports are gaining momentum, the Bank of Canada said in its statement on Wednesday, the pullback in the energy sector means overall business investment is still "very weak" and low oil prices will continue to damp Canada's economic outlook. "Canada's GDP growth in the fourth quarter was not as weak as expected, but the near-term outlook for the economy remains broadly the same as in January," the central bank's statement said. Canada's economy expanded at a 0.8% annualized rate in the final quarter of 2015. The decision to hold the rate unchanged was widely expected. All 11 primary dealers of Canadian government securities surveyed by The Wall Street Journal predicted the rate would remain at 0.5% on Wednesday, with many citing the federal government's coming budget announcement as a key reason for the central bank to stay on hold. Canada's national employment has remained resilient despite job losses in energy-producing regions in the country's west, the Bank of Canada said. However, it added that household spending continues to underpin domestic demand and warned that Canadians' financial vulnerabilities, such as high debt levels, are edging higher. A commodity-price rebound in recent weeks, along with shifting expectations for Canadian and U.S. monetary policy, have caused Canada's currency to gain value against the U.S. dollar, the central bank said. Those changes have brought the Canadian dollar's average value closer to the 72 U.S. cents policy makers had assumed during the Bank of Canada's most recent statement in January. The Bank of Canada said inflation is evolving largely as expected, with some of the factors that have been pushing the consumer-price index higher unwinding in the coming months. Its statement was "the very definition of a placeholder," said TD Securities economist David Tulk. He said the central bank has given itself a low hurdle for growth in the first quarter of 2016 and will be waiting to see what fiscal stimulus the government has to offer. "Taken together, it seems the bank can comfortably remain on the sidelines, at least through to the second half of this year," Mr. Tulk said. Canadian Finance Minister Bill Morneau said last month that the federal deficit for the 2016-17 fiscal year could hit C$18.4 billion before any new spending measures are taken into account. The Bank of Canada's next interest rate announcement is due April 13. Write to Kim Mackrael at kim.mackrael@wsj.com Credit: By Kim Mackrael
Subject: Central banks; Canadian dollar; Budgets; Interest rates; Consumer Price Index; Energy industry
Location: Canada
People: Poloz, Stephen
Company / organization: Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771513940
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771513940?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Government Bonds Slip as Stocks, Oil Jump; Auction of $20 billion in new 10-year Treasury notes draws tepid interest
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
The Federal Reserve's board of governors is scheduled to meet next Tuesday and Wednesday, but few in the market believe the Fed is prepared to follow its December interest rate increase with another one this month amid an uncertain economic outlook.
Full text: U.S. government bond prices edged down and yields rose Wednesday as investors cooled on safe-haven assets amid gains in riskier assets including stocks and oil. The yield on the 10-year U.S. Treasury note rose to 1.892%, approaching a one-month high set Tuesday. Yields have fallen sharply since the start of the year as investors rushed to safety amid market volatility and weak global economic data, but they have begun to rise again in recent weeks as worries have faded. Bond yields fall when prices rise. Analysts said rising yields were set off by a jump in Japanese government bond yields in overnight trading. Yields continued to climb amid a dearth of other drivers in the market while investors looked ahead to Thursday's meeting of the European Central Bank and next week's meeting of the Federal Open Market Committee. "The negative tone in the Treasury market was set early," CRT Capital Group said in a note. There was little in the way of economic data or major events on the calendar for Wednesday that would serve as a driver for the market, so Treasurys were taking their cues from elsewhere. Wholesale inventory data were weaker than expected, but the market showed little reaction. The Dow Jones Industrial Average was up 0.1% in late afternoon trading and the benchmark U.S. oil price rose 4.9% to $38.29 a barrel. "We're really lacking impetus at the moment," said David Keeble, global head of interest-rates strategy at Crédit Agricole in New York. A Treasury Department auction of $20 billion in new 10-year notes drew tepid interest, with the bid-to-cover ratio, a measure of investor demand, at 2.49, below the average of 2.62 over the last eight auctions and the lowest level since August. Indirect buyers, usually comprised of foreign governments and investors, took 56.5% of the issue compared with the recent average of 61.7%. Federal Reserve policy makers are scheduled to meet next Tuesday and Wednesday, but few in the market believe the central bank is prepared to follow its December interest-rate increase with another one this month amid an uncertain economic outlook. The market is assigning a probability of just 3.9% to a rate increase this month, according to CMEGroup Inc.'s FedWatch. Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen
Subject: Treasury notes; Statistical data
Location: United States--US
Company / organization: Name: Fitzgerald & Co; NAICS: 541820; Name: European Central Bank; NAICS: 521110; Name: CRT Capital Group; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771513989
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771513989?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dollar Gives Up Gains Against Euro as Oil Surges; Focus is on European Central Bank policy meeting set for Thursday
Author: Cherney, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
The dollar lost ground against the euro on Wednesday, giving up earlier gains, as oil prices rallied after U.S. government data suggested demand for gasoline and diesel fuel was higher than expected.
Full text: The dollar lost ground against the euro on Wednesday, giving up earlier gains, as oil prices rallied after U.S. government data suggested demand for gasoline and diesel fuel was higher than expected. In recent trading, the euro was up nearly 0.1% against the dollar to $1.1006. More broadly, the dollar shed nearly 0.1% according to the WSJ Dollar Index, which gauges the buck against a basket of 16 currencies. Oil and the dollar typically move in opposite directions, because a stronger dollar makes it more expensive for holders of other currencies to buy oil. While a rising dollar often drives oil prices lower, bullish sentiment in the oil market can also push down the dollar, analysts said. "The two will often fight for leadership," said Ned Rumpeltin, European head of currency strategy at TD Securities. "In this particular case, the catalyst happened to come from the energy markets." The dollar was showing gains against the euro earlier on Wednesday, as investors looked to the European Central Bank's policy meeting on Thursday. Additional stimulus measures are expected, including a possible further interest rate cut into negative territory. Lower rates make a currency less attractive to yield-seeking investors. Despite broader weakness, the dollar was 0.7% higher against the yen, considered a safer asset. Investors were generally in a "risk-on" mode and favored more volatile assets like U.S. stocks on Wednesday, with the S&P 500 stock index notching a 0.5% gain. The dollar, however, was down against several commodity-dependent currencies. In recent trading, it was down 2.7% against the Russian ruble to 71.05 rubles and down 1% against the Mexican peso to 17.75 pesos. The Australian dollar gained 0.8% to $0.75. Meanwhile, the greenback shed 1.3% against the Canadian dollar to C$1.32 after the Bank of Canada kept its main interest rate unchanged at 0.5%. Write to Mike Cherney at mike.cherney@wsj.com Credit: By Mike Cherney
Subject: American dollar; Canadian dollar; Interest rates; Investments; Currency
Location: United States--US
Company / organization: Name: Bank of Canada; NAICS: 521110; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771526902
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771526902?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Why Ailing Oil Producers Should Love This Court Decision; A bankruptcy-court ruling may set a precedent that disadvantages pipeline operators and possibly helps companies such as Chesapeake Energy
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
An even greater number may do so in 2016 as prices remain low, hedging contracts that acted as a lifeline expire and banks tighten conditions on lending facilities. Since bankruptcy rarely means insolvency, the specter of chapter 11 filings spooked investors in companies--mostly master limited partnerships--that owned the assets, but barely dented their cash flows.
Full text: The U.S. oil-and-gas industry is bracing for a game of monkey in the middle. Even as prices have plunged over the past 20 months or so, the one part of the industry where profits have held up is for those companies playing a middleman role. Now, a Texas legal ruling threatens the safety of those companies' cash flows and may give a boost to some troubled producers. On Tuesday, a U.S. bankruptcy judge ruled that Sabine Oil & Gas could reject certain gathering and processing contracts with a unit of Cheniere Energy that were no longer favorable. Cheniere shares fell sharply on the news. But a company not involved in the suit, Williams Co., plunged even more, by 10%. That is telling for investors more broadly. At the heart of the legal argument is whether certain types of contracts run "with the land"--that is, if they apply to any owner of a lease. For companies that own pipelines and other infrastructure necessary to process and move oil and gas, the distinction matters. Dozens of producers already have filed for bankruptcy. An even greater number may do so in 2016 as prices remain low, hedging contracts that acted as a lifeline expire and banks tighten conditions on lending facilities. Since bankruptcy rarely means insolvency, the specter of chapter 11 filings spooked investors in companies--mostly master limited partnerships--that owned the assets, but barely dented their cash flows. Yields on a leading MLP index went from a little over 5% at their 2014 nadir to almost 10% last month. After all, someone still has to move and process the stuff . Now, though, bankruptcy could result in less-favorable terms with the legal successors of producers. That would occur on a case-by-case basis as newer contracts in busier basins reflect what might be negotiated today, while others don't. Perhaps more significantly, it puts producers looking to ease contract terms in a much stronger bargaining position. For example, from the time of Tuesday's ruling through midday Wednesday, shares of troubled Chesapeake Energy rose by over 4%, even as those of Williams fell nearly 6%. Desperate for cash and projecting falling output this year, Chesapeake is eager to tweak less economical contracts with the major pipeline operator. Chesapeake and its peers may now have more leeway to do so. Credit: By Spencer Jakab
Subject: Bankruptcy; Petroleum industry; Pipelines; Master limited partnerships
Location: Texas United States--US
Company / organization: Name: Sabine Oil & Gas Corp; NAICS: 211111, 211112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771588088
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771588088?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Argentina's 'Dead Cow' Provides Rare Bright Spot for Oil, Gas Drillers; As companies rein in drilling world-wide, government buoys firms developing 'Vaca Muerta' shale play
Author: Turner, Taos
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract: None available.
Full text: NEUQUÉN, Argentina--From North Dakota to Texas and beyond, oil and gas companies have sharply reined in drilling and thousands of workers are being laid off. But here, where the oil and gas industry operates inside a government-made, subsidized bubble, taxpayers and drivers spend billions of dollars to try to keep that from happening. A barrel of oil fetches more than twice what it does in the U.S., and prices for natural gas can be nearly four times higher. That is helping shield producers and their workers developing the vast shale oil-and-gas deposits buried under a desolate swath of western Patagonia called Vaca Muerta, or Dead Cow, from the vagaries of world markets. Since taking office in December , Argentina's president, Mauricio Macri, has been reversing the populist policies of his predecessor, Cristina Kirchner, undoing everything from currency controls to export taxes. But he is expanding the expensive programs she used to decouple energy prices from global markets. "This is so important, strategically," said Miguel Galuccio, chief executive of Argentina's state-run oil company, YPF SA. With the price of light crude set at $67 a barrel and natural gas at $7.50 per million British Thermal Units--compared with less than $2 in the U.S.--the policy has made Argentina one of the few places on Earth where energy companies are looking to expand their operations. Some energy analysts say the country's high production costs make the system sustainable. But proponents here note that since December, Dow Chemical Co. and American Energy Partners LP--which had been run by Aubrey McClendon, the shale-drilling pioneer who died earlier this month--have said they plan to invest in a partnership with YPF to develop shale oil and gas. YPF also has said it plans soon to form a joint venture with Russia's PAO Gazprom. "You've got to incentivize people to do exploration and development, especially when prices are low," said Ali Moshiri, president of Latin America and Africa for Chevron Corp., which has an exploration-and-production joint venture with YPF. "If Argentina carries on with these incentives, it will encourage others to come to the country." In this arid patch of Patagonia, YPF is running 350-ton drilling rigs that dig 9,000 feet deep in search of gas. Far below red rocks and desert scrub lie 27 billion barrels of technically recoverable oil and 802 trillion cubic feet of gas trapped in a layer of shale up to 1,200 feet thick, according to the U.S. Energy Information Administration. In one area of El Orejano, Argentina's flagship shale gas-project, so many blue fracking-fluid pipelines crisscross the ground that workers from YPF and Schlumberger Ltd., the Houston-based oil service giant, have to take care not to stumble over them. Tanks supply water that is mixed with chemicals and sand and then blasted at high pressure into rock formations below, fracturing and releasing gas. "If we could tap just 7% of the resources we have in Vaca Muerta, we could double Argentina's gas production," Pablo Bizzotto, who runs YPF's regional unconventional operations, said from inside a trailer where technicians used laptops to control a drill snaking toward the shale. World-wide, oil-and-gas companies cut capital spending by about 20% last year, with spending falling by as much as 40% in the U.S., according to Moody's Investors Service. Related * CEO of Argentina Oil Company YPF to Depart YPF increased spending by about 4%. "It shows the government's strong desire to boost domestic oil and gas production and maintain employment," said Matt Blomerth, an analyst at energy consulting firm Wood Mackenzie. This doesn't mean Argentina is immune to the global slowdown. The number of working rigs was down 39% from a year earlier in February, according to Baker Hughes Inc. Companies here have laid off or furloughed workers, and YPF plans to cut spending by up to 25% this year. But the drop in rigs hasn't been as dramatic in the U.S., where it fell 59% from a year earlier. The government is also working to protect Argentina from the kind of mass layoffs that have hit the industry world-wide. More than 319,000 jobs have disappear since 2014, according to Graves & Co., an energy-transaction-advisory firm. "If you lower the price to a certain point, it's not like you lose a rig or two, but you cause a pretty big shutdown and you lose a lot of jobs," said Chris Boswell, chief executive of EcoStim Energy Solutions Inc., a Houston oil-field-services company working with YPF. In January, Argentina's labor ministry agreed with unions and Chubut, another oil-producing province, to artificially raise the price of exportable heavy crude by $10 a barrel, to around $34, so companies mining the tar-like oil don't lose more money. The six-month deal could save 3,000 to 5,000 jobs, officials say. "We are doing this to sustain activity and employment," Argentina's labor minister, Jorge Triaca, said last month. Argentina spent $11 billion last year bolstering oil and gas prices, according to an official estimate. Motorists here foot a big part of that bill for the oil sector by paying about double what U.S. drivers do for a gallon of gasoline. The government owes almost $1.7 billion in back payments to companies for producing natural gas. For Fernando Navajas, who studies energy issues at FIEL, an economic research firm, the data indicate the cost to produce a barrel of oil is surpassing the subsidized rate. He said that is "unsustainable, even in the best of cases," unless production costs tumble and oil prices rebound. Mr. Galuccio, however, says the prices keep YPF's shale operations marginally profitable. Argentine officials say they are banking on prices rising, so they can eventually wean the country off price props. "If you believe this price is going to stay at $20 for next 50 years, then what we're doing is wrong," said Mr. Galuccio, the YPF CEO, who was appointed by Mrs. Kirchner in 2012 and will leave the company in April , officials said Wednesday. "If prices rebound," he said, "we are big winners." Write to Taos Turner at taos.turner@wsj.com Credit: By Taos Turner
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771605621
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771605621?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Twitter Deletes Oil-Data Tweets Following Industry Complaints; American Petroleum Institute alleges several users posted its weekly data on U.S. inventory levels without authorization
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Mar 2016: n/a.
Abstract:
The American Petroleum Institute recently sent a notice to the social network, alleging that several users had tweeted its weekly data on U.S. oil-inventory levels without authorization, according to documents reviewed by The Wall Street Journal. API's request was under the Digital Millennium Copyright Act, a U.S. copyright law that calls on websites hosting allegedly copyright-infringing content to remove it when notified by the rightful owners.
Full text: Twitter deleted posts that included market-sensitive data from a U.S. oil-industry group after the group complained, roiling the tight-knit energy-trading community on the social network. The American Petroleum Institute recently sent a notice to the social network, alleging that several users had tweeted its weekly data on U.S. oil-inventory levels without authorization, according to documents reviewed by The Wall Street Journal. The documents show that Twitter has removed at least one post by an oil trader, and other users said that they have also been informed by Twitter that their tweets were deleted after complaints from API. API's inventory data often moves prices after its release every Tuesday. The group charges a subscription for access. The data is used by many traders positioning ahead of the official inventory data, which is released by the U.S. government on Wednesdays. Inventory data has grown in significance since oil prices started their precipitous decline in the summer of 2014. Oil inventories in the U.S. have risen to levels not seen since the 1930s. On Tuesday, several accounts posted the API data shortly after it was released to subscribers at 4.30 p.m. EDT. The posts were widely shared across the social network. Prices extended their losses shortly after the report, which showed a larger-than-expected increase in weekly inventories. An account named @Cornice_Trading posted the data along with a message saying, "I don't have a sub, whatchugonnado API?!?" Through Wednesday afternoon, it had been retweeted five times and had received six likes. Marc Kerrest, who runs the account and heads the San Francisco-based energy fund Cornice Trading LLC, said that censoring the data was "absurd." Mr. Kerrest said he hasn't received any notices from Twitter or API but has heard from several colleagues who have in recent weeks. API has also complained to Dow Jones & Co., publisher of Dow Jones Newswires and The Wall Street Journal, an API spokesman said. He said the group complained last year about Dow Jones's publishing the data to the newswires' paid subscribers without authorization. "While we certainly respect copyright protections, we don't believe that Dow Jones's publication of independently sourced items of news and analysis infringes API's rights in any respect," Dow Jones, a unit of News Corp, said. Dow Jones itself has sued services for republishing its own content. Newswires and other financial websites publish stories based on the API data shortly after it is released to its subscribers. On Tuesday, Dow Jones Newswires published an item containing API data at 4.36 p.m., attributing it to people who reviewed the report. In its notice to Twitter, which was sent through a lawyer, API, the Washington, D.C.-based industry group, named four accounts it says have posted data from its Weekly Statistical Bulletin. "The posted excerpts contain the most important content of the WSB and is the heart of the work that API has created," the notice reads. API says it charges $160 a month for an individual subscription to the Bulletin. The API notice was attached to a letter from Twitter, dated March 2, notifying a trader that a post was removed. API's request was under the Digital Millennium Copyright Act, a U.S. copyright law that calls on websites hosting allegedly copyright-infringing content to remove it when notified by the rightful owners. API said it wouldn't comment beyond the contents of the notice. A spokesman for Twitter said it doesn't comment on individual accounts for privacy and security reasons. Twitter said that in 2015 it received more than 30,000 takedown notices and removed tweets in close to 70% of the cases. The accounts named by API in its complaint to Twitter include oil traders and the popular financial commentary account @zerohedge, which has more than 300,000 followers. Two tweets by @zerohedge have been removed by Twitter in recent weeks. Zerohedge, which also runs a popular website, received notices from both the social network and from API, according to a spokesman for the website. The episode reflects how social networks such as Twitter have emerged as an important platform for traders and investors in recent years. Energy traders often share news, data and trading charts. "Twitter works because groups of energy traders share information together," Mr. Kerrest of @Cornice_Trading said in a Twitter exchange. "The beauty of the Internet age is that information is free and can be shared freely." Twitter has also been a fertile ground for speculation that has moved prices but has proven incorrect. Rumors about the death of the king of Saudi Arabia, one of the world's biggest oil producing countries, last year were swirling on the social network for several weeks before he died in January. In October 2013, a Tweet posted by the Israeli military initially suggested it had bombed Syrian airports, fueling risks of geopolitical escalation in the Middle East. Oil prices jumped $1 after the tweet was posted and widely shared on network. However, the posting actually referred to an attack 40 years ago in the Yom Kippur war. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Social networks; Petroleum industry; Inventory; Copyright
Location: United States--US
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: News Corp; NAICS: 511110, 515120, 551112; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771606460
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771606460?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
CEO of Argentina Oil Company YPF to Depart; Miguel Galuccio will be succeeded as chairman by Miguel Gutiérrez; search for new CEO under way
Author: Turner, Taos
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Mar 2016: n/a.
Abstract: None available.
Full text: BUENOS AIRES--Miguel Galuccio, the chief executive of YPF, Argentina's state-run oil company, will step down after an annual shareholders meeting at the end of April, the company said Wednesday. Mr. Galuccio will be succeeded as chairman of YPF's board by Miguel Gutiérrez, a former head of the local telecom conglomerate Grupo Telefónica, Argentina's Energy Ministry said. YPF now begins a search for a replacement CEO. Mr. Gutiérrez declined to comment. Mr. Galuccio was appointed to head YPF in 2012 by then President Cristina Kirchner after her government expropriated the company from Spain's Repsol. His departure comes after President Mauricio Macri, who took office in December, decided to pursue new management at the company, which is 51% government-owned. In an interview at his office on Wednesday, Mr. Galuccio said he is eager to help the government ensure a smooth transition to new leadership. "When I arrived in 2012 I found a company that was totally different," he said. "Employees were de-motivated, had low morale and had no plan. Today the transition will be totally different. YPF has clear projects. It is a company that is growing and its resources are desired around the world." Oil and gas production in Argentina plummeted during the Kirchner administration as unpopular policies and low domestic oil and gas prices discouraged investment. When Mr. Galuccio took over, YPF's gas production was declining by around 11%, he said. He immediately embarked on an ambitious plan to raise output, doubling investment and spurring YPF to boost gas output by 32% in four years. The company increased oil production by 10%. Mr. Galuccio also pushed hard to develop Argentina's massive shale oil and gas resources. At a time when foreign investment in Argentina was minimal, he got companies such as Chevron Corp. and Malaysia's Petroliam Nasional Bhd., or Petronas, to partner with YPF in multi-billion-dollar joint ventures. Those and other deals have helped turn Argentina into the leading unconventional energy producer outside of North America. YPF is Argentina's biggest company, but it is also one that many Argentines consider a symbol of national sovereignty. Mr. Macri, a business friendly president who criticized YPF's expropriation, has said he would not privatize the company. At YPF's headquarters on Wednesday employees who worked with Mr. Galuccio through the years wept as he discussed his departure. Mr. Galuccio, who left an executive job at oil-field-services company Schlumberger to lead YPF, said he would take a few weeks off after stepping down. After that, he will evaluate his career options. One thing he may consider: working on a private-equity project involving energy. Write to Taos Turner at taos.turner@wsj.com Credit: By Taos Turner
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771616764
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771616764?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
On the Fuel Tanker's Trail: Cracking Oil Smuggling Could Help Stem Flow of Migrants and Weapons; Vessel's voyages from Libya to Europe provide clues about trafficking of fuel, weapons and people, security officials say
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Mar 2016: n/a.
Abstract:
Fuel smuggling is "providing a significant source of revenue for local armed groups and criminal networks" in Libya, according to a U.N. Security Council report on Libya reviewed by The Wall Street Journal.
Full text: VALETTA, Malta--Western security officials attempting to crack smuggling networks trafficking fuel, weapons and humans across the Mediterranean are focusing on fuel tankers believed to be illegally shipping oil products from Libya to Europe. Western and Libyan officials believe fuel smugglers use the same networks, vessels and ports that also make Libya a regional hub for trafficking weapons and humans. In recent months, Spanish, French and Maltese officials have begun tracking the movements of vessels in the Mediterranean, hoping to stop the illegal trade, security officials said. Shutting down fuel-smuggling routes could undermine networks that also bring migrants to Europe from Libya, the officials said. Fuel smuggling is "providing a significant source of revenue for local armed groups and criminal networks" in Libya, according to a U.N. Security Council report on Libya reviewed by The Wall Street Journal. One vessel U.N. investigators and western security officials said they are focusing on is the Basbosa Star, a merchant vessel flagged in the Pacific island chain of Palau. The ship has been involved in a string of transactions that officials believe shed light on the trafficking networks. In January 2015, the ship loaded its 1,621-ton capacity hold with liquids off the coast of Libya and headed for the island of Malta, according to the officials and maritime data company Windward. Five times over the following two months, the tanker pumped some of its cargo into the hold of another fuel vessel, which made deliveries to a fuel-tank depot in Malta, according to the officials and Windward. The Basbosa Star made a similar trip as recently as last month, loading up near the Libyan coast and then passing some of its cargo to another vessel bound for Sicily, according to Windward. On one such voyage earlier this year, when the Basbosa Star approached the Libyan coast it turned off its radio, according to Windward. Six days later, it reappeared on its way to Malta, where it transferred some of its cargo to a Ukrainian vessel called the Ruta, according to Windward. The data company can determine when a vessel is loaded or unloaded using radio signals sent by vessels detailing how low they are sitting in the water. On Feb. 16, Windward said, the Ruta unloaded the oil products in the Sicilian port of Augusta. The port hosts the base of the main Italian Navy force dedicated to stopping illegal immigration. Security officials say that they suspect the Basbosa Star is smuggling motor fuel to Europe from Libya, a potentially lucrative business. Smugglers can make a profit by buying fuel products in Libya--a major oil producer that subsidizes fuel locally--and then selling them at much higher prices in Europe, where taxes keep prices high. The center of the illegal trade is in the western port of Zuwara, the U.N. report said, and it is also the main hub for human trafficking. The U.N. report said the Basbosa Star is owned, through a company, by Darren Debono of Malta, Ahmed Arafa of Egypt, and Fahmi Bin Khalifa of Zuwara, Libya. A lawyer for the men said they have never owned the ship and had done nothing wrong. The general manager of the Ruta's owner Manchester Shipping said he couldn't comment. Mediterranean smuggling has become a rising concern for Western governments with the rise of Islamic State in Libya, where the radical group controls some areas along illicit trade routes. Libyan officials say members of Islamic State have been arrested in Tunisia for smuggling fuel products in from Libya, though there is no evidence the group has sent products to Europe yet. "Fuel smuggling is financing other activities such as gunrunning, drugs smuggling and human trafficking," said Omar al-Sinki, a Libyan government official who has worked on smuggling issues. The illegal trade exploits divisions that have developed in the North African nation since the 2011 ouster and death of dictator Moammar Gadhafi. The country is ruled by an Islamist government in Tripoli and an internationally supported government in the east. United Nations-backed peace talks led to an agreement to form a unity government, but the militias that control most of the country have blocked its creation. Libya has also emerged as a major center for arms dealing, as much of Gadhafi's military arsenal was taken over by militias. Some of those weapons were sold to dealers in Turkey for use in Syria, according to the U.N. According to the EU, about 157,000 people fled North Africa by sea--mostly from Libya--for the bloc in 2015, part of a wave of migrants that has flooded the continent in recent months. Al-Sadiq Al-Saour, the head of investigations at the Libyan attorney general's office, said fuel smugglers are tough to catch because the complex trades involve European middlemen and are done in international waters. "We need cooperation [with European countries] to stop them," said Mr. Al-Saour who is based in Tripoli but independent of both governments. Western governments have been cautious about working with Libyan institutions until a unity government is formed, and they aren't working in a coordinated fashion with the country on smuggling yet, security officials said. Officials at Maltese and Italian antifraud police and customs declined to comment. Western officials say tracing the origin of the fuel is further complicated by the fact much of the subsidized fuel sold in Libya is imported. Militias that help run Libya often benefit from smuggling of all kinds. Eric Sylvers in Milan contributed to this article. Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon and Summer Said
Subject: Smuggling; Ports; Human trafficking
Location: Europe Libya
Company / organization: Name: United Nations Security Council; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 10, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771634528
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771634528?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Targets Oil, Gas Wells to Cut Methane Emissions; U.S., Canada commit to reducing emissions by 2025
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Mar 2016: n/a.
Abstract:
The U.S. Environmental Protection Agency, already working on rules cutting methane emissions from oil and gas wells not yet drilled, will begin devising regulations for existing wells and aims to release in April draft requirements for companies to provide information about equipment, emissions and control technologies from a broad range of oil and gas activities, including production, transmission, processing and storage, EPA Administrator Gina McCarthy said Thursday.
Full text: WASHINGTON--The Obama administration on Thursday announced its first step toward regulating methane emissions from hundreds of thousands of oil and natural-gas wells across the U.S., drawing pushback from an industry battered by cheap oil and cheers from environmentalists. The administration made the announcement in coordination with Canada, which is taking similar actions. Canada's new prime minister, Justin Trudeau, is visiting the White House for the first time since taking office in November. The U.S. and Canada will commit to cut methane emissions from oil and gas by between 40% and 45% below 2012 levels by 2025, a commitment the Obama administration has previously made. The U.S. Environmental Protection Agency, already working on rules cutting methane emissions from oil and gas wells not yet drilled, will begin devising regulations for existing wells and aims to release in April draft requirements for companies to provide information about equipment, emissions and control technologies from a broad range of oil and gas activities, including production, transmission, processing and storage, EPA Administrator Gina McCarthy said Thursday. The step, being taken under the Clean Air Act, indicates the agency is preparing to write a regulation that is likely to affect hundreds of thousands of existing wells across the U.S. The Canadian government's environmental regulator also intends to regulate methane emissions from new and existing oil and natural gas sources, publishing initial proposed rules by early 2017. Canada, under previous Conservative Prime Minister Stephen Harper, never introduced rules limiting emissions from the energy sector, earning rebukes from environmental groups. In contrast, the Liberal government under Mr. Trudeau has pivoted on climate change policy, setting out aggressive goals to reduce carbon emissions. "Our countries are stepping up to the challenge of methane emissions, and driving forward the regulatory measures necessary to curb methane emissions from existing oil and gas sources," said Brian Deese, senior adviser to President Barack Obama. The EPA is unlikely to complete a regulation before Mr. Obama leaves office at the end of 2016. Any proposal the EPA issues would likely stay on track if a Democrat wins the White House, while a Republican administration would likely withdraw it. Ms. McCarthy wouldn't say Thursday whether the EPA would propose a rule before Mr. Obama leaves office. Thursday's announcement is the latest step in a broader effort to clamp down on domestic greenhouse-gas emissions and show the U.S. is moving to address a global deal on climate change that roughly 200 nations agreed to late last year. The EPA is planning to issue in the coming months its final rule affecting future oil and gas wells. The Interior Department also proposed in January rules to cut methane emissions from existing oil and natural-gas operations on federal lands, which account for a small portion of domestic drilling. Over the past year, the Obama administration has focused increasingly on methane emissions, which the EPA says have a warming effect on the planet at least 25 times that of carbon dioxide. Methane is the primary component of natural gas. The EPA says the oil and gas sector's methane emissions account for almost 30% of all U.S. methane emissions, second to agricultural sources, which account for roughly 36%. Methane emissions from oil and natural gas production have dropped roughly 15% from 2005 through 2012, according to administration data, despite the increase in production. The U.S. government estimates these emissions will rise 25% over the next decade if steps aren't taken to reduce them. With the onset of the energy boom over the past decade, some companies have practiced flaring, the burning off of excess gas as carbon dioxide, or venting, the emission of methane straight into the atmosphere, if pipelines or other infrastructure aren't immediately available to transport and process it. Environmentalists and some Democratic lawmakers have been urging the administration to regulate existing oil and gas wells across the U.S., on federal, private and state lands alike, and will likely support the EPA's latest move in that direction. "The historic agreement addresses one of the most serious aspects of our climate crisis--methane emissions from the oil and gas industry," said Fred Krupp, president of the Environmental Defense Fund, an environmental organization that works with companies to cut emissions. The oil and natural gas industry has grown increasingly critical of the Obama administration over the past two years as government agencies have rolled out emissions reduction proposals. Arguing that the federal government is overreaching its executive authority across a range of energy issues, industry executives say new methane rules are unnecessary because companies are cutting emissions voluntarily. "Even as oil and natural gas production has risen dramatically, methane emissions have fallen, thanks to industry leadership and investment in new technologies," said Kyle Isakower, a vice president at the American Petroleum Institute, the oil and gas industry's biggest trade organization. "These industry-led efforts are a proven way to reduce methane emissions from existing sources, and they are clearly working." Paul Vieira contributed to this article. Write to Amy Harder at amy.harder@wsj.com Credit: By Amy Harder
Subject: Methane; Natural gas; Emissions; Environmental regulations; Carbon; Environmental protection; Regulation; Environmental policy; Climate change; Energy industry; Environmentalists; Prime ministers
Location: United States--US Canada
People: Obama, Barack Trudeau, Justin Harper, Stephen McCarthy, Gina Deese, Brian
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 10, 2016
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771777394
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771777394?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Tweets Deleted After Protest --- Industry group API alleges Twitter users posted inventory data without authorization
Author: Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Mar 2016: C.4.
Abstract:
API's request was under the Digital Millennium Copyright Act, a U.S. copyright law that calls on websites hosting allegedly copyright-infringing content to remove it when notified by the rightful owners.
Full text: Twitter deleted posts that included market-sensitive data from a U.S. oil-industry group after the group complained, roiling the tight-knit energy-trading community on the social network. The American Petroleum Institute recently sent a notice to the social network, alleging that several users had tweeted its weekly data on U.S. oil-inventory levels without authorization, according to documents reviewed by The Wall Street Journal. The documents show that Twitter has removed at least one post by an oil trader, and other users said that they also have been informed by Twitter that their tweets were deleted after complaints from API. API's inventory data often moves prices after its release every Tuesday. The group charges a subscription for access. The data is used by many traders positioning ahead of the official inventory data, which is released by the U.S. government on Wednesdays. Inventory data has grown in significance since oil prices started their precipitous decline in the summer of 2014. Oil inventories in the U.S. have risen to levels unseen since the 1930s. On Tuesday, several accounts posted the API data shortly after it was released to subscribers at 4.30 p.m. EDT. The posts were widely shared across the social network. Prices extended their losses shortly after the report, which showed a larger-than-expected increase in weekly inventories. An account named @Cornice_Trading posted the data along with a message saying, "I don't have a sub, whatchugonnado API?!?" Through Wednesday afternoon, it had been retweeted five times and had received six "likes." Marc Kerrest, who runs the account and heads the San Francisco-based energy fund Cornice Trading LLC, said that censoring the data was "absurd." Mr. Kerrest said he hasn't received any notices from Twitter or API but has heard from several colleagues who have in recent weeks. API also has complained to Dow Jones & Co., publisher of Dow Jones Newswires and the Journal, an API spokesman said. He said the group complained last year about Dow Jones's publishing the data to the newswires' paid subscribers without authorization. "While we certainly respect copyright protections, we don't believe that Dow Jones's publication of independently sourced items of news and analysis infringes API's rights in any respect," Dow Jones, a unit of News Corp, said. Dow Jones itself has sued services for republishing its own content. Newswires and other financial websites publish stories based on the API data shortly after it is released to its subscribers. On Tuesday, Dow Jones Newswires published an item containing API data at 4.36 p.m., attributing it to people who reviewed the report. In its notice to Twitter, which was sent through a lawyer, API, the Washington-based industry group, named four accounts it says have posted data from its Weekly Statistical Bulletin. "The posted excerpts contain the most important content of the WSB and is the heart of the work that API has created," the notice reads. API says it charges $160 a month for an individual subscription to the Bulletin. The API notice was attached to a letter from Twitter, dated March 2, notifying a trader that a post was removed. API's request was under the Digital Millennium Copyright Act, a U.S. copyright law that calls on websites hosting allegedly copyright-infringing content to remove it when notified by the rightful owners. API said it wouldn't comment beyond the contents of the notice. A spokesman for Twitter said it doesn't comment on individual accounts for privacy and security reasons. Twitter said that in 2015 it received more than 30,000 takedown notices and removed tweets in close to 70% of the cases. Credit: By Georgi Kantchev
Subject: Inventory; Copyright; Social networks; Petroleum industry
Location: United States--US
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: American Petroleum Institute; NAICS: 813910, 541820
Classification: 8510: Petroleum industry; 8331: Internet services industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 10, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771795054
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771795054?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Argentina Gives Oil Drillers a Boost
Author: Turner, Taos
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Mar 2016: B.1.
Abstract:
Since taking office in December, Argentina's president, Mauricio Macri, has been reversing the populist policies of his predecessor, Cristina Kirchner, undoing everything from currency controls to export taxes.
Full text: NEUQUEN, Argentina -- From North Dakota to Texas and beyond, oil and gas companies have sharply reined in drilling and thousands of workers are being laid off. But here, where the oil and gas industry operates inside a government-made, subsidized bubble, taxpayers and drivers spend billions of dollars to try to keep that from happening. A barrel of oil fetches more than twice what it does in the U.S., and prices for natural gas can be nearly four times higher. That is helping shield producers and their workers developing the vast shale oil-and-gas deposits buried under a desolate swath of western Patagonia called Vaca Muerta, or Dead Cow, from the vagaries of world markets. Since taking office in December, Argentina's president, Mauricio Macri, has been reversing the populist policies of his predecessor, Cristina Kirchner, undoing everything from currency controls to export taxes. But he is expanding the expensive programs she used to decouple energy prices from global markets. "This is so important, strategically," said Miguel Galuccio, chief executive of Argentina's state-run oil company, YPF SA. With the price of light crude set at $67 a barrel and natural gas at $7.50 per million British Thermal Units -- compared with less than $2 in the U.S. -- the policy has made Argentina one of the few places on Earth where energy companies are looking to expand their operations. Some energy analysts say the country's high production costs make the system sustainable. But proponents here note that since December, Dow Chemical Co. and American Energy Partners LP -- which had been run by Aubrey McClendon, the shale-drilling pioneer who died earlier this month -- have said they plan to invest in a partnership with YPF to develop shale oil and gas. YPF also has said it plans soon to form a joint venture with Russia's PAO Gazprom. "You've got to incentivize people to do exploration and development, especially when prices are low," said Ali Moshiri, president of Latin America and Africa for Chevron Corp., which has an exploration-and-production joint venture with YPF. "If Argentina carries on with these incentives, it will encourage others to come to the country." In this arid patch of Patagonia, YPF is running 350-ton drilling rigs that dig 9,000 feet deep in search of gas. Far below red rocks and desert scrub lie 27 billion barrels of technically recoverable oil and 802 trillion cubic feet of gas trapped in a layer of shale up to 1,200 feet thick, according to the U.S. Energy Information Administration. In one area of El Orejano, Argentina's flagship shale gas-project, so many blue fracking-fluid pipelines crisscross the ground that workers from YPF and Schlumberger Ltd., the Houston-based oil service giant, have to take care not to stumble over them. "If we could tap just 7% of the resources we have in Vaca Muerta, we could double Argentina's gas production," Pablo Bizzotto, who runs YPF's regional unconventional operations. World-wide, oil-and-gas companies cut capital spending by about 20% last year, with spending falling by as much as 40% in the U.S., according to Moody's Investors Service. YPF increased spending by about 4%. "It shows the government's strong desire to boost domestic oil and gas production and maintain employment," said Matt Blomerth, an analyst at energy consulting firm Wood Mackenzie. Argentina isn't immune to the global slowdown. The number of working rigs was down 39% from a year earlier in February, according to Baker Hughes Inc. Companies here have laid off or furloughed workers, and YPF plans to cut spending by up to 25% this year. But the drop in rigs hasn't been as dramatic in the U.S., where it fell 59% from a year earlier. The government is also working to protect Argentina from the kind of mass layoffs that have hit the industry world-wide. More than 319,000 jobs have disappear since 2014, according to Graves & Co., an energy-transaction-advisory firm. In January, Argentina's labor ministry agreed with unions and Chubut, another oil-producing province, to artificially raise the price of exportable heavy crude by $10 a barrel, to around $34, so companies mining the tar-like oil don't lose more money. The six-month deal could save 3,000 to 5,000 jobs, officials say. "We are doing this to sustain activity and employment," Argentina's labor minister, Jorge Triaca, said last month. Argentina spent $11 billion last year bolstering oil and gas prices, according to an official estimate. Motorists here foot a big part of that bill for the oil sector by paying about double what U.S. drivers do for a gallon of gasoline. The government owes almost $1.7 billion in back payments to companies for producing natural gas. For Fernando Navajas, who studies energy issues at FIEL, an economic research firm, the data indicate the cost to produce a barrel of oil is surpassing the subsidized rate. He said that is "unsustainable, even in the best of cases," unless production costs tumble and oil prices rebound. Mr. Galuccio, however, says the prices keep YPF's shale operations marginally profitable. Argentine officials say they are banking on prices rising, so they can eventually wean the country off price props. "If you believe this price is going to stay at $20 for next 50 years, then what we're doing is wrong," said Mr. Galuccio, the YPF CEO. "If prices rebound," he said, "we are big winners." Credit: By Taos Turner
Subject: Prices; Capital expenditures; Energy industry; Natural gas utilities; Oil shale; Petroleum industry; Layoffs; Natural gas industry; Economic conditions -- Argentina
Location: Argentina
Classification: 6100: Human resource planning; 9173: Latin America; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Mar 10, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771796133
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771796133?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Shell Cuts Chief Executive's Pay After Oil Glut Slashes Profits; Shell's profit for the year fell 80% to $3.8 billion, compared with $19 billion in 2014
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Mar 2016: n/a.
Abstract:
LONDON--Royal Dutch Shell PLC Chief Executive Ben van Beurden took an 8% pay cut in 2015, with his direct compensation dropping to [euro]5.1 million ($5.61 million) after a historic oil-price slump sliced the company's profits .
Full text: LONDON--Royal Dutch Shell PLC Chief Executive Ben van Beurden took an 8% pay cut in 2015, with his direct compensation dropping to [euro]5.1 million ($5.61 million) after a historic oil-price slump sliced the company's profits . Mr. van Beurden's salary and bonus were steady last year, but the value of his performance-linked shares tumbled. Mr. van Beurden received just 16% of his shares under a long-term incentive plan that takes into account the company's performance over a three-year time frame. Shell has underperformed its peers in several metrics over the last three years, including total shareholder returns and growth in oil and gas production. Last year, its profits dropped 80% after tumbling oil prices hammered the company's earnings. Mr. van Beurden's brief tenure as chief executive has been eventful. He took over Shell at the start of 2014, six months before oil prices began their current dive. He has overseen a large wave of cost-cuts, shelved big projects in the Alaskan arctic and Canadian oil sands, and pushed Shell's roughly $50 billion takeover of BG Group PLC last year. "The CEO provided strong leadership both strategically and operationally," Shell said in its annual report Thursday. Mr. Van Beurden's total remuneration--including his pension--totaled $6.2 million, but was also dented by a sharp decline in pension receipts after last year's number was inflated by tax and accounting requirements relating to his promotion to chief executive and move to the Netherlands. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Petroleum industry; Executive compensation; Corporate profits; Wages & salaries
Location: Netherlands United States--US
People: van Beurden, Ben
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BG Group PLC; NAICS: 486210, 211111, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 10, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771854041
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771854041?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Slide on Lower OPEC Expectations; Report says meeting of large oil-producing nations unlikely to take place
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Mar 2016: n/a.
Abstract:
Prices have climbed in recent weeks on expectations that large producing nations, including members of the Organization of the Petroleum Exporting Countries, would agree to freeze their output at January levels.
Full text: NEW YORK--Oil prices fell Thursday on a report that major producers are unlikely to meet to discuss an output freeze. Prices have climbed in recent weeks on expectations that large producing nations, including members of the Organization of the Petroleum Exporting Countries, would agree to freeze their output at January levels. Saudi Arabia, Russia, Qatar and Venezuela previously said they were willing to freeze, and other producers in Latin America, Africa and the Persian Gulf appeared likely to join a meeting as well. But a Reuters article released Thursday said that a meeting between OPEC and non-OPEC nations is unlikely to happen because Iran hasn't committed to freeze its production. Light, sweet crude for April delivery recently fell 86 cents, or 2.3%, to $37.43 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $1.23, or 3%, to $39.84 a barrel on ICE Futures Europe. Iran is expected to increase its production this year now that international sanctions are lifted, and market watchers say higher Iranian output could offset declining production from the U.S. and other countries. Iran's oil minister said last month that the suggestion that his country would freeze production was "a joke." An Iranian oil ministry official told The Wall Street Journal in February that Iran would only consider curbing its output once it had reached pre-sanction levels of roughly four million barrels a day. Iran currently produces less than three million barrels a day. Iran's participation would be essential for an output deal to successfully shrink the global glut of crude, analysts have said. Kuwait's energy minister said Tuesday that the country wouldn't agree to freeze its output unless Iran also agreed to do so. Oil prices have surged in recent weeks on expectations of an output deal among major producers and some supply outages in Nigeria and Iraq. However, analysts warn that prices could slump again as the global market remains oversupplied. "The rally is built on the tenuous assumption that production will continue to decline, demand will rise to reduce inventories, and numerous sovereign nations will cooperate to support prices," said A.J. McNally, chief executive of ClearHedging, in a note. "But the underlying fundamentals are not yet in balance and it is probable that we will see lower prices at some point in 2016." U.S. crude stockpiles rose last week to their highest level in more than 80 years, the Energy Information Administration said Wednesday. Gasoline futures recently fell 2% to $1.4415 a gallon. Diesel futures fell 1.6% to $1.2128 a gallon. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Crude oil prices; Petroleum industry; Sanctions; Futures
Location: Iran Qatar Venezuela Africa Russia United States--US Persian Gulf Saudi Arabia Latin America
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 10, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771866585
Document URL: https://login.ezproxy.uta.edu/lo gin?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771866585?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Argentina's 'Dead Cow' Provides Rare Bright Spot for Oil, Gas Drillers; As companies rein in drilling world-wide, government buoys firms developing 'Vaca Muerta' shale play
Author: Turner, Taos
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Mar 2016: n/a.
Abstract: None available.
Full text: NEUQUÉN, Argentina--From North Dakota to Texas and beyond, oil and gas companies have sharply reined in drilling and thousands of workers are being laid off. But here, where the oil and gas industry operates inside a government-made, subsidized bubble, taxpayers and drivers spend billions of dollars to try to keep that from happening. A barrel of oil fetches more than twice what it does in the U.S., and prices for natural gas can be nearly four times higher. That is helping shield producers and their workers developing the vast shale oil-and-gas deposits buried under a desolate swath of western Patagonia called Vaca Muerta, or Dead Cow, from the vagaries of world markets. Since taking office in December , Argentina's president, Mauricio Macri, has been reversing the populist policies of his predecessor, Cristina Kirchner, undoing everything from currency controls to export taxes. But he is expanding the expensive programs she used to decouple energy prices from global markets. "This is so important, strategically," said Miguel Galuccio, chief executive of Argentina's state-run oil company, YPF SA. With the price of light crude set at $67 a barrel and natural gas at $7.50 per million British Thermal Units--compared with less than $2 in the U.S.--the policy has made Argentina one of the few places on Earth where energy companies are looking to expand their operations. Some energy analysts say the country's high production costs make the system unsustainable. But proponents here note that since December, Dow Chemical Co. and American Energy Partners LP--which had been run by Aubrey McClendon, the shale-drilling pioneer who died earlier this month--have said they plan to invest in a partnership with YPF to develop shale oil and gas. YPF also has said it plans soon to form a joint venture with Russia's PAO Gazprom. "You've got to incentivize people to do exploration and development, especially when prices are low," said Ali Moshiri, president of Latin America and Africa for Chevron Corp., which has an exploration-and-production joint venture with YPF. "If Argentina carries on with these incentives, it will encourage others to come to the country." In this arid patch of Patagonia, YPF is running 350-ton drilling rigs that dig 9,000 feet deep in search of gas. Far below red rocks and desert scrub lie 27 billion barrels of technically recoverable oil and 802 trillion cubic feet of gas trapped in a layer of shale up to 1,200 feet thick, according to the U.S. Energy Information Administration. In one area of El Orejano, Argentina's flagship shale gas-project, so many blue fracking-fluid pipelines crisscross the ground that workers from YPF and Schlumberger Ltd., the Houston-based oil service giant, have to take care not to stumble over them. Tanks supply water that is mixed with chemicals and sand and then blasted at high pressure into rock formations below, fracturing and releasing gas. "If we could tap just 7% of the resources we have in Vaca Muerta, we could double Argentina's gas production," Pablo Bizzotto, who runs YPF's regional unconventional operations, said from inside a trailer where technicians used laptops to control a drill snaking toward the shale. World-wide, oil-and-gas companies cut capital spending by about 20% last year, with spending falling by as much as 40% in the U.S., according to Moody's Investors Service. Related * CEO of Argentina Oil Company YPF to Depart YPF increased spending by about 4%. "It shows the government's strong desire to boost domestic oil and gas production and maintain employment," said Matt Blomerth, an analyst at energy consulting firm Wood Mackenzie. This doesn't mean Argentina is immune to the global slowdown. The number of working rigs was down 39% from a year earlier in February, according to Baker Hughes Inc. Companies here have laid off or furloughed workers, and YPF plans to cut spending by up to 25% this year. But the drop in rigs hasn't been as dramatic in the U.S., where it fell 59% from a year earlier. The government is also working to protect Argentina from the kind of mass layoffs that have hit the industry world-wide. More than 319,000 jobs have disappear since 2014, according to Graves & Co., an energy-transaction-advisory firm. "If you lower the price to a certain point, it's not like you lose a rig or two, but you cause a pretty big shutdown and you lose a lot of jobs," said Chris Boswell, chief executive of EcoStim Energy Solutions Inc., a Houston oil-field-services company working with YPF. In January, Argentina's labor ministry agreed with unions and Chubut, another oil-producing province, to artificially raise the price of exportable heavy crude by $10 a barrel, to around $34, so companies mining the tar-like oil don't lose more money. The six-month deal could save 3,000 to 5,000 jobs, officials say. "We are doing this to sustain activity and employment," Argentina's labor minister, Jorge Triaca, said last month. Argentina spent $11 billion last year bolstering oil and gas prices, according to an official estimate. Motorists here foot a big part of that bill for the oil sector by paying about double what U.S. drivers do for a gallon of gasoline. The government owes almost $1.7 billion in back payments to companies for producing natural gas. For Fernando Navajas, who studies energy issues at FIEL, an economic research firm, the data indicate the cost to produce a barrel of oil is surpassing the subsidized rate. He said that is "unsustainable, even in the best of cases," unless production costs tumble and oil prices rebound. Mr. Galuccio, however, says the prices keep YPF's shale operations marginally profitable. Argentine officials say they are banking on prices rising, so they can eventually wean the country off price props. "If you believe this price is going to stay at $20 for next 50 years, then what we're doing is wrong," said Mr. Galuccio, the YPF CEO, who was appointed by Mrs. Kirchner in 2012 and will leave the company in April , officials said Wednesday. "If prices rebound," he said, "we are big winners." Write to Taos Turner at taos.turner@wsj.com Corrections & Amplifications: Some energy analysts say Argentina's high production costs make the system unsustainable. An earlier version of this article incorrectly stated analysts described the system as sustainable. (March 10) Credit: By Taos Turner
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1771866753
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1771866753?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Low Oil Prices Force Russian Defense Cuts, Top Military Business Boss Says; Procurement will fall by 10% this year even as Russia displays its military might in Syria
Author: Sonne, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract:
[...]the government is pressing ahead with an array of cuts to avoid running afoul of strict deficit targets. The holding is in talks to sell 20-25% of Russian Helicopters to Abu Dhabi-based Mubadala Development Co., Mr. Chemezov said, and is preparing to sell up to 49% of KRET, the holding's maker of avionics and electronic warfare systems.
Full text: MOSCOW--Russian defense procurement will drop by about 10% this year as low oil and gas prices drain income from the state budget, according to the powerful head of the conglomerate that controls the key pieces of Russia's military-industrial complex. Sergei Chemezov, chief executive of the Russian state industrial holding Rostec --the maker of weapons including Kalashnikov assault rifles and Pantsir antiaircraft systems--said he expected the Russian defense sector to contend with a decrease in government orders. "Oil and gas prices aren't as high as desired, and they're the main source of income for the budget," said Mr. Chemezov. "So, of course, it's completely understandable that there is a reduction in defense orders." Added Mr. Chemezov: "It's not to the point of being critical for our industry." The anticipated reduction underscores that military spending--a strategic priority for President Vladimir Putin--is no longer sacrosanct in an era of low commodity prices. Related * WSJ Q&A With Sergei Chemezov Russia is in the midst of its biggest military modernization since the Soviet era. In 2011, Mr. Putin launched a decadelong, 23-trillion-ruble ($321 billion) rearmament of Russian forces, with the goal of updating 70% of the country's military equipment. The geopolitical standoff with the West has endowed the task with new urgency. But a steep drop in commodity prices has pushed Russia into recession and depleted oil-and-gas revenues that bankrolled a more than 1000% increase in the defense budget since 2000. Crude has now fallen to prices well below the $50-a-barrel estimate Russia originally used to calculate its 2016 budget. As a result, the government is pressing ahead with an array of cuts to avoid running afoul of strict deficit targets. Initially, Russian officials said defense would be spared. Earlier this month, however, a Ministry of Defense official confirmed in a Russian radio interview that the overall 3.14- trillion-ruble defense budget would be slashed by 5%. Analysts estimate that defense procurement accounts for well over half that budget. The cuts herald the end of an era of rapid growth in Russian defense expenditure, even as Mr. Putin engages in the most high-end display of Russian military might since the Soviet era in Syria. Russia hasn't reduced top-line military spending since 1998. Still, Russia's defense sector has fared better amid the recession than consumer-dependent parts of the Russian economy. Russian defense outlays remain very high, at about 4% of gross domestic product, with a steady flow of arms orders. The Russian ruble's dramatic slide has also made Rostec's dollar-denominated arms sales abroad more lucrative. Those sales are helping the conglomerate maintain profitability, according to Mr. Chemezov. Sanctions already forced the arms-maker to substitute Western components with domestic alternatives or Asian parts. Mr. Chemezov's remarks carry particular weight. Originally from Siberia, Mr. Chemezov became friends with Mr. Putin in the 1980s when they both served in the Soviet security services in East Germany. After Mr. Putin rose to the Kremlin, Mr. Chemezov led the charge in reasserting state control over a slew of strategically important companies, mainly in defense but also in other sectors, eventually consolidating them into the government holding now known as Rostec. The conglomerate--which today oversees some 700 enterprises selling everything from missile systems to baby incubators--is an example of Mr. Putin's state capitalism. In theory, Rostec functions partly like a state-sponsored private-equity firm, turning around strategically important businesses using government support with a view to selling stakes in them to private investors. Critics of Russia's state-owned behemoths say they risk wasting money because they lack the discipline, focus and strict business rationale of private firms. Rostec says its stewardship enhances investment and management for important businesses that otherwise might fail. The holding is in talks to sell 20-25% of Russian Helicopters to Abu Dhabi-based Mubadala Development Co., Mr. Chemezov said, and is preparing to sell up to 49% of KRET, the holding's maker of avionics and electronic warfare systems. The KRET stake will be sold in an open auction likely limited to Russian investors as early as this year, he said. The economic challenges at home have given Rostec an extra impetus to sell weaponry abroad. Last month, a Russian newspaper said Iran is looking to buy $8 billion of weapons from Russia, now that sanctions over the country's nuclear program are being lifted. "That is their desire, but so far there is no such deal," Mr. Chemezov said. "Discussions are under way on various subjects, but so far there's nothing concrete." The list of weapons Iran is seeking to buy is "very long," the Russian defense-sector boss said. "First, they still have to find money for all of this." While Russia has extended credit for civilian projects in Iran such as the construction of a thermal power plant, it isn't offering credit for weapons purchases, he added. Mr. Chemezov confirmed that Russia would supply Iran with an S-300 antiaircraft system by the end of the year, a sale that has drawn criticism from the U.S. and Israel. He said Iran would receive the original weapon it ordered, the S-300 PMU-1, even though Russia now produces more modern versions of the antiaircraft system. Another foreign customer that has turned to Russia for weapons is China. Rostec struck an agreement late last year to sell China 24 Su-35 jet fighters for about $2 billion. The deal still requires ratification from both the Russian and Chinese sides, which Mr. Chemezov expects to take place in the coming summer or fall. He said none of the jet fighters would be delivered to China this year. Russia's economic difficulties come as its military continues to aid Syrian President Bashar al-Assad with an air campaign that began last fall. For the Russian defense sector, the Syrian battlefield has become something of a testing area to deploy equipment that in some cases hasn't been tested in combat before. "It's no secret that we are using it as a proving ground," Mr. Chemezov said. "We look at how everything is working, whether it's good or bad, and we make corrections or modifications." Write to Paul Sonne at paul.sonne@wsj.com Credit: By Paul Sonne
Subject: Defense spending; Military sales; Recessions; State budgets
Location: Russia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772033946
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
WSJ Q&A With Sergei Chemezov; The Rostec chief discusses the effects of defense spending, oil prices and sanctions
Author: Sonne, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract: None available.
Full text: Sergei Chemezov is one of the most powerful people in Russia's defense industry . Rostec, the state industrial holding he runs, is a giant in the Russian arms sector, controlling companies that produce Russian small arms, helicopters, radar systems and a wide range of other weapons. A number of the holding's units--and Mr. Chemezov himself--are now subject to Western sanctions over the conflict in Ukraine. The Wall Street Journal sat down with the Rostec chief for a recent interview in Moscow. Below are edited excerpts of Mr. Chemezov's conversation with the Journal. WSJ: Can you give us a picture of how the economic situation and fall in oil prices have affected Rostec's business and the Russian defense sector in general? It's no secret that our entire economy in Russia directly depends on prices for oil and gas. Our industry is no exception. To a certain degree, we are dependent. That dependency becomes less and less with each year, seeing as our businesses are growing. In the past 10 years, our businesses have begun growing widely and producing a wide variety of possible products that give us the possibility to sell not only to the internal market but also sell abroad for export. We receive foreign currency from that, and now that the exchange rate is quite high, it's advantageous for us. If we are talking about the defense sector, our businesses aren't experiencing particularly big economic pressures from the financial market, because there's an opportunity to export abroad, and thanks to that, we are making a pretty good profit, and plus domestically, our defense orders also aren't small. We have seen the statements by the Russian Ministry of Finance saying Russia cannot afford such defense expenditures. Do you agree? Of course. The budget is reducing, because revenues are smaller and smaller. The price of oil and gas isn't as high as desired, and the main source of revenue from the budget comes from that. So of course there is a reduction in government defense orders, it's completely understandable. But it's not to the point of being critical for our industry. Do you think it will actually be a 5% reduction this year? There will be a reduction. There already is one. Will it be by more than 5% this year? I think government defense orders will be reduced by about 10%. Which projects that were allocated funds will be put on hold or should be put on hold? There was a decision by the president and prime minister that what has already been started should be carried out to the end. You can't quit when you're halfway there. Money has already been invested, and if we stop without finishing, then that will be lost money. Everything that has been started will be finished, and money will be allocated to it. We probably won't be releasing anything new for now. That will probably be put on hold. What about the Armata tank ? No, that's already in serial production. There are things that are in the development and testing stages, things that we're only just starting, we'll stop. How will Rostec adapt as defense orders taper? We understand that [government] defense orders won't be forever. Our rearmament program is designed to go until 2020. It will end, and then these order volumes won't be there. The army will still need replacements for older things and will buy new things, but it won't be these volumes. So we set a goal for the heads of all our businesses to increase the percent of civilian products they make to 50% by 2025. Doesn't the economic situation make that harder? Yes, it's complicated, of course, but it's still happening. Already today, we are at 28% civilian products. Before, we had practically none, we had only military production. Our businesses are making medical equipment, and quite good medical equipment. For example, our company Shvabe makes incubators for neonatal centers. Rostec is planning on selling minority stakes in its businesses to private investors. Which businesses are you planning to sell shares in? For defense businesses, we received the right to sell up to 49% of the shares of the company to private investors, including possibly to foreign investors. Related * Low Oil Prices Force Russian Defense Cuts With regard to Russian Helicopters, for example, we are holding discussions with Mubadala Development Co. in the United Arab Emirates. They are looking seriously at the possibility of buying a share, not 49% but maybe 20% or 25%. What other of your businesses are you looking at to sell a stake? We are already ready on Russian Helicopters and Concern Radio-Electronic Technologies, known as KRET. So far, it's these two, and [small-arms manufacturer] Kalashnikov is already done. It's probably not possible for KRET to have foreign investors, no? Right, probably not. With KRET, there probably won't be foreigners, but with Russian Helicopters, yes. For KRET, already a sufficient number of our own Russian investors have turned up. Do you already have any negotiations regarding KRET? We are now drawing up the criteria and conditions for the competition. We will announce an appraisal. A company will conduct the appraisal. Then, we will announce an open auction, with conditions that our Russian investors can participate. Would you like to sell the stake by the end of the year? We would like to do it by the end of the year, if we can do so in time. Rostec had a delegation in Iran in December. We read that there could be an $8 billion deal between Russia and Iran for weaponry. So far, that is their desire, but so far there's no such deal. Discussions are under way on various subjects, but so far there's nothing concrete. Russia is giving credit to Iran, and using that credit, our business Technopromexport will build a thermoelectric power plant in Iran. Other energy companies are receiving part of the funding for the construction of grids. When it comes to weaponry, they buy that with their own money, not with ours. They need submarines and antiaircraft weapons? The list is very long. There's a lot they would like. Will they get any of it? Maybe it'll work out. First, they have to find money for all of this, because the credit we gave out was not for weapons but for various civilian projects. When will Iran received the S-300 [air-defense system]? I think we will deliver the S-300 by the end of the year. But the S-300 PMU-1 that you agreed to sell Iran isn't produced anymore, correct? Essentially, it's the last system that we will deliver, and then yes, after that it probably won't be produced anymore. So it will definitely be a PMU-1? Yes, they gave the conditions, and said they need only an S-300 PMU-1. We suggested an Antey-2500, but they said no, give us the S-300. So, OK. Why is it taking so long to deliver? You see, there are still court deliberations going on in Geneva. We agreed, they promised that they would drop their claim once we make the first delivery. The first delivery will be in September or August. We've all written about this so much , it's hard to believe it'll actually happen. It will happen. You also recently signed a deal with China to deliver 24 Su-35 fighter jets? We have signed, but it hasn't come into effect. There's a procedure on ratification. To sign is not enough, it has to be ratified by our side and the Chinese side. When will that happen? Summer or fall. It's a long period. So when will the first delivery take place? Not this year. The campaign in Syria is probably the clearest demonstration of Russian military might since the Soviet era. How much is deployment in Syria influencing your designs, strategy and plans? For example, maybe you see how the Armata tank is performing there? There's no Armata there. Firstly, we have practically no land warfare equipment there, very little. It's mostly small arms, antitank weapons. What's being used there is mostly aviation, but aviation is all Ministry of Defense. We indeed are using it as a testing ground. It's no secret. We look at how everything is working, whether it's good or bad, we make corrections or modifications. They're fighting there with weapons produced in the 1980s and the 1990s. There isn't modern weaponry there. How are sanctions affecting Rostec's businesses? Of course, to a certain degree, sanctions are affecting them negatively. We have been forced to start new production of our own. On the other hand, they have had a positive effect because we got production up and running for components that we used to buy in America or Europe. Now we are already making them ourselves and we won't have to buy them abroad ever again, if we can do them here. Or if, say, we had purchased something in the U.S. before, now we will buy it in Asian countries. That's mainly components for microelectronics. What about from Ukraine? With Ukraine the process is still under way, because there was a lot that we produced there in Ukraine. The schedule is to have it done in 2017. Are you setting up production for those parts in Russia or buying in Asia? What we haven't managed to do ourselves yet, we buy in Asia. Credit: By Paul Sonne
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772034152
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772034152?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
IEA Sees Signs Oil Prices Might Have Bottomed Out; Recent oil price recovery not definitive sign the worst is necessarily over, warns watchdog
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract:
[...]some recognition that market forces are working their magic," Bernstein Research said in a note on Friday.
Full text: DUBAI--Crude-oil prices may have "bottomed out" as Iran's return to the market has been less dramatic than the country promised, and OPEC production fell in February, the International Energy Agency said on Friday. Output is also falling faster than expected in countries outside the Organization of the Petroleum Exporting Countries, said the IEA in its closely watched monthly report, helping prices rise to more than $40 a barrel in recent days, up more than 40% from $28 a barrel earlier this year. "This should not, however, be taken as a definitive sign that the worst is necessarily over," said the IEA, which monitors energy trends for industrialized countries. "Even so, there are signs that prices might have bottomed out." Oil prices rose after the report's release . Brent crude, the global oil benchmark, rose 1.4% to $40.61 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 1.9% at $38.55 a barrel. The IEA's report comes as a number of oil-market investors have become more optimistic amid signs of life for a commodity that is down almost two-thirds from its high of $114 a barrel in 2014. Some hedge-fund managers have recently started betting on rising oil prices, or picking up the stocks or credit of battered energy companies in the belief that prices have dropped too far. The recent rally follows a period when prices fluctuated wildly, swinging as much as 10% within one day, an indicator that inexperienced traders were piling in on the belief there were deals at the bottom of the market. "It really indicates that traders are starting to anticipate the floor," said Ann-Louise Hittle, vice president of macro oils research at global oil consultancy Wood Mackenzie. The IEA said the forces that created a global glut of oil--2 million barrels are produced above demand on any given day--are showing signs of change. American production, which surged for years on the back of hydraulic fracturing of shale formations, is forecast to decline by nearly 530,000 barrels a day this year, the IEA said. OPEC, the cartel that controls a third of the world's oil, was beginning to show discipline after a period of increased production, with its output slipping 90,000 barrels a day in February. And overall production outside of OPEC also was trimmed by 90,000 barrels a day in February to 57.1 million barrels a day, and is expected to fall by 750,000 barrels a day this year, the IEA said. The IEA report cheered analysts who have been predicting OPEC's new course would force prices low enough to eliminate oil production, bring supply closer to demand and raise prices. "Finally some recognition that market forces are working their magic," Bernstein Research said in a note on Friday. Many traders and investors still doubt that the worst is over as supply is still overshooting demand and oil inventories around the globe continue filling up. Analysts have continued to slash their forecasts, with thirteen investment banks polled by The Wall Street Journal in February predicting Brent would average $39 a barrel this year, down $11 from the survey in January. Still, there are also signs the worst-case scenarios that drove oil prices so low this year may not materialize. Iran promised to flood the market with 500,000 barrels a day of new exports within months after international sanctions on its nuclear program were lifted. But in February, its output was only 3.22 million barrels a day--an increase of about 220,000 barrels a day over January. "Iran's return to the market has been less dramatic than the Iranians said it would be...provisionally, it appears that Iran's return will be gradual," the IEA said. Another factor that currently supports higher prices is a possible action by oil producers to control their production, the IEA said. In February, the energy ministers of Saudi Arabia and Russia--the world's two largest crude-oil exporters--agreed with Qatar and Venezuela to freeze their production at January levels if other producers follow suit amid mounting pressure to prop up slumping oil prices. The IEA said, however, that it is rather unlikely that an agreement will affect the supply and demand balance substantially in the first half of 2016. Iran has so far rejected freezing its output at January levels, put by OPEC secondary sources at 2.93 million barrels a day, and has repeatedly said it plans to up its output to the pre-sanctions levels. Saudi Arabia and Russia appeared to stick to their pledges. Saudi Arabia's output inched higher to 10.23 million barrels a day in February from 10.21 million barrels a month earlier, while Russia's crude and condensate production fell by 25,000 barrels a day close to 10.9 million barrels a day. Kevin Baxter, Georgi Kantchev and Miriam Malek in London contributed to this article. Write to Summer Said at summer.said@wsj.com Credit: By Summer Said
Subject: Petroleum industry; Crude oil prices; Petroleum production; Energy industry
Location: Iran
Company / organization: Name: ICE Futures; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: Markets
Publisher: Dow Jones & Com pany Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772056518
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772056518?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Rise on Hopes Glut Will Ease; International Energy Agency report suggests prices may have bottomed
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract:
Crude May Have Bottomed * U.S. Rig Count Falls to Record Low * North Dakota Production Drops for Second Month The market also was boosted by a research note from Goldman Sachs Group Inc., which has had one of the more bearish outlooks since the market collapse took hold, suggesting the "green shoots" of a rebalancing between supply and demand appeared to be in the works, and that it had increasing confidence supplies would decline this year as long as prices remain low.
Full text: U.S.-traded oil set a high for the year after an international energy monitor said the market rout of the past two years may finally have bottomed out. The Paris-based International Energy Agency said supply outages in Iraq, Nigeria and the United Arab Emirates reduced output from the Organization of the Petroleum Exporting Countries by 90,000 barrels a day, and production declined elsewhere around the world. These moves, as well as major producers discussing a coordinated output freeze, may signal what the agency termed in its monthly report a "light at the end of what has been a long, dark tunnel" for the global glut of crude that has overwhelmed oil markets. More * IEA: Crude May Have Bottomed * U.S. Rig Count Falls to Record Low * North Dakota Production Drops for Second Month The market also was boosted by a research note from Goldman Sachs Group Inc., which has had one of the more bearish outlooks since the market collapse took hold, suggesting the "green shoots" of a rebalancing between supply and demand appeared to be in the works, and that it had increasing confidence supplies would decline this year as long as prices remain low. Both reports were laden with caveats suggesting the 45% market rally in the past month was overdone and that plenty of bearish factors could send the market tumbling again. But taken together, they suggest an oil-market recovery is beginning to take hold, reinforcing the view of bullish investors who have driven the market higher on faith that such a turnaround was in the works. "It's a major turning point for the IEA to acknowledge that production is going the other way," said Phil Flynn, an account executive at Chicago brokerage Price Futures Group. "It may take years to regain that momentum." On Friday, front-month crude for April delivery rose 66 cents, or 1.7%, to $38.50 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, gained 34 cents, or 0.8%, to $40.39 a barrel on ICE Futures Europe. Both contracts are up more than 40% from lows set earlier in the year, but remain down by more than half since June 2014. For the week, Nymex crude climbed 7.2%, its fourth consecutive weekly gain, while Brent gained 4.3%, its third weekly rise. Still, the IEA's report highlighted risks to the nascent recovery. The decline in OPEC output was due to pipeline outages in Iraq and Nigeria that curtailed barrels getting to the market, not because of lower production. And some of those losses were offset by a "substantial rise" in Iranian barrels returning to the market following the lifting of international sanctions. The agency said Chinese demand has been increasing at a below-average rate, and crude inventories have continued to increase as surpluses go into storage. In the U.S., crude stockpiles last week rose to their highest level in more than 80 years, government data showed. And slowing economic activity around the world caused a sharp slowdown in demand growth in the fourth quarter to a one-year low, raising the specter of weakening demand. Existing inventories remain high, with enough oil to meet the developed world's needs for more than a month. It cautioned the recent rally may not be sustainable. "The global surplus still exists and there is still a possibility that oil prices could make new lows going forward," consulting firm Energy Management Institute said in a note. Oil prices have been supported in recent weeks on hopes that major producing countries will limit output. Saudi Arabia, Russia, Qatar and Venezuela said last month that they would be open to a production freeze at January levels if other producers were also to do so. Iran, however, has confirmed it won't join such a deal as it seeks to regain lost market share due to the sanctions. "The chances of any production cut announcements are weak and Iran looks committed to expand oil output," analysts at Australia & New Zealand Banking Group Ltd. said in a research note. Dan Strumpf contributed to this article. Write to Christian Berthelsen at christian.berthelsen@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Christian Berthelsen and Georgi Kantchev
Subject: Supply & demand; Prices; Inventory; Petroleum industry
Location: United States--US Nigeria Iraq United Arab Emirates
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: New York Mercantile Exchange; NAICS: 523210; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772057137
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772057137?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
BP to End Controversial Sponsorship of Tate Britain; Oil major's spending cuts trickle down to its arts sponsorships
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract:
[...]we have reluctantly decided not to renew our long-term partnership with Tate Britain."
Full text: LONDON--BP PLC said Friday it has cut ties with Tate Britain, citing "an extremely challenging business environment" for its decision to end its long-standing sponsorship of one of the U.K.'s leading art galleries. The British oil major is struggling to cope with a dramatic slide in oil prices that has slammed its profits, forcing chunky spending cuts and sizable lay offs. Last year, the company reported a net loss of $5.2 billion. Now those cuts are trickling down to the company's sponsorship of the arts, triggering it to end a long-term and controversial relationship with Tate Britain. The company said it is "reducing spending and taking many difficult decisions throughout BP," in a news release Friday. "As a result we have reluctantly decided not to renew our long-term partnership with Tate Britain." BP's sponsorship of Tate has been widely criticized by environmental activists who have staged a number of protests in recent years, calling on the galleries to end their relationship with the oil company. Tate Britain didn't immediately respond to requests for comment. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Victorian period; Art galleries & museums; Petroleum industry
Location: United Kingdom--UK
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772087925
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772087925?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Import Prices Fell 0.3% in February; Global economic weakness, strong dollar, cheap oil may continue to curb U.S. inflation
Author: Leubsdorf, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract:
More Economic Coverage * Net Worth of U.S. Households Rises to Record in Fourth Quarter * U.S. Budget Deficit $192.6 Billion in February * U.S. Election Turmoil Fuels Economic Uncertainty, WSJ Survey Says Broad U.S. price measures remain subdued, though the Federal Reserve, which will kick off a two-day policy meeting Tuesday, has said it expects long-sluggish inflation will move up to its 2% annual target over the next few years.
Full text: Falling import prices are continuing to offer a check on overall U.S. inflation, though there are signs the pressure from abroad may be easing. Import prices decreased 0.3% in February from the prior month after falling a revised 1% in January, the Labor Department said Friday . It was their eighth consecutive monthly decline; economists surveyed by The Wall Street Journal had expected import prices to fall 0.7% from January. Import prices were down 6.1% in February from a year earlier, the 19th straight annual decline but the smallest annual drop since December 2014. "Prospects of higher oil prices and slower dollar appreciation should help keep this improving trend intact," Wells Fargo Securities economists Sam Bullard and Sarah House said in a note to clients. The latest monthly decline partly reflected falling prices for imported fuels. The price of imported petroleum fell 4.0% from January and was down 38.5% from February 2015. Prices for non-petroleum imports decreased 0.1% in February from the prior month and were down 2.9% on the year. But excluding both fuels and food, import prices ticked up 0.1% last month from January, their first increase since May 2014. They fell 2.5% from February 2015. More Economic Coverage * Net Worth of U.S. Households Rises to Record in Fourth Quarter * U.S. Budget Deficit $192.6 Billion in February * U.S. Election Turmoil Fuels Economic Uncertainty, WSJ Survey Says Broad U.S. price measures remain subdued, though the Federal Reserve, which will kick off a two-day policy meeting Tuesday, has said it expects long-sluggish inflation will move up to its 2% annual target over the next few years. One curb on inflation has been the plunge in global oil prices since mid-2014. Another has been the dollar's rise in value against other major currencies, making imported goods cheaper for U.S. customers. There are signs of possible firming in underlying price pressures. The Fed's preferred inflation gauge, the Commerce Department's personal consumption expenditures price index, showed prices excluding food and energy rose 1.7% in January from a year earlier, up from 1.5% annual growth in December, 1.4% in November and 1.3% in October. "We may well at present be seeing the first stirrings of an increase in the inflation rate--something that we would like to happen," Fed Vice Chairman Stanley Fischer said Monday in a speech . Other policy makers, however, have signaled they want to see proof of sustained stronger price gains before raising short-term interest rates further. "We should put a high premium on clear evidence that inflation is moving toward our 2% target," Fed governor Lael Brainard said Monday . Ms. Brainard estimated the dollar's rise subtracted a half-percentage point from the core inflation rate in 2015. "Should the dollar stabilize, the downward influence on inflation should dissipate," she said. "But, as with oil prices, the movement in the value of the dollar has been more persistent than markets and many observers expected." The WSJ Dollar Index was down 0.32% on Thursday from a year earlier, the gauge's first year-over-year decline since mid-August 2014. "Past dollar strength...indicates that core import prices will remain under continued pressure in the months ahead, although the rate of decline is unlikely to accelerate unless the dollar embarks on another significant uptrend," MFR Inc. chief U.S. economist Joshua Shapiro said in a note to clients. Friday's report also showed export prices in February fell 0.4% from the prior month and were down 6.0% from a year earlier. Write to Ben Leubsdorf at ben.leubsdorf@wsj.com Credit: By Ben Leubsdorf
Subject: Inflation; Prices
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772148435
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772148435?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
North Dakota Oil Production Drops for Second Month; Reflecting sharp drop in prices, production fell to the lowest level in 18 months
Author: Dawson, Chester; Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract:
North Dakota on Friday said crude-oil production fell 2.65% in January to the lowest level in 18 months, reflecting a sharp drop in prices, as the number of drilling rigs active in the state fell to the lowest level in more than a decade.
Full text: North Dakota on Friday said crude-oil production fell 2.65% in January to the lowest level in 18 months, reflecting a sharp drop in prices, as the number of drilling rigs active in the state fell to the lowest level in more than a decade. Oil production in January, the latest data available, fell to 1.12 million barrels a day, down from 1.15 million barrels a day the previous month , according to the North Dakota Department of Mineral Resources. That was the lowest level since the 1.11 million barrels a day produced in July 2014, and a second straight month of declines. "We're losing altitude pretty rapidly," North Dakota Department of Mineral Resources Director Lynn Helms said at a news conference in Bismarck. "February and March production declines could be equal to or greater than what we've seen in December and January," he said. After remaining resilient in the face of lower crude prices for much of last year, crude output in the state's Bakken Shale formation has begun to drift down toward the million-barrel-a-day mark as operators cut the number of new wells drilled. Prices for North Dakota sweet crude fell to $21.13 a barrel in January, down from an average of $27.57 a barrel in December and $26.25 a barrel today. In February, the price fell to $18.07 a barrel, which likely depressed production for that month. There are currently 32 active drilling rigs in the state, down from 40 last month and the lowest level since November of 2005. Industry and government officials say they expect production to trend lower even if prices recover as output declines from existing wells and operators adopt a cautious approach to drilling new wells. Gerbert Schoonman, vice president of Hess Corp.'s Bakken operations, said the company is currently running two rigs and will first "have to see a pretty significant price increase" before it thinks about adding more. "When oil prices recover, we will come back and ramp up again," he said at the conference in Denver. New wells in the Baken Shale require prices for benchmark West Texas Intermediate crude above $60 for at least three months, and it can take up to 12 months to raise the capital needed to increase drilling, Mr. Helms said. "If you've been on a strict diet for a long period of time, it takes a while to put the weight back on," he told reporters. Those that are drilling new wells may not be pumping from them, instead building up an inventory of wells that they can bring on more quickly whenever oil prices do rise. Oasis Petroleum Inc. has about 80 such wells, according to Taylor Reid, the company's president and chief operating officer. "When we do get into an oil price rebound and we feel really good about that, those are the first things we can bring back on," Mr. Reid said while speaking at the DUG Rockies industry conference in Denver on Friday. "We're well positioned to make it through to the other side." In trading on the New York Mercantile Exchange on Friday, WTI crude futures for April delivery rose 2.3% to $38.71 a barrel. Despite a recent rally from 12-lows hit last month, Bakken Shale producers have little incentive to boost output below $40 a barrel. While drilling activity is expected to be kept to a minimum, wells that have been shut-in may come back online once WTI crude prices rise above $40 a barrel, and operators will start completing drilled wells at WTI prices above $50 a barrel, Mr. Helms said. The state's natural-gas production in January fell 1.96% from the prior month to 1.64 billion cubic feet a day. Most of the natural gas North Dakota produces is so-called associated gas, which is a byproduct of crude-oil production. About 13% of the gas produced in January was disposed off by burning it off, or flaring it, at the well head, down from a high of 36% in 2011. Write to Chester Dawson at chester.dawson@wsj.com and Erin Ailworth at Erin.Ailworth@wsj.com Credit: By Chester Dawson and Erin Ailworth
Subject: Petroleum industry; Drilling; Crude oil prices; Petroleum production
Location: North Dakota
Company / organization: Name: Hess Corp; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772244202
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772244202?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Key Formula for Oil Executives' Pay: Drill Baby Drill; Bonuses at many energy companies based on higher oil production, reserves; shareholders seek change
Author: Dezember, Ryan; Friedman, Nicole; Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract:
Large U.S. energy producers base as much as 75% of executives' bonuses on production and reserve growth goals, with most companies pegging between 15% and 40% of potential incentive pay to such targets, based on a Wall Street Journal analysis of proxy filings at large U.S. oil and gas companies. Anadarko Petroleum Corp. CEO R.A. Walker earned about $1.5 million because the company's output rose about 8%, or the equivalent of 23.4 million barrels of oil, from 2013 and it exceeded goals for finding new oil and gas deposits.
Full text: Markets have been waiting for U.S. energy producers to slash output during a period of depressed crude prices. But these companies have been paying their top executives to keep the oil flowing. Production and reserve growth are big components of the formulas that determine annual bonuses at many U.S. exploration and production companies. That meant energy executives took home tens of millions of dollars in bonuses for drilling in 2014, even though prices had begun to fall sharply in what would be the biggest oil bust in decades. The practice stems from Wall Street's treatment of such companies' shares as growth stocks, favoring future prospects over profitability. It has helped drive U.S. energy producers to spend more unearthing oil and gas than they make selling it, energy executives and analysts say. It has also helped fuel the drilling boom that lifted U.S. oil and natural-gas production 76% and 31%, respectively, from 2009 through 2015, pushing down prices for both commodities. "You want to know why most of the industry outspent cash flow last year trying to grow production?" William Thomas, chief executive of oil producer EOG Resources Inc. said recently at a Houston conference. "That's the way they're paid." Lately, though, some shareholders are asking companies to reduce connections between pay and production, saying such incentives don't make sense since abundant supplies have caused commodity prices to crash. Signs that oil production may finally be easing helped push up crude prices Friday to their highest levels of the year. The International Energy Agency said in a monthly report that output in some regions was falling faster than expected and that prices may have "bottomed out." A separate report said the number of rigs drilling for oil and natural gas in the U.S. fell to a record low. U.S. crude settled up 1.7% at $38.50 a barrel on the New York Mercantile Exchange. Still, CEO pay and production are likely to remain a flash point for investors because few wells are profitable even at these higher crude prices. The persistence of U.S. production in the face of such economics has been one of the biggest puzzles in the energy market. Members of the Organization of the Petroleum Exporting Countries have increased production, betting that U.S. energy producers would curtail drilling or be forced out of business. But even as oil prices began their plunge in the second half of 2014, many companies kept drilling. Related * Crude Rises on Hopes Glut Will Ease * IEA: Oil Prices May Have Bottomed Mr. Thomas and others at his Houston company derived a relatively small 8% of their bonuses from hitting production and reserve targets in 2014, the most recent period for which pay data are available. EOG put more emphasis on return on capital, relative stock price and spending. Large U.S. energy producers base as much as 75% of executives' bonuses on production and reserve growth goals, with most companies pegging between 15% and 40% of potential incentive pay to such targets, based on a Wall Street Journal analysis of proxy filings at large U.S. oil and gas companies. Payments for hitting those targets generally range from a couple of hundred thousand dollars to well over a million for individual executives, the filings show. In many cases the bonus calculations extend to employees ranking well below top executives. Hess Corp.'s CEO, John Hess, earned more than $1 million in 2014, which was more than a third of his bonus, because the company topped production and reserve targets. Anadarko Petroleum Corp. CEO R.A. Walker earned about $1.5 million because the company's output rose about 8%, or the equivalent of 23.4 million barrels of oil, from 2013 and it exceeded goals for finding new oil and gas deposits. Spokesmen for Hess and Anadarko declined to comment. Companies will detail how they calculated 2015 bonuses in proxy filings beginning this month. Recently, some big U.S. producers have throttled back production for the first time in years in response to depressed oil prices. U.S. oil output fell on a yearly basis in December for the first time since 2011. Energy pay experts also caution against entirely eliminating incentives to find new oil and gas. Companies use yet-to-be extracted oil and gas, or reserves, as collateral for bank loans. Falling oil prices can increase pressure to boost reserve volume to offset declines in value. "There is a need for reserve replacement," said Rick Davis, an oil-industry specialist at executive-search firm Stanton Chase. "You have to have that to some degree." Still Mr. Thomas's message has resonated with investors. "If more companies behaved like EOG and rewarded their CEOs based on return on capital, I think the industry would be better," said John Dowd, who manages the $1.9 billion Fidelity Select Energy Portfolio. Market Talk Moving From Growth Stocks to Earnings-Centric. US oil producers have long been viewed as growth stocks, with executives rewarded for production and reserve growth. But there are signs the bottom line is becoming more important. US E&P companies have outspent cash flow every year since 2005, Raymond James estimates, but the sector isn't expected to this year as capital and other spending slumps amid companies' cash-containment efforts. The stocks of firms like Pioneer Natural and Anadarko rose in recent weeks after announcing budget cuts even when doing so signaled slower or no production growth. "For the first time it appears the market is comfortable with companies reporting declines in production volumes," says Rob Thummel at energy-focused money manager Tortoise Capital. (nicole.friedman@wsj.com) Market Talk is a stream of real-time news and market analysis available on Dow Jones Newswires Some shareholder activists are seeking to limit bonuses tied to production and reserve growth. They say the practice can encourage CEOs to keep drilling even when prices may not justify doing so, and they have pitched proxy ballot measures at companies like Devon Energy Corp. and Chesapeake Energy Corp. Devon and Chesapeake spokesmen declined to comment. The Nathan Cummings Foundation, which manages the estate of the deceased Sara Lee Corp. founder, has asked Chesapeake to eliminate reserve growth from its pay calculations. In 2014, more than half of Chesapeake CEO Doug Lawler's $2.7 million bonus came from exceeding reserve and production targets, according to a securities filing. The Oklahoma City company's production grew by 5.5%, and it added the equivalent of 367 million barrels of oil to its proven reserves, topping a target of 300 million barrels, filings show. The Unitarian Universalist Association has sent ConocoPhillips a proposal for its proxy ballot that would require the oil company to wait up to five years before paying out bonuses tied to reserve growth to ensure the oil and gas remains worth extracting. Executives are "incented to find reserves that may never deliver value to shareholders," said Tim Brennan, the Unitarian group's finance chief. Low prices have made huge stores of oil and gas not worth the expense of extracting. North American exploration and production companies wrote down the value of their assets by about $177 billion in 2015, according to energy consultancy IHS Herold, more than triple the record set during 2008's market meltdown. ConocoPhillips, which in its 2015 proxy successfully urged shareholders to reject a proposal to eliminate pay for reserve-replacement goals, wrote down assets by $2.7 billion during the fourth quarter. A ConocoPhillips spokesman declined to comment. Still, there have been signs lately that the bottom line is becoming more important. Stocks of several big U.S. producers, including Pioneer Natural Resources Co. and Anadarko, rose after they announced budget cuts, even when doing so signaled slower or no production growth. "For the first time it appears the market is comfortable with companies reporting declines in production volumes," said Rob Thummel, a portfolio manager at Leawood, Kan., energy-focused money manager Tortoise Capital Advisors LLC. Continental Resources Inc., for example, said it would spend $920 million this year on nonacquisition capital expenditures, or about a third of what it spent in 2015. In doing so, the company said average daily output could decline about 10%. In the past, such a slowdown would have prompted a selloff. Instead, Continental's shares climbed 4% after the announcement. Continental CEO Harold Hamm said the Oklahoma City company, which based 75% of possible 2014 incentive pay on reserve and production growth, is rewriting its bonus formula to emphasize efforts to keep spending in check. "You'll see more emphasis on return on capital and efficiencies than on growth," Mr. Hamm said in an interview. "You're not getting paid for growth right now." Write to Ryan Dezember at ryan.dezember@wsj.com , Nicole Friedman at nicole.friedman@wsj.com and Erin Ailworth at Erin.Ailworth@wsj.com Credit: By Ryan Dezember, Nicole Friedman and Erin Ailworth
Subject: Oil reserves; Petroleum industry; Bonuses; Crude oil prices; Petroleum production; Energy industry; Natural gas utilities; Growth stocks
Location: United States--US
Company / organization: Name: EOG Resources Inc; NAICS: 211111, 213112; Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772265518
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772265518?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil and Natural-Gas Rig Count Falls to Record Low; Number of U.S. drilling rigs is viewed as a proxy for activity in the energy industry
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract:
The number of U.S. drilling rigs, viewed as a proxy for activity in the energy industry, has fallen sharply as oil and natural-gas prices have slumped in the past two years.
Full text: The number of rigs drilling for oil and natural gas in the U.S. fell by nine to 480 in the latest week, the lowest level on record, according to Baker Hughes Inc. data going back to late 1948. The number of U.S. drilling rigs, viewed as a proxy for activity in the energy industry, has fallen sharply as oil and natural-gas prices have slumped in the past two years. The oil-rig count fell by six to 386 in the latest week, the lowest level since 2009. The number of natural-gas rigs fell by three to 94, the lowest level since Baker Hughes began to separately count oil and natural-gas rigs in 1987. This week's total rig count surpasses the low set in 1999. Before that, the lowest level of drilling activity likely occurred in the 1860s, "the early part of the Pennsylvania oil boom," said Paul Horsnell, global head of commodities research at Standard Chartered. Rig efficiency is constantly improving, making it difficult to compare the rig count across decades. But "where they are the same is that each one reflects a decision to drill an oil well," Mr. Horsnell said. Oil prices rose to a new high for the year on Friday after the International Energy Agency said that global production fell in February and the oil-price rout may have bottomed out . U.S. crude recently rose 2.3% to $38.72 a barrel on the New York Mercantile Exchange. Natural-gas futures have also climbed in recent sessions after falling to a 17-year low earlier in the month. Nymex futures for April delivery recently rose 2.7% to $1.836 a million British thermal units. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Natural gas; Energy industry
Location: Pennsylvania United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772265560
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772265560?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon's Imperial Oil Seeks Approval for New Canadian Oil-Sands Project; Company says Midzaghe project in Alberta could eventually produce 50,000 barrels daily
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract:
Rich Kruger, Imperial's chief executive, told investors at a meeting in September that this innovation, called SA-SAGD, could double the volume of output from at least seven proposed oil sands projects, including Aspen and Midzaghe Raising production while lowering greenhouse gas emissions may help Imperial cope with new regulations and taxes designed to limit the industry's carbon footprint.
Full text: CALGARY, Alberta--Exxon Mobil Corp.'s Canadian unit said Friday it has applied for regulatory approval of an oil-sands project that could start daily production of 50,000 barrels early in the next decade. The proposed project, valued at 2 billion Canadian dollars ($1.5 billion), appears to buck a broader industry trend in which many oil-sands producers have canceled or postponed planned development of projects due to sliding crude prices and uncertainty about the impact of new environmental policies in Canada. Imperial Oil Ltd., in which Exxon owns a controlling 69.6% stake, said the new Midzaghe project would use a new technology designed to reduce greenhouse gas emissions by 25% and potentially double production levels in comparison with existing extraction methods. The company remains undecided on whether it will proceed with construction even if the government approves the project. "The filing for regulatory approval is a preliminary step and no investment decision has been made," said spokeswoman Lisa Schmidt. That decision will be based on a number of factors, including the outlook for commodity prices and how its ability to provide a return on capital compares with the potential of competing projects in the company's portfolio, she said. New oil-sands well projects typically require benchmark West Texas Intermediate crude prices to trade above $65 a barrel to break even. Current prices below $40 a barrel have made it challenging to justify investment to develop projects in Canada's oil sands. Imperial had previously said it planned to seek permission for the Midzaghe in northeastern Alberta from the provincial government in early 2016. And the company said last fall that it planned to use the promising new extraction technique at another proposed oil sands site called Aspen. A decision on construction of Aspen is expected as soon as next year, pending regulatory approval. if it moves ahead, it would be the first commercial use of the new technology, Imperial said. Pilot tests conducted by the company using a modified form of its steam-assisted gravity drainage, or SAGD, technology showed a nearly 30% increase in production of heavy crude leached out of underground oil sands wells. The new technique involves adding a chemical solvent to improve the flow of oil to the surface and reduce the need for steam made with generators fired by natural gas. Rich Kruger, Imperial's chief executive, told investors at a meeting in September that this innovation, called SA-SAGD, could double the volume of output from at least seven proposed oil sands projects, including Aspen and Midzaghe Raising production while lowering greenhouse gas emissions may help Imperial cope with new regulations and taxes designed to limit the industry's carbon footprint. The government of Alberta has raised its carbon tax on large-scale emitters and vowed to impose a 100 million metric-ton cap on such emissions from oil sands production. The industry currently emits 70 million metric tons of greenhouse gases a year and the Canadian environmental ministry has projected that emissions from oil-sands productions will hit 103 million metric tons annually as soon as 2020. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil sands; Emissions; Petroleum industry; Emission standards; Environmental policy; Natural gas; Regulatory approval
Location: Canada
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Imperial Oil Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772356260
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772356260?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Worker Killed on Offshore Oil Platform in Gulf of Mexico; Platform operated by Whistler Energy, which says it is investigating incident with federal regulators
Author: Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Mar 2016: n/a.
Abstract:
Robert Wichert, the company's chief operating officer, said the company is conducting an investigation into the incident in coordination with federal regulators, but declined to comment further.
Full text: A worker died Friday while working on an offshore oil platform in the Gulf of Mexico, federal regulators said. The platform, about 150 miles south of New Orleans in the shallow waters of the Gulf, was operated by Whistler Energy II. Robert Wichert, the company's chief operating officer, said the company is conducting an investigation into the incident in coordination with federal regulators, but declined to comment further. Whistler Chief Executive Scott Frankel said the worker who died was an employee of Nabors Industries, a drilling-rig company. A spokesman for Nabors didn't immediately respond to a request for comment. The Bureau of Safety and Environmental Enforcement said drilling operations have been suspended at the platform, but production has continued from a separate deck. The regulators said there was no pollution and no additional injuries reported. Whistler bought its two oil and gas producing blocks in the Gulf from an affiliate of Exxon Mobil Corp. and W&T Offshore Inc. in 2013. Write to Alison Sider at alison.sider@wsj.com Credit: By Alison Sider
Subject: Petroleum industry; Chief executive officers
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772356557
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772356557?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Oil-Price Decline Hits Bakken Fields
Author: Dawson, Chester; Ailworth, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Mar 2016: B.3.
Abstract:
North Dakota on Friday said crude-oil production fell 2.7% in January to the lowest level in 18 months, reflecting a sharp drop in prices, as the number of drilling rigs active in the state fell to the lowest level in more than a decade.
Full text: North Dakota on Friday said crude-oil production fell 2.7% in January to the lowest level in 18 months, reflecting a sharp drop in prices, as the number of drilling rigs active in the state fell to the lowest level in more than a decade. Daily oil production in January, the latest data available, fell to 1.12 million barrels from 1.15 million barrels the previous month, according to the North Dakota Department of Mineral Resources. That was the lowest level since the 1.11 million barrels a day produced in July 2014, and a second straight month of declines. "We're losing altitude pretty rapidly," North Dakota Department of Mineral Resources Director Lynn Helms said at a news conference in Bismarck, N.D. "February and March production declines could be equal to or greater than what we've seen in December and January," he said. After remaining resilient in the face of lower crude prices for much of last year, crude output in the state's Bakken Shale formation is drifting down toward the million-barrel-a-day mark as operators cut the number of new wells drilled. Prices for North Dakota sweet crude fell to $21.13 a barrel in January, compared with an average of $27.57 a barrel in December and the current price of $26.25. In February, the price fell to $18.07 a barrel, which likely depressed production for that month. There are currently 32 active drilling rigs in the state, down from 40 last month, marking the lowest level since November 2005. Industry and government officials say they expect production to trend lower even if prices recover as output declines from existing wells and operators adopt a cautious approach to drilling new wells. Gerbert Schoonman, vice president of Hess Corp.'s Bakken operations, said the company is currently running two rigs and will "have to see a pretty significant price increase" before it thinks about adding more. "When oil prices recover, we will come back and ramp up again," he said at an industry conference in Denver on Friday. New wells in the Bakken Shale require prices for benchmark West Texas Intermediate crude above $60 for at least three months, and it can take up to 12 months to raise the capital needed to increase drilling, Mr. Helms said. "If you've been on a strict diet for a long period of time, it takes a while to put the weight back on," he said. Those that are drilling new wells may not be pumping from them, instead building up an inventory of wells that they can bring on more quickly whenever oil prices do rise. Oasis Petroleum Inc. has about 80 such wells, according to Taylor Reid, the company's president and chief operating officer. "When we do get into an oil price rebound and we feel really good about that, those are the first things we can bring back on," Mr. Reid said at the Denver conference. "We're well positioned to make it through to the other side." In trading on the New York Mercantile Exchange on Friday, crude futures for April delivery rose 2.3% to $38.71 a barrel. Despite a recent rally from 12-month lows, Bakken Shale producers have little incentive to boost output at current prices. Wells that have been shut-in may come back online once crude prices rise above $40 a barrel, and operators will start completing drilled wells at prices above $50 a barrel, Mr. Helms said. North Dakota's natural-gas production in January fell 2% from the prior month to 1.64 billion cubic feet a day. Most of the natural gas North Dakota produces is so-called associated gas, which is a byproduct of crude-oil production. About 13% of the gas produced in January was disposed off by burning it off, or flaring it, at the well head, down from a high of 36% in 2011. Credit: By Chester Dawson and Erin Ailworth
Subject: Drilling; Petroleum production; Petroleum industry; Crude oil prices
Location: North Dakota
Company / organization: Name: Hess Corp; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publicationyear: 2016
Publication date: Mar 12, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772417036
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772417036?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks Gain For Fourth Week in Row --- Upbeat economic readings, higher oil prices help calm investors worried about a recession
Author: Josephs, Leslie; Gold, Riva
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Mar 2016: B.1.
Abstract:
Federal-funds futures, used by investors and traders to place bets on central-bank policy, on Friday indicated a 47% likelihood of a rate increase from the Fed at its June policy meeting, according to data from CME Group.
Full text: A broad rally led by energy and financial shares on Friday carried U.S. indexes to their fourth consecutive week of gains, their longest winning streak in more than four months, as investors took heart in signs of improvement in the U.S. economy. Friday's rally nearly erased the Dow industrials' losses for the year, as upbeat U.S. economic readings over the past month have helped soothe investors' concerns that the country could be headed toward a recession. Worries about the global oil glut have eased, driving up prices of crude and boosting shares of energy companies, which have been one of the market's trouble spots. The European Central Bank's announcement Thursday of further stimulus and support for banks also calmed investors, analysts said. The gains are "an acknowledgment that the past recessionary fears were somewhat overstated," said Joe Davis, chief economist at Vanguard Group. On Friday, the Dow Jones Industrial Average rose 218.18 points, or 1.3%, to 17213.31, while the S&P 500 added 32.62 points, or 1.6%, to 2022.19, the highest close since Dec. 31 for both indexes. The Nasdaq Composite gained 86.31, or 1.9%, to 4748.47. Trading was light, however, with volumes the sixth lowest of the year. The gains narrowed the Dow's losses so far this year to 1.2% and the S&P 500's to 1.1%. The indexes in February were down as much as 10% from the start of the year. "Another day like today and we're flat on the year. It's pretty staggering," said Rob Bernstone, managing director in equity trading at Credit Suisse. "Credit is back in vogue. Stocks are back in vogue. Oil's back in vogue." Chevron was the Dow's biggest weekly gainer, adding 64 cents, or 0.7%, Friday to $94.58, for a 7.6% gain in the week. McDonald's rose 1.57, or 1.3%, to 121.55 Friday, for a 3.7% weekly gain. The iShares iBoxx High Yield Corporate Bond ETF rose 1.2% to cap a fourth week of gains, its longest winning streak since February 2015. Investors on Friday sold assets often associated with safety, such as gold and U.S. government debt. Gold futures fell 1% to $1,258.70 an ounce. The yield on the benchmark 10-year Treasury note rose to 1.977%, from 1.927% on Thursday, as prices fell. An index of energy companies in the S&P 500 gained 2.2% as U.S. oil futures rose to a more than three-month high. Investors now are looking to comments from the Federal Reserve in the coming week for its read on the economy. While the Fed is widely expected to hold off on interest-rate increases at its meeting on March 15 and 16, the stronger U.S. data recently has kept a move later in the year on the table. Federal-funds futures, used by investors and traders to place bets on central-bank policy, on Friday indicated a 47% likelihood of a rate increase from the Fed at its June policy meeting, according to data from CME Group. The odds for a rate increase at the December meeting were 77% recently. Earlier in February, the odds for both meetings were zero. "Investors are starting to position for a hawkish Fed," said Anthony Cronin, a Treasury bond trader at Societe Generale SA. "Yields can still go higher if the Fed signals it may raise rates two or three times this year." The financial sector led the S&P 500 on Friday, rising 2.7%. Higher interest rates help banks because they increase the spread between what banks charge on loans and what they pay for deposits and other funds. Shares in Europe also rallied a day after the European Central Bank unveiled a new batch of stimulus measures. The Stoxx Europe 600 rose 2.6%. The ECB on Thursday announced cheaper funding for the sector through new long-term loans. "The ECB has created a framework within which banks can rebuild profitability," said Stephen Macklow-Smith, head of European equities strategy at J.P. Morgan Asset Management. The new measures make funds available to banks at attractive rates, he said. The euro fell 0.3% against the dollar Friday to $1.1151. On Thursday, stocks initially had gained as the euro fell sharply against the dollar after the ECB outlined a broad package of easing measures, including a cut to key interest rates and an expansion of its asset-purchase program. But those markets quickly reversed, after ECB President Mario Draghi said the central bank didn't "anticipate that it will be necessary to reduce rates further." Lower interest rates tend to weaken the euro and boost stocks. While the ECB's easing measures broadly exceeded investors' expectations, the market's mixed reaction underscores doubts among investors about how much further central banks can go to lift inflation in the face of slowing global growth. Credit: By Leslie Josephs and Riva Gold
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Mar 12, 2016
column: Friday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772681612
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772681612?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Rises To Highest In Over 3 Months
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Mar 2016: B.5.
Abstract:
The Paris-based International Energy Agency said supply outages in Iraq, Nigeria and the United Arab Emirates reduced output from the Organization of the Petroleum Exporting Countries by 90,000 barrels a day, and production declined elsewhere around the world.
Full text: U.S.-traded oil set a high for the year after an international energy monitor said the market rout of the past two years may finally have bottomed out. The Paris-based International Energy Agency said supply outages in Iraq, Nigeria and the United Arab Emirates reduced output from the Organization of the Petroleum Exporting Countries by 90,000 barrels a day, and production declined elsewhere around the world. These moves, as well as major producers discussing a coordinated output freeze, may signal what the agency termed in its monthly report a "light at the end of what has been a long, dark tunnel" for the global glut of crude that has overwhelmed oil markets. The market also was boosted by a research note from Goldman Sachs Group Inc., which has had one of the more bearish outlooks since the market collapse took hold, suggesting the "green shoots" of a rebalancing between supply and demand appeared to be in the works, and that it had increasing confidence supplies would decline this year as long as prices remain low. Both reports were laden with caveats suggesting the 45% market rally in the past month was overdone and that plenty of bearish factors could send the market tumbling again. But taken together, they suggest an oil-market recovery is beginning to take hold. "It's a major turning point for the IEA to acknowledge that production is going the other way," said Phil Flynn, an account executive at Chicago brokerage Price Futures Group. On Friday, front-month crude for April delivery rose 66 cents, or 1.7%, to $38.50 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, gained 34 cents, or 0.8%, to $40.39 a barrel on ICE Futures Europe. Both contracts are up more than 40% from lows set earlier in the year. Still, the IEA's report highlighted risks to the nascent recovery. The decline in OPEC output was due to pipeline outages in Iraq and Nigeria that curtailed barrels getting to the market, not because of lower production. And some of those losses were offset by a "substantial rise" in Iranian barrels returning to the market following the lifting of international sanctions. The agency said Chinese demand has been increasing at a below-average rate, and crude inventories have continued to increase as surpluses go into storage. In the U.S., crude stockpiles last week rose to their highest level in more than 80 years, government data showed. And slowing economic activity around the world caused a sharp slowdown in demand growth in the fourth quarter to a one-year low, raising the specter of weakening demand. --- Dan Strumpf contributed to this article. Credit: By Christian Berthelsen and Georgi Kantchev
Subject: Crude oil; Commodity prices
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2016
Publication date: Mar 12, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772776836
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772776836?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Why U.S. Oil CEOs Keep On Drilling
Author: Dezember, Ryan; Friedman, Nicole; Ailworth, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Mar 2016: B.1.
Abstract:
Large U.S. energy producers base as much as 75% of executives' bonuses on production and reserve growth goals, with most companies pegging between 15% and 40% of potential incentive pay to such targets, based on a Wall Street Journal analysis of proxy filings at large U.S. oil-and-gas companies. Anadarko Petroleum Corp. CEO R.A. Walker earned about $1.5 million because the company's output rose about 8%, or the equivalent of 23.4 million barrels of oil, from 2013 and it exceeded goals for finding new oil and gas deposits.
Full text: Markets have been waiting for U.S. energy producers to cut output during a period of depressed crude prices. But these companies have been paying their top executives to keep the oil flowing. Production and reserve growth are big components of the formulas that determine annual bonuses at many U.S. exploration-and-production companies. That meant energy executives took home tens of millions of dollars in bonuses for drilling in 2014, even though prices had begun to fall sharply in what would be the biggest oil bust in decades. The practice stems from Wall Street's treatment of such companies' shares as growth stocks, favoring future prospects over profitability. It has helped drive U.S. energy producers to spend more unearthing oil and gas than they make selling it, energy executives and analysts say. It also has helped fuel the drilling boom that lifted U.S. oil and natural-gas production 76% and 31%, respectively, from 2009 through 2015, pushing down prices for both commodities. "You want to know why most of the industry outspent cash flow last year trying to grow production?" William Thomas, chief executive of oil producer EOG Resources Inc., said recently at a Houston conference. "That's the way they're paid." Lately, though, some shareholders are asking companies to reduce connections between pay and production. Signs that oil production may finally be easing helped push up crude prices Friday to their highest levels of the year. Still, few wells are profitable even at current prices. The persistence of U.S. production in the face of such economics has been one of the biggest puzzles in the energy market. Members of the Organization of the Petroleum Exporting Countries have increased production, betting that U.S. energy producers would curtail drilling or be forced out of business. But even as oil prices began their plunge in 2014, many companies kept drilling. Mr. Thomas and others at his Houston company derived a relatively small 8% of their bonuses from hitting production and reserve targets in 2014, the most recent period for which pay data are available. EOG put more emphasis on return on capital, relative stock price and spending. Large U.S. energy producers base as much as 75% of executives' bonuses on production and reserve growth goals, with most companies pegging between 15% and 40% of potential incentive pay to such targets, based on a Wall Street Journal analysis of proxy filings at large U.S. oil-and-gas companies. Payments for hitting those targets generally range from a couple of hundred thousand dollars to well over a million for individual executives, the filings show. Hess Corp.'s CEO, John Hess, earned more than $1 million in 2014 because the company topped production and reserve targets. Anadarko Petroleum Corp. CEO R.A. Walker earned about $1.5 million because the company's output rose about 8%, or the equivalent of 23.4 million barrels of oil, from 2013 and it exceeded goals for finding new oil and gas deposits. Spokesmen for Hess and Anadarko declined to comment. Energy pay experts caution against eliminating incentives to find new oil and gas. Companies use yet-to-be extracted oil and gas, or reserves, as collateral for bank loans. Still Mr. Thomas's message has resonated with investors. "If more companies behaved like EOG and rewarded their CEOs based on return on capital, I think the industry would be better," said John Dowd, who manages the $1.9 billion Fidelity Select Energy Portfolio. Some shareholder activists are seeking to limit bonuses tied to production and reserve growth. They say the practice can encourage CEOs to keep drilling even when prices may not justify doing so, and they have pitched proxy ballot measures at companies like Devon Energy Corp. and Chesapeake Energy Corp. Devon and Chesapeake spokesmen declined to comment. The Nathan Cummings Foundation, which manages the estate of the deceased Sara Lee Corp. founder, has asked Chesapeake to eliminate reserve growth from its pay calculations. In 2014, more than half of Chesapeake CEO Doug Lawler's $2.7 million bonus came from exceeding reserve and production targets, according to a securities filing. The Oklahoma City company's production grew by 5.5%, and it added the equivalent of 367 million barrels of oil to its proven reserves, topping a target of 300 million barrels, filings show. The Unitarian Universalist Association has sent ConocoPhillips a proposal for its proxy ballot that would require the oil company to wait up to five years before paying out bonuses tied to reserve growth to ensure the oil and gas remains worth extracting. Executives are "incented to find reserves that may never deliver value to shareholders," said Tim Brennan, the Unitarian group's finance chief. Still, there have been signs lately that the bottom line is becoming more important. Stocks of several big U.S. producers, including Pioneer Natural Resources Co. and Anadarko, rose after they announced budget cuts, even when doing so signaled slower or no production growth. Continental Resources Inc. said it would spend $920 million this year on nonacquisition capital expenditures, or about a third of what it spent in 2015. Continental CEO Harold Hamm said the Oklahoma City company, which based 75% of possible 2014 incentive pay on reserve and production growth, is rewriting its bonus formula to emphasize efforts to keep spending in check. "You'll see more emphasis on return on capital and efficiencies than on growth," Mr. Hamm said in an interview. "You're not getting paid for growth right now." Credit: By Ryan Dezember, Nicole Friedman and Erin Ailworth
Subject: Drilling; Crude oil; Petroleum industry
Location: United States--US
Company / organization: Name: Anadarko Petroleum Corp; NAICS: 211111; Name: EOG Resources Inc; NAICS: 211111, 213112; Name: Hess Corp; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Mar 12, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772776973
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772776973?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Eni Starts Pumping Oil From World's Northernmost Offshore Platform; Italian company needs oil at more than $100 a barrel to break even at Arctic Goliat field, say analysts
Author: Zampano, Giada
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Mar 2016: n/a.
Abstract:
ROME--After long delays and cost overruns , Italian oil company Eni SpA has started to pump oil from the world's most northern offshore platform, Goliat, which is located in the Arctic about 50 miles from Norway's northern coast.
Full text: ROME--After long delays and cost overruns , Italian oil company Eni SpA has started to pump oil from the world's most northern offshore platform, Goliat, which is located in the Arctic about 50 miles from Norway's northern coast. A spokesman for Eni said Sunday that the company started pumping oil on Saturday night, after receiving the final go-ahead from the Norwegian government. Eni's plans to begin pumping from Goliat were already two years behind schedule and well over budget when they hit another snag last December, as Norwegian regulators requested more information about safety and other issues before giving the green light . The Italian oil and natural-gas company has invested about $6 billion in Goliat so far. With the continued fall in oil prices denting its margins, Eni is likely to struggle to make Goliat economically viable. Several analysts have put the break-even point for the platform at more than $100 a barrel. A spokesman for Eni said Sunday that the company expects the break-even point to be just below $50 a barrel. Eni said in a written statement Sunday that Goliat, the first oil field to start production in the Barents Sea, is estimated to contain reserves totaling roughly 180 million barrels of oil. Its daily output is expected to reach 100,000 barrels. The Italian oil company holds a 65% stake in Goliat. Norway's national oil company, Statoil ASA, controls the rest. Goliat's production will take place through a subsea system consisting of 22 wells, of which 17 are already completed. Eni stressed on Sunday that the field uses the most advanced technology aimed at minimizing the impact on the environment. It receives power from the shore by means of subsea power cables that reduce carbon-dioxide emissions by 50% compared with alternative methods, while water and gas products are re-injected into the reservoir, Eni said. "Goliat's startup is an important milestone for Eni's growth strategy and will significantly contribute to the cash flow generation," the Italian company said. At the end of February, Eni promised more cost cuts after the recent plunge in global crude prices that tripled its fourth-quarter net loss. Write to Giada Zampano at giada.zampano@wsj.com Credit: By Giada Zampano
Subject: Petroleum industry; Acquisitions & mergers
Location: Arctic region Norway
Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: Statoil ASA; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 13, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: En glish
Document type: News
ProQuest document ID: 1772541854
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772541854?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Sabine Oil & Gas May Reject Pipeline Contracts; Federal bankruptcy judge says Sabine ruling isn't binding, encourages settlement
Author: Sider, Alison; Corrigan, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Mar 2016: n/a.
Abstract:
Oil and gas producers, which have been battered by persistently low oil and natural gas prices, have been hoping for a signal they might be able to escape pipeline transport fees and minimum shipping volumes they agreed to when times were good. Since output has fallen, some producers are stuck paying for space on pipelines that they aren't using.
Full text: A judge ruled that a bankrupt oil-and-gas producer could shed expensive contracts it made with pipeline companies when energy was booming, rejecting pipeline firms' claim that even bankruptcies couldn't break the lucrative agreements apart. Sabine Oil & Gas Corp., which filed for bankruptcy protection in July, had asked a New York bankruptcy court to let it out of pipeline agreements with Nordheim Eagle Ford Gathering LLC, an affiliate of Cheniere Energy Inc. Under such deals, oil-and-gas producers agree to ship certain volumes of oil or gas every year at set fees, and have to make deficiency payments if they miss their targets. Sabine argued it was no longer shipping enough fuel to meet its minimum commitments under the deals and would have to pay Nordheim $35 million over the life of the contract to make up the difference, making the pacts so expensive it would be better off striking a new agreement with another company. Sabine also asked to get out of similar agreements with a second pipeline operator--an affiliate of High Point Infrastructure Partners LLC--arguing that it would save as much as $80 million and avoid sinking money into unprofitable wells the company would be required to drill under the agreement. Judge Shelley Chapman of the U.S. Bankruptcy Court in Manhattan agreed to let Sabine out of the deals over the objections of the pipeline companies, but said procedural reasons prevented her from issuing a binding decision, potentially setting the stage for another legal battle over the pipeline operators' argument that the agreements can't be broken because they are inextricably tied to the land on which Sabine operates. Sabine and Cheniere didn't respond to requests for comment. The ruling may be helpful to Delaware bankruptcy judges with similar disputes before them, but they aren't bound by it. Pipelines and producers will also likely resolve many disputes without going to court. Companies like Plains All American Pipeline LP have said producers are already asking for breaks on fees and volume commitments, and some experts said the ruling could set a new tone for those discussions. The closely watched case is likely to upend the once symbiotic relationship between companies that pump fuel and those that spent billions to lay thousands of miles of pipelines to move it. Oil and gas producers, which have been battered by persistently low oil and natural gas prices, have been hoping for a signal they might be able to escape pipeline transport fees and minimum shipping volumes they agreed to when times were good. Since output has fallen, some producers are stuck paying for space on pipelines that they aren't using. Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, said he expects more challenges to contracts between producers and pipeline companies. "One could see this ruling as something favorable for producers, but it's something that's going to play out further in the courts," he said. If more judges side with producers, it could pose a serious threat to dozens of pipeline companies that count on a steady stream of fees and pay out most of their cash flow to investors. The Alerian MLP index, which includes major pipeline companies, fell 6.1% Tuesday. "There is a concern in the community about whether this is going to shake up the reliable income everybody was kind of depending on," said Mary Lyman, president of the Master Limited Partnership Association, a trade group that represents many pipeline operators. Lawyers and analysts cautioned that Tuesday's decision won't necessarily affect companies with contracts structured differently, or in states with different laws. Alan Armstrong, the chief executive of pipeline company Williams Cos., sought to assure investors and analysts last month that contracts would survive customer bankruptcies. "We believe gathering contracts such as ours are not the type of contract that would be rejected," he said. Williams shares sold off sharply last month when rumors swirled that Chesapeake Energy Corp., a major shipper, might go bankrupt, potentially threatening its pipeline revenue and its credit rating. The panic spread to Energy Transfer Equity LP, which is buying Williams in a $33 billion deal. Williams has said Chesapeake is still paying its bills and that it remains open to renegotiating contract terms with its customer. Chesapeake issued a statement last month saying it had no plans to pursue a bankruptcy. Pipeline companies have argued that many of their agreements with producers are ironclad because many are set up more like real-estate interests in the oil and gas fields, not just a promise of payment, creating a link to the land that sticks even if the acreage is sold to a new owner. But as more struggling producers slide into bankruptcy, experts say contentious disputes will continue to emerge. After Quicksilver Resources filed for bankruptcy last year, its oil-and-gas fields were sold. The winner, BlueStone Natural Resources II LLC, agreed to pay $245 million in cash, with one condition: the rejection of contracts with pipeline company Crestwood Equity Partners LP. Crestwood Chief Executive Robert Phillips has said the company believes its agreements are bankruptcy-proof. Crestwood bought Quicksilver's north Texas natural-gas pipeline system in 2010. Last week, Crestwood's lawyers said the company wouldn't have paid more than $700 million in 2010 if it had not expected the contracts would stick with the land. But BlueStone said in a court filing that it didn't want to be saddled with obligations to Crestwood, arguing that the fees are "significantly above the market rate" in Texas' Barnett shale region. "BlueStone has other options instead of paying Crestwood an exorbitant gathering fee," the company wrote in a court filing. If a judge doesn't agree, BlueStone will walk away, and Quicksilver's creditors will have to turn to a significantly lower second-place offer: $93 million in cash from BSG LLC. Jacqueline Palank contributed to this article. Write to Alison Sider at alison.sider@wsj.com and Tom Corrigan at tom.corrigan@wsj.com Corrections & Amplifications A bankruptcy judge said she couldn't issue a binding ruling on Sabine Oil & Gas's request to exit pipeline agreements because of procedural reasons. An earlier version of this article incorrectly said it was because of a lack of clarity in Texas law. (March 13, 2016) Credit: By Alison Sider and Tom Corrigan
Subject: Pipelines; Bankruptcy; Petroleum industry; Fees & charges; Federal courts; Judges & magistrates; Natural gas prices
Company / organization: Name: Sabine Oil & Gas Corp; NAICS: 211111, 211112; Name: Bankruptcy Court-US; NAICS: 922110; Name: Plains All American Pipeline LP; NAICS: 486110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 13, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772607455
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772607455?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Making Miami's Master Suburb; George Merrick's grandfather had made his money with Fink's Magic Oil. It is a natural progression from snake oil to Florida real estate.
Author: Ferguson, Stuart
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Mar 2016: n/a.
Abstract:
Merrick is the subject of an illuminating biography by Arva Moore Parks, a historian who has long been involved in the region's historic-preservation efforts and who is well-suited to the task of bringing Merrick's accomplishments to a wider audience. Merrick's formal education included a stint in New York, which had exposed him to Forest Hills Gardens, a planned community in which a single vision aimed to unify the design of landscape and buildings.
Full text: What is the difference, during a Florida land boom, between a sinkhole and a glittering lagoon in the shadow of Venetian towers? Vision, primarily, and money--and advertising. A 1924 pamphlet from southern Florida describes a magical place with not only Venetian towers and a lagoon but also country-club dances and wafting music and "moons, huge, glowing tropic moons" that turn "the night to witchery." All of this for a stretch of land that had been, not long before, rattlesnake-infested scrub. The puffery was composed by Marjory Stoneman Douglas, better known as an environmentalist who later helped save the Everglades. The man who commissioned her florid prose was George Merrick (1886-1942), the founder, owner and planner of Coral Gables, Miami's then-new "master suburb." Merrick is the subject of an illuminating biography by Arva Moore Parks, a historian who has long been involved in the region's historic-preservation efforts and who is well-suited to the task of bringing Merrick's accomplishments to a wider audience. As designed in the early 1920s, Coral Gables featured a magnificent country club; a Biltmore hotel crowned by a replica of Seville's Giralda Tower; and a "Venetian" casino. Along its suburban streets were Mediterranean-inspired houses with deep fireplaces, sleeping porches and aged roof tiles plundered from Havana. Windows were shaded by striped awnings in warm henna, sage green and other approved colors. Newly dug canals connected the city to Biscayne Bay, and residents could get there via a gondola manned by native Venetians. The waterfront, called Tahiti Beach, was fitted out in a South Seas mode, though its huts had been thatched by local Seminole Indians. Miami newspaper publisher Cornelius Vanderbilt Jr. loved Coral Gables and trumpeted its charms. People came, bought lots and houses, and stayed. Ms. Parks reports that the Coral Gables Corp.--Merrick's company--took in between $100 million and $150 million from the city's founding in 1921 through its zenith in 1925 and on into the early years of the Depression. Alas, it was all too good to last. In 1930, the city defaulted on its bonds. Called before the Securities and Exchange Commission to explain the default, Merrick said that the corporation's cash had been used to fund "development that benefitted the city" instead of "creating huge profits." He told the SEC: "I consider Coral Gables my town. I founded it, I was trying to do the best for everyone in it." He had been whipsawed by the Depression, by a disastrous hurricane (in 1926) and by too much property being bought with giant mortgages at a time of precipitous deflation. The city is alive and well today, of course, having recovered in the postwar years, but its original mission as a planned community promising elegance and luxury gave way to the normal growth patterns of suburban America. Where did such a vision come from? Providing the back story, Ms. Parks tells us that Merrick moved to south Florida from Massachusetts with his family in 1899, when he was 13. With the help of local Bahamians, the Merricks turned a bedraggled homestead west of Coconut Grove into the Coral Gables Plantation--more than 1,000 acres of grapefruit and guava trees. By 1920 the plantation was the largest fruit-and-vegetable farm in south Florida. George climbed the trees and shook the guavas down and sweated with the work crews. He loved the climate and the people and eventually grasped the possibilities of Florida's then-emerging Riviera. Merrick's formal education included a stint in New York, which had exposed him to Forest Hills Gardens, a planned community in which a single vision aimed to unify the design of landscape and buildings. He had come to admire as well the aesthetic principles of the City Beautiful movement. When his father died in 1911, George took control of the Coral Gables Plantation. With more land from his new wife's family, he determined on a grand project. Merrick's maternal relatives, Ms. Parks tells us, were painters and architects who provided the first renderings for the residential and public features of the city of Coral Gables. Insisting on a harmonious marriage of streets, parks and buildings, Merrick also hired landscape architect Frank M. Button (who had helped design Chicago's Lincoln Park) and color expert Phineas Paist (who had worked on Miami's splendid Villa Vizcaya). Merrick himself approved or rejected every architectural drawing, every house plan. In the 1920s and 1930s, other suburbs were coalescing near Miami, but none of them, Ms. Parks says, "were planned communities on the scale of Coral Gables." What made the project possible was not only Merrick's artistic ideals but his marketing genius. His maternal grandfather, Henry Fink, had made his money with Fink's Magic Oil, an elixir (70% alcohol) that claimed to alleviate all sorts of ailments. It is a natural progression from snake oil to Florida real estate. Merrick did a whiz-bang job of drawing attention to his new development. A promotional campaign included Mabel Cody's Flying Circus performing the "whirl of death" above the future city. William Jennings Bryan was on the payroll. After Florida's real-estate bubble burst and the city defaulted, Merrick was forced into personal bankruptcy. He even lost his home in Coral Gables. Still, his go-getter energy had not left him. He became postmaster of Miami in 1940, registering resident immigrants in the run-up to the war and, after Pearl Harbor, overseeing the sale of war bonds, with no threat of default this time. He died in 1942 of a heart ailment, at age 55. The Miami postal carriers, in their trade publication, lamented "not the dreaming poet, not the builder of a beautiful city" but the man they knew, who had risen up again after tasting "the bitter cup of unhappiness and disappointment." Mr. Ferguson, who works in the research department of the Cramer-Krasselt advertising agency in Chicago, is one of the Florida Historical Society's Rossetter scholars. Credit: By Stuart Ferguson
Subject: Landscape architecture
Location: Florida
People: Vanderbilt, Cornelius (Commodore) (1794-1877) Douglas, Marjory Stoneman
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 13, 2016
Section: Arts
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772614877
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772614877?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil-Price Rise Could Be Its Own Undoing; Higher crude-oil prices could encourage shale producers to ramp up output again
Author: Friedman, Nicole; Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract:
Chevron Corp. could drill 4,000 wells in the Permian basin in Texas that would make money at prices below $50 a barrel, and some of those would make money below $30, Chief Executive John Watson told analysts last week. Cushing, Okla., a key storage hub and the delivery point for Nymex crude futures, is holding 66.9 million barrels of oil, 92% of its estimated working capacity as of September, according to EIA data.
Full text: The slide in oil prices has paused after crude fell more than 70% from its 2014 peak. Now the question is whether the recent rise itself could spark another downward spiral. U.S. oil prices are up more than 45% from a 13-year low in February, boosted by talks among Saudi Arabia, Russia and other major producers about capping their output. A temporary reduction in global crude supply following outages in Nigeria and Iraq also helped buoy the market. On Friday, the International Energy Agency said that oil prices may have bottomed out, and it forecast U.S. output to decline by nearly 530,000 barrels a day this year. The report seemed to support the market's increasingly bullish mood, pushing U.S. oil prices up 1.7% to $38.50 a barrel. But this rally could lead to its own demise, many analysts warn. Higher prices will likely encourage shale producers to ramp up output again, muddying any forecasts for shrinking U.S. supply. Shale wells can be drilled and fracked within a matter of months, compared with the years it can take to complete other types of oil wells. "My concern is if the market surges right back to $50 a barrel...we just end up with another problem six months from now," said Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc. "You'd be taking a lot of risk entering this market early," he said, because a rally could be self-defeating. Stored supplies of crude oil and refined products need to fall from current elevated levels before any sustained rally can take place, Goldman said in a note on Friday. Oil's sharp rise has been part of a broader commodities rally that has lifted everything from gold and copper to cocoa and lean hogs. But as with oil, many investors say they are still looking for more evidence of a fundamental rise in demand for commodities or a significant drop in production to justify further price increases. "We have moved too much on too little data," said George Zivic, portfolio manager of the $250 million Oppenheimer Commodity Strategy Total Return Fund, who said he closed out positions in copper, aluminum and zinc last week. Commodity rallies, from copper to cotton, often face this dilemma: Will a sudden surge in prices lead producers to crank up output and oversupply the market? Last spring's rebound in crude prices shows how this can happen. Crude prices rose 40% between mid-March and early May last year to as high as $60.75 a barrel after falling to as low as $43.46. Investors piled in on expectations that the plunge in prices would spur a quick decline in U.S. oil output. Retail investors tried to benefit from oil's anticipated rebound through exchange-traded funds designed to track oil futures, as analysts called for prices to return to $70 a barrel by 2016. But higher prices also allowed producers to lock in prices for future years and invest in new output. The number of rigs drilling for oil started rising again over the summer as companies rushed to turn on the taps and generate new cash flow. Some producers told investors that because of cost savings, they could afford to bring new wells online with prices above $60 a barrel. By August, oil had fallen to new lows. Cost reductions now allow companies to increase production at even lower prices. Chevron Corp. could drill 4,000 wells in the Permian basin in Texas that would make money at prices below $50 a barrel, and some of those would make money below $30, Chief Executive John Watson told analysts last week. Chevron has 16 rigs in the region drilling wells that will come online in six to 12 months. "We think that those wells that are being drilled will be economic at the kinds of low prices that we're seeing today," he said. The oil surplus may be easing compared with a year ago. U.S. production fell on a yearly basis in December for the first time since 2011, according to the Energy Information Administration. Global production dropped 0.7% in the first two months of this year, the International Energy Agency said on Friday. But Iranian production is expected to rise this year by several hundred thousand barrels a day, analysts say, as international sanctions are lifted. U.S. crude inventories are at their highest level in more than 80 years. Cushing, Okla., a key storage hub and the delivery point for Nymex crude futures, is holding 66.9 million barrels of oil, 92% of its estimated working capacity as of September, according to EIA data. Traders "want to see the inventory worked down," said Joseph Quinlan, head of market and thematic research at Bank of America Global Wealth and Investment Management, which manages $380 billion. Write to Nicole Friedman at nicole.friedman@wsj.com and Ira Iosebashvili at ira.iosebashvili@wsj.com Credit: By Nicole Friedman and Ira Iosebashvili
Subject: Petroleum industry; Commodities; Cost control; Copper; Crude oil prices
Location: Russia Iraq United States--US Nigeria Saudi Arabia
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772625673
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772625673?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Futures Pause in Asia Following Brisk Rally; May Brent crude on London's ICE Futures exchange added six cents to $40.45 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract:
In a report on Friday, the Paris-based IEA said the Organization of the Petroleum Exporting Countries had reduced output by 90,000 barrels a day due to supply outages in Iraq, Nigeria and the United Arab Emirates.
Full text: Oil futures paused in early Asia trading Monday, near their highs of the year following a report from the International Energy Agency that said prices had bottomed. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April slipped nine cents to $38.41 a barrel in the Globex electronic session. May Brent crude on London's ICE Futures exchange added six cents to $40.45 a barrel. "We're not really running away in either direction at this moment," said Stuart Ive, an adviser at brokerage OM Financial Ltd. in New Zealand. "The market its relatively well supplied by flows and funds." The moves comes on the heels of a brisk rally in oil markets, as benchmark Brent crude prices rallied 45% from their low of the year under $28 a barrel in late January. The gains have been fueled by supply reductions around the world and the prospect of a coordinated supply freeze by major oil-exporting countries. In a report on Friday, the Paris-based IEA said the Organization of the Petroleum Exporting Countries had reduced output by 90,000 barrels a day due to supply outages in Iraq, Nigeria and the United Arab Emirates. Saudi Arabia, Russia, Qatar and Venezuela said last month they would be open to a supply freeze at January levels, though Iran has balked at such a deal. Over the weekend, Iran's oil minister said the country wouldn't join a production freeze until its own output rose to 4 million barrels a day, according to published reports. Some analysts say oil prices may have found a new equilibrium after their recent rally. U.S.-traded crude is likely to be capped in the "low-to-mid 40s," according to analysts at Morgan Stanley. The bank said funds are closing out their short bets, putting upward pressure on prices at current levels, while oil producers are laying down fresh hedges, pushing prices lower. "When we put it all together, it suggests WTI will struggle to break $45 in the front," the analysts wrote in a note to clients. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--rose 65 points to $1.4508 a gallon, while April diesel traded at $1.2167, 13 points lower. ICE gasoil for April changed hands at $364.50 a metric ton, down $2.50 from Friday's settlement. Credit: By Dan Strumpf
Subject: Petroleum industry; Crude oil prices; Crude oil; Price increases
Location: Iran Asia New Zealand
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772635525
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772635525?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Rout Crimps Sector's Presence on U.K.'s FTSE 100; Slide in crude prices has left just two oil companies on Britain's flagship index
Author: Williams, Selina; Eisen, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract: None available.
Full text: LONDON--Not long ago, the oil sector was a powerhouse in the British blue-chip index. Nearly 24% of the total market value represented in the FTSE 100 in 2009 comprised oil drillers or oil-service companies. In 2016, the percentage is down to 12%. Only two oil companies are in the FTSE 100--BP PLC and Royal Dutch Shell PLC--down from eight in 2012, when it was the biggest sector on the index. Energy stocks have never reached quite the same heights in big U.S. stock indexes, but a similar pattern has emerged in the S&P 500. Late last week, energy companies totaled $1.19 trillion, or 6.8%, of the $17.43 trillion index, compared with 11% at a recent peak in June 2014, according to S&P Dow Jones Indices. The oil companies' declining share of big indexes comes as crude prices have fallen more than 60% from a peak of $115 a barrel in mid-2014 amid a supply glut due to a U.S. oil boom and roaring production in the Organization of the Petroleum Exporting Countries. The price slump has slammed oil companies' revenue on both sides of the Atlantic, with more than 300,000 jobs lost globally in the energy sector. Related * Shale Producers Can't Ramp Up Oil Output * Shorting Oil to Hedge Credit Chevron Corp. failed to turn a quarterly profit in the last three months of 2015, the first time that has happened in any quarter since 2002, while Anglo-Dutch giant Shell posted its worst earnings in a decade last year. The turmoil has been a particular blow for the U.K. economy and energy investors there. Since June 2014, London-listed oil companies and service companies in the FTSE's oil-and-gas index have lost around one-third of their value. Vanquished from the ranks of blue chips are British oil explorers such as Tullow Oil PLC and the companies that provide the equipment and engineering to extract oil and gas, such as Petrofac Ltd. and Amec Foster Wheeler PLC. Those firms had been propelled into the FTSE 100 by an oil-price boom, giving Tullow a market value of almost £14.5 billion ($20.9 billion at today's exchange rates) at its height in February 2012. After oil prices began falling in June 2014, Tullow's value fell to £2.9 billion by March 2015, when it exited the FTSE 100. On Friday, its market value was around £1.9 billion. All of the companies that have fallen out of the FTSE 100 in the past year declined to comment. Three months before Tullow's exit from the FTSE 100, Chief Executive Aidan Heavey said it would be a temporary move. "We'll be back again," he said in an interview in December 2014. "My focus now is to get Tullow streamlined for the next phase of growth." Aside from the prestige, a FTSE 100 listing can lift a company's share price, as the funds that track indexes have to buy the stock for their portfolio. It also makes it easier for the companies to issue debt and to raise capital by selling more shares. Oil-and-gas companies, along with mining companies, helped power up the FTSE 100 during the commodities boom in the years preceding the crash, said Tom Eliott, senior international investment strategist at advisory firm Devere Group, which has more than $10 billion in assets under advice and management. "Oil-and-gas companies [were] a major part in the FTSE's recovery after the 2008 financial crisis, but they would have also added a lot more volatility because of the closer exposure to commodity prices," he said. Index provider FTSE Russell declined to comment. Major stock indexes in the U.S. and Europe have risen and fallen with the price of crude in recent months, but the decline of energy stocks as a part of the whole suggest that oil may start to hold less sway for equities. "The longer it falls in price, the less impact it has on the overall market," said Sam Stovall, U.S. equity strategist at S&P Global Market Intelligence. During the boom, fund managers and analysts promoted the stocks. Such was the tidal wave of money that flowed through London's banks to the companies that it even lifted smaller exploration-and-production companies, known as E&Ps, such as Premier Oil PLC and Ophir Energy PLC into the FTSE 250, the next tier down. While Ophir is still in the FTSE 250, Premier dropped out in December, sliding into the small-cap index. Ophir CEO Nick Cooper said the sector urgently needs a fresh approach to regain investor confidence. "The E&P model is being severely questioned as the sector has, in general, failed to create material value for shareholders in recent years," Mr. Cooper said. Premier had no comment. "There was a lot of excitement around the explorers and the oil-services companies who were benefiting from the big oil companies' spending," said Chris Wheaton, a portfolio manager at Allianz Global Investors. "But you had to be careful not to get caught up in the hype." Write to Selina Williams at selina.williams@wsj.com and Ben Eisen at ben.eisen@wsj.com Credit: By Selina Williams and Ben Eisen
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772650008
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772650008?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Price Rise Could Be Its Own Undoing
Author: Friedman, Nicole; Iosebashvili, Ira
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Mar 2016: C.1.
Abstract:
Chevron Corp. could drill 4,000 wells in the Permian basin in Texas that would make money at prices below $50 a barrel, and some of those would make money below $30, Chief Executive John Watson told analysts last week.\n
Full text: The slide in oil prices has paused after crude fell more than 70% from its 2014 peak. Now the question is whether the recent rise itself could spark another downward spiral. U.S. oil prices are up more than 45% from a 13-year low in February, boosted by talks among Saudi Arabia, Russia and other major producers about capping their output. A temporary reduction in global crude supply following outages in Nigeria and Iraq also helped buoy the market. On Friday, the International Energy Agency said that oil prices may have bottomed out, and it forecast U.S. output to decline by nearly 530,000 barrels a day this year. The report seemed to support the market's increasingly bullish mood, pushing U.S. oil prices up 1.7% to $38.50 a barrel. But this rally could lead to its own demise, many analysts warn. Higher prices will likely encourage shale producers to ramp up output again, muddying any forecasts for shrinking U.S. supply. Shale wells can be drilled and fracked within a matter of months, much more quickly than other types of oil wells that can take years to complete. "My concern is if the market surges right back to $50 a barrel. . .we just end up with another problem six months from now," said Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc. "You'd be taking a lot of risk entering this market early," he said, because a rally could be self-defeating. Stored supplies of crude oil and refined products need to fall from current elevated levels before any sustained rally can take place, Goldman said in a noteon Friday. Oil's sharp rise has been part of a broader commodities rally that has lifted everything from gold and copper to cocoa and lean hogs. But as with oil, many investors say they are still looking for more evidence of a fundamental rise in demand for commodities or a significant drop in production to justify further price increases. "We have moved too much on too little data," said George Zivic, portfolio manager of the $250 million Oppenheimer Commodity Strategy Total Return Fund, who said he closed out positions in copper, aluminum and zinc last week. Commodity rallies, from copper to cotton, often face this dilemma: Will a sudden surge in prices lead producers to crank up output and oversupply the market? Last spring's rebound in crude prices shows how this can happen. Crude prices rose 40% between mid-March and early May last year to as high as $60.75 a barrel after falling to as low as $43.46. Investors piled in on expectations that the plunge in prices would spur a quick decline in U.S. oil output. Retail investors tried to benefit from oil's anticipated rebound through exchange-traded funds designed to track oil futures, as analysts called for prices to return to $70 a barrel by 2016. But higher prices also allowed producers to lock in prices for future years and invest in new output. The number of rigs drilling for oil started rising again over the summer as companies rushed to turn on the taps and generate new cash flow. Some producers told investors that because of cost savings, they could afford to bring new wells online with prices above $60 a barrel. By August, oil had fallen to new lows. Cost reductions now allow companies to increase production at even lower prices. Chevron Corp. could drill 4,000 wells in the Permian basin in Texas that would make money at prices below $50 a barrel, and some of those would make money below $30, Chief Executive John Watson told analysts last week. Chevron has 16 rigs in the region drilling wells that will come online in six to 12 months. "We think that those wells that are being drilled will be economic at the kinds of low prices that we're seeing today," he said. The oil surplus may be easing compared with a year ago. U.S. production fell on a yearly basis in December for the first time since 2011, according to the Energy Information Administration. Global production dropped 0.7%in the first two months of this year,the International Energy Agency said on Friday. But Iranian production is expected to rise this year by several hundred thousand barrels a day, analysts say, as international sanctions are lifted. U.S. crude inventories are at their highest level in more than 80 years. Cushing, Okla., a key storage hub and the delivery point for Nymex crude futures, is holding 66.9 million barrels of oil, 92% of its estimated working capacity as of September, according to EIA data. Traders "want to see the inventory worked down," said Joseph Quinlan, head of market and thematic research at Bank of America Global Wealth and Investment Management, which manages $380 billion. Credit: By Nicole Friedman and Ira Iosebashvili
Subject: Crude oil prices; Abreast of the market (wsj)
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Mar 14, 2016
column: Abreast of the Market
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772650060
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772650060?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Eni Starts to Tap Arctic Oil --- Norway grants Italian firm clearance to pump from world's most northern offshore platform
Author: Zampano, Giada
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Mar 2016: B.3.
Abstract:
After long delays and cost overruns, Italian oil company Eni SpA has started to pump oil from the world's most northern offshore platform, Goliat, which is located in the Arctic about 50 miles from Norway's northern coast.
Full text: ROME -- After long delays and cost overruns, Italian oil company Eni SpA has started to pump oil from the world's most northern offshore platform, Goliat, which is located in the Arctic about 50 miles from Norway's northern coast. A spokesman for Eni said Sunday that the company started pumping oil on Saturday night, after receiving the final go-ahead from the Norwegian government. Eni's plans to begin pumping from Goliat were already two years behind schedule and well over budget when they hit another snag last December, as Norwegian regulators requested more information about safety and other issues before giving the green light. The Italian oil and natural-gas company has invested about $6 billion inGoliat so far. With the continued fall in oil prices denting its margins, Eni is likely to struggle to make Goliat economically viable. Several analysts have put the break-even point for the platform at more than $100 a barrel. A spokesman for Eni said Sunday that the company expects the break-even point to be just below $50 a barrel. Eni said in a written statement Sunday that Goliat, the first oil field to start production in the Barents Sea, is estimated to contain reserves totaling roughly 180 million barrels of oil. Its daily output is expected to reach 100,000 barrels. The Italian oil company holds a 65% stake in Goliat. Norway's national oil company, Statoil ASA, controls the rest. Goliat's production will take place through a subsea system consisting of 22 wells, of which 17 are already completed. Eni stressed on Sunday that the field uses the most advanced technology aimed at minimizing the impact on the environment. It receives power from the shore by means of subsea power cables that reduce carbon-dioxide emissions by 50% compared with alternative methods, while water and gas products are re-injected into the reservoir, Eni said. "Goliat's startup is an important milestone for Eni's growth strategy and will significantly contribute to the cash flow generation," the Italian company said. At the end of February, Eni promised more cost cuts after the recent plunge in global crude pricesthat tripled its fourth-quarter net loss. Credit: By Giada Zampano
Subject: Petroleum industry; Acquisitions & mergers
Location: Arctic region Norway
Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: Statoil ASA; NAICS: 324110, 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Mar 14, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772650063
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772650063?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Rout Crimps Sector's Presence on U.K.'s FTSE 100; Oil companies' revenues have plummeted, profits have slumped and investors have retreated from a sector that had long been a source of strength for the U.K. economy.
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract: None available.
Full text: LONDON--Not long ago, if a firm was a British blue chip, there was a good chance it was an oil company. Nearly 24% of the total market value represented in the FTSE 100 index in 2009 comprised oil drillers or oil-service companies. In 2016, the percentage is down to 12%. Only two oil companies are on the FTSE 100--BP PLC and Royal Dutch Shell PLC--down from eight in 2012, when it was the biggest sector on the index. The retreat of oil companies from Britain's flagship index comes as crude prices have fallen over 60% from a peak of $115 a barrel in mid-2014 amid a supply glut due to a U.S. oil boom and roaring production in the Organization of the Petroleum Exporting Countries. Oil companies' revenues have plummeted, profits have slumped and investors have retreated from a sector that had long been a source of strength for the U.K. economy and investors in its stock exchanges. Since June 2014, London-listed oil companies and service companies in the FTSE's oil and gas index have lost around a third of their value. Vanquished from the ranks of blue chips are British oil explorers like Tullow Oil PLC and the companies that provided the equipment and engineering to extract oil and gas, such as Petrofac Ltd. and Amec Foster Wheeler PLC. Those firms had been propelled into the FTSE 100 by an oil-price boom, giving Tullow a market value of almost £14.5 billion ($20.6 billion) at its height in February 2012. Since oil prices began falling in June 2014, Tullow's value fell to £2.9 billion by March 2015, when it exited the FTSE 100. On Friday, its market value was around £1.9 billion. All of the companies that have fallen out of the FTSE 100 in the past year declined to comment. Three months before Tullow's FTSE 100 exit, Chief Executive Aidan Heavey said it would be a temporary move. "We'll be back again," he said in an interview in December 2014. "My focus now is to get Tullow streamlined for the next phase of growth," he added. Aside from the prestige, a FTSE 100 listing can lift a company's share price, as the funds that track indexes have to buy the stock for their portfolio. It also makes it easier for the companies to raise debt and the bigger market cap makes it easier for them to raise finance by issuing more shares. Oil and gas companies, along with mining companies, helped power up the FTSE 100 during the commodities boom in the years preceding the crash, said Tom Eliott, senior international investment strategist at advisory firm Devere Group, which has over $10 billion in assets under advice and management. "Oil and gas companies would have been a major part in the FTSE's recovery after the 2008 financial crisis, but they would have also added a lot more volatility because of the closer exposure to commodity prices," he said. Index provider FTSE Russell declined to comment. During the boom, fund managers and analysts promoted the stocks and such was the tidal wave of money that flowed through London's banks to the companies that it even lifted smaller exploration and production companies, known as E&Ps, such as Premier Oil PLC and Ophir Energy PLC into the FTSE 250, the next tier down. While Ophir is still in the FTSE 250, Premier dropped out in December, sliding into the small-cap index. Ophir CEO Nick Cooper said the sector urgently needed a fresh approach to regain investor confidence. "The E&P model is being severely questioned as the sector has, in general, failed to create material value for shareholders in recent years," Mr. Cooper said. Premier had no comment. "There was a lot of excitement around the explorers and the oil services companies who were benefiting from the big oil companies' spending," said Chris Wheaton, a portfolio manager at Allianz Global Investors. "But you had to be careful not to get caught up in the hype," he added. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772798810
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772798810?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall Sharply on Oversupply Concerns; Oil has been rallying over the past month on hopes that major producers will freeze production
Author: Berthelsen, Christian; Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract:
Both the U.S. and global oil benchmarks gave back about a week's worth of gains, which have come amid a run-up of more than 40% in the last month as bullish investors ignored the current dreary supply-and-demand dynamics and bid up the market in the hope of a future recovery.
Full text: Oil prices fell sharply Monday after Iran said it wouldn't abide by the terms of a production freeze sought by other nations, raising the prospect of a fresh new source for the global crude glut. Both the U.S. and global oil benchmarks gave back about a week's worth of gains, which have come amid a run-up of more than 40% in the last month as bullish investors ignored the current dreary supply-and-demand dynamics and bid up the market in the hope of a future recovery. The U.S. contract ended down 3.4% at $37.18 a barrel on the New York Mercantile Exchange, while the Brent contract settled down 2.1% at $39.53 a barrel on the ICE Futures Europe exchange. Iran's oil minister said over the weekend the country wouldn't participate in an output freeze with other state producers until it reached its production target of 4 million barrels a day, about a third more than current levels. The move raises the prospect of more than 1 million barrels a day coming onto world markets at a time when supplies were just starting to decline. It also raises the risk that other countries that have been party to the talks--Saudi Arabia, Russia, Venezuela and Qatar--may not follow through with a previously discussed output freeze at January levels, since some of them said their participation was contingent on Iran's cooperation. Talk of the production freeze was a key factor in the market's bullish run over the last month, but word that Iran wouldn't participate raised doubts about how much impact it will have--if it comes to pass. Meanwhile, a monthly production report from the Organization of the Petroleum Exporting Countries said its output declined by less than 200,000 barrels in February, though much of that came from pipeline disruptions in Nigeria and Iraq, some of which have already been repaired. More * Talks to Limit Production Hit Obstacles * OPEC Output Fell in February * One Reason Oil May Not Stay in S&P 500 Driver's Seat * Oil's Recent Rally May Be Its Own Undoing The news forced investors to refocus on an excess production problem they had been ignoring. "Some of those stories are starting to unwind a bit here," said Robert Yawger, director of futures at Mizuho Securities USA. "You really can't make a very good argument that things have changed at all." Major OPEC members are showing few signs of curbing output. Iran's statement comes after signs that the country is struggling to find a market for all of its oil. The International Energy Institute reported last week that around 72 million barrels of Iranian oil are being stored on water, more than the level before international sanctions against the country were lifted in January. "What we're seeing is a reaction to how much we have rallied, which is a 17% increase to the Brent price in a month," according to Edward Bell, an analyst at Dubai-based bank Emirates NBD. While the U.S. rig count continues to fall, dropping for a 12th week in a row on Friday, that doesn't change fundamentals enough to warrant prices rising again, Mr. Bell said. A drop in rig counts doesn't necessarily translate into a fall in production. U.S. producers have also become more efficient, which has helped keep output levels in the country above 9 million barrels a day. If prices continue to edge close to $40 a barrel, the trend of U.S. shale producers taking rigs out of action may end as they look to an environment when prices rise again. This could harm the chances of a price recovery further down the line as supply levels are ramped back up. Meanwhile, analysts and traders are expecting another large increase in U.S. inventory data to be reported later this week, bringing stockpiles even closer to maximum capacity at the key U.S. hub in Cushing, Okla. In refined product markets, gasoline futures finished down 1.5% at $1.4226 a gallon, while diesel prices fell 1.8% to $1.1965 a gallon. Summer Said contributed to this article Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen and Miriam Malek
Subject: Petroleum industry; Supply & demand; Prices
Location: Iran United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772810713
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772810713?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Output Negotiations Hit Obstacles; The notion of a production freeze to raise oil prices has stoked tension among big oil producers
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract:
Related * OPEC Says Crude Production Fell in February * IEA Sees Signs Oil Prices Might Have Bottomed Out (March 11) * 'Critical Mass' of Oil-Producing Countries Agree to Freeze Production (March 1) * Saudi Arabia, Russia, Qatar, Venezuela Agree to Freeze Oil Output (Feb. 16) Russia, Saudi Arabia, Qatar and Venezuela say a cap could be the first measure by oil producers to stabilize oil prices since OPEC decided against output curbs in November 2014. The IEA's medium-term report also says Russian oil production will rise by just 0.3% in 2016, while the U.S. Energy Information Administration foresees an output fall of 100,000 barrels a day.
Full text: Big oil producers have been negotiating for weeks on a deal to limit crude output in the hope of raising oil prices. Now their talks are hitting obstacles. Countries including Russia, Kuwait and Venezuela can't agree on timing. They are at odds over whether Iran would be bound by a production cap. And they have been unable to reach a consensus on where to meet to discuss their differences. Then there is a much bigger concern: Any cap they do impose likely will do little, if anything, to boost the sagging price of crude. Data from the International Energy Agency show production from the 15 countries discussing a cap would decline even without a freeze. The combined output of the group will drop by 200,000 barrels a day in 2016 because of investment cuts and lackluster demand, according to data from the agency , which monitors global energy trends. Countries have been discussing a production cap to address a world-wide crude glut--on any given day, oil production outstrips demand by almost 2 million barrels, according to the IEA. But the so-called production freeze that countries currently are negotiating "will not make an immediate impact on a massively over-supplied world oil market," the IEA said in its monthly report Friday. On Monday, the Organization of the Petroleum Exporting Countries said its production already has fallen by around 175,000 barrels in February compared with the previous month, in part because of lower production in Nigeria and the United Arab Emirates--two countries that are debating joining the output freeze. Countries discussing a production freeze include key OPEC members such as Saudi Arabia and Venezuela, as well as non-OPEC nations such as Russia and Oman. Their discussions so far have been rocky. Ministers from various countries have made contradictory public statements on the nature of a potential freeze. And on Thursday, Ecuador abruptly postponed a meeting with other South American countries it had been planning to hold on Friday in its capital Quito. Last month, the oil ministers of OPEC members Venezuela, Saudi Arabia and Qatar said they reached a deal with Russia to freeze production at January levels. On March 1, Russian Energy Minister Alexander Novak said that freezing production will bring together 15 OPEC and non-OPEC countries, which he said account for 73% of oil production in the world. Related * OPEC Says Crude Production Fell in February * IEA Sees Signs Oil Prices Might Have Bottomed Out (March 11) * 'Critical Mass' of Oil-Producing Countries Agree to Freeze Production (March 1) * Saudi Arabia, Russia, Qatar, Venezuela Agree to Freeze Oil Output (Feb. 16) Russia, Saudi Arabia, Qatar and Venezuela say a cap could be the first measure by oil producers to stabilize oil prices since OPEC decided against output curbs in November 2014. Since then, ongoing high production from countries including the U.S. has cut oil prices in half. Russia's Mr. Novak said last month the potential pact could shrink oversupply by 1.3 million barrels a day--eliminating much of the excess production in the first half of 2016. "Current prices are forcing everyone to freeze. So I think it is happening as we speak," United Arab Emirates Energy Minister Suhail al-Mazrouei said last week . "It doesn't make any sense for anyone to increase production at current prices." Mr. Mazrouei said the U.A.E. plans to join the production freeze. Non-OPEC members such as Azerbaijan and Mexico are facing significant production declines in 2016 as investments have been insufficient to make up for depleting fields. The IEA's medium-term report also says Russian oil production will rise by just 0.3% in 2016, while the U.S. Energy Information Administration foresees an output fall of 100,000 barrels a day. Iran, in contrast, will boost its production by 600,000 barrels a day by mid-2016 following an end to sanctions, the IEA projected. Iran won't consider any freeze until it boosts its production by 1 million barrels a day to 4 million barrels a day--its pre-sanctions level--the country's oil minister, Bijan Zanganeh, said Sunday. Until then, other producers "should leave us alone," he said, according to the semiofficial Iranian Students News Agency. An oil-ministry official confirmed that Mr. Zanganeh made the statement. Effective or not, the notion of a production freeze has stoked tension among the big oil producers. Late Thursday, Carlos Pareja Yannuzzelli, Ecuador's Minister of Hydrocarbons, said a summit with Venezuela, Colombia and Mexico originally planned for Friday had been postponed because of conflicting schedules. Mr. Pareja Yannuzzelli told Ecuadorean news agency Andes the aim of the gathering was to negotiate a unified stance ahead of a bigger gathering of producers that includes top oil exporters Saudi Arabia and Russia. A press official at Ecuador's oil ministry declined to comment. Mr. Pareja Yannuzzelli said a larger meeting would take place on April 17, nearly a month later than the date of March 20 announced by Nigeria's petroleum minister, Emmanuel Ibe Kachikwu. OPEC delegates familiar with Saudi deliberations said the Persian Gulf's Arab countries want a meeting of OPEC and non-OPEC members to be held in mid-April in Doha, but nothing has been finalized. Other cities proposed for the meeting are Moscow and Caracas, demonstrating how uncertain the event has become. Members also disagree on the length of any production freeze. Venezuela's oil minister, Eulogio del Pino, said in February that a freeze could be binding only until the summer, while Russia's Mr. Novak said it would be valid for the whole year. Freeze supporters like Venezuela, Saudi Arabia, Qatar and Russia are also divided over whether Iran, which wants to boost output after the recent end to economic sanctions, would have to join to make the commitment binding. Speaking after meeting Iran's oil minister on Monday, Mr. Novak said "there is a gap that Iran must restore. And I think that approach is totally reasonable," according to Russian news agency Interfax. A spokeswoman at the Russian energy ministry confirmed the statements. Arab Persian Gulf producers have said they don't want to sign onto a freeze unless Tehran joins. Kuwait's acting oil minister, Anas al-Saleh, said on Tuesday that Kuwait's participation in an output freeze would require all major oil producers to join, including Iran. "I'll go full power if there's no agreement. Every barrel I produce I'll sell," Mr. Anas al-Saleh said. Persian Gulf countries--the only producers with the financial flexibility to curb production without having to make crippling government budget cuts--say a summit to debate a production freeze won't boost prices if it doesn't come with detailed output targets and a time frame to implement them. "If we want a positive response from oil markets, we need to set up a clear agenda," one OPEC official in the region said. "If all we do speak through the media, the price will fall again." Nicolas Parasie, Selina Williams, Laura Mills and Andrey Ostroukh contributed to this article. Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon and Summer Said
Subject: Petroleum industry; Cartels; Crude oil prices; Petroleum production
Location: Qatar Ecuador Iran Venezuela Kuwait Russia Saudi Arabia
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772850639
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Government Bonds Strengthen; A drop in oil prices added to mixed economic picture ahead of Fed meeting
Author: Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract:
U.S. government bonds strengthened Monday, retracing some of their recent losses as traders reacted to a drop in oil prices and prepared for this week's Federal Reserve monetary policy meeting.
Full text: U.S. government bonds strengthened Monday, retracing some of their recent losses as traders reacted to a drop in oil prices and prepared for this week's Federal Reserve monetary policy meeting. The yield on the benchmark 10-year Treasury settled at 1.963%, compared with 1.977% Friday. Bond yields fall as their prices rise. In recent weeks, bond yields have climbed as traders begin to price in the possibility of an interest-rate increase this year after a run of solid data on the U.S. economy. Still, the Fed outlook remains murky and could easily be altered by new economic data or further financial market volatility, analysts say. Monday's decline in oil prices was attributed to renewed concerns about the oversupply of crude, fueled by signals from Iran that it has no intention of curbing its output until it reaches around four million barrels a day. Lower oil prices help to keep a lid on inflation, which is a threat to long-term bonds as higher consumer prices chip away the value of bonds. "On a day when you don't have a whole lot of volatility in U.S. equities or overseas fixed income, what happens with oil is going to play a pretty big role" in driving bond prices, said Stanley Sun, interest-rate strategist at Nomura Securities International in New York. Otherwise, investors were mostly focused on the upcoming Fed event, he added. Fed officials start a two-day meeting Tuesday and are scheduled to release an interest-rate statement Wednesday. Fed Chairwoman Janet Yellen will hold a news conference shortly after the release. Few expect the Fed to raise interest rates, but analysts and investors say that improving economic conditions and more confident financial markets give the Fed room to assume a somewhat less dovish posture. Higher interest rates tend to dilute the value of outstanding bonds. The Fed "is really trying to keep June on the table" for a rate increase, said Aaron Kohli, interest-rate strategist at BMO Capital Markets. The central bank, he added, "needs to find that balancing act between upsetting that risk appetite that's been recovering for the first two months of the year and keeping credibility in their forward rate path." Fed-funds futures, used by investors and traders to place bets on central-bank policy, Monday indicated a 50% likelihood of a rate increase from the Fed at its June policy meeting and a 76% likelihood of a rate increase in December, according to data from CME Group. In early February, the odds for both meetings were zero. The yield on the two-year Treasury note, which is more sensitive to interest-rate changes than longer-dated bonds, settled at 0.959%, compared with 0.957% on Friday. Write to Sam Goldfarb at sam.goldfarb@wsj.com Credit: By Sam Goldfarb
Subject: Interest rates; Bond markets; Prices; Government bonds
Location: United States--US
Company / organization: Name: CME Group; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772858191
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772858191?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Why Airlines Are Kicking the Oil Betting Habit; Attempts to take advantage of low oil prices aren't so simple
Author: Grant, Charley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract:
The average U.S. front-month crude-oil futures contract price has gained 17% or more in eight years since 2000, according to the Energy Information Administration.
Full text: U.S. airlines are trying to harness low fuel prices to power their bottom lines. That might not be as simple as it sounds. Low oil prices mean that major airlines are less interested in using derivatives to hedge their exposure to fuel-cost fluctuations. Delta Air Lines said last week it has closed its hedges altogether , while United Continental Holdings and Southwest Airlines have scaled back their use of such contracts. In this regard they are catching up to American Airlines, which has eschewed the use of such safeguards since 2014. Certainly, there are valid reasons for airlines to pursue this strategy. Fuel is the largest expense for an airline, and low prices have provided an earnings tailwind. And with passenger unit revenues on the decline after a long climb higher, management teams need to find new ways to keep the bottom line growing. Lowering expenses is a natural place to start. Furthermore, using derivatives has a cost and exposes the contract holder to certain risks as well. Still, it is no secret that oil prices are volatile . The average U.S. front-month crude-oil futures contract price has gained 17% or more in eight years since 2000, according to the Energy Information Administration. Similar volatility can be observed over shorter time frames as well. Fuel expense has varied widely as a result. Those costs averaged 18.7% of revenue for the four major carriers in 2015, when the airlines enjoyed record profits. That was down from 33% in 2011. The higher number would have put a significant dent in those windfalls. The move by airlines to bet on the persistence of lower energy costs may indeed turn out to be the correct decision. But investors should keep in mind that companies are still taking a significant risk by doing so. Write to Charley Grant at charles.grant@wsj.com Credit: By Charley Grant
Subject: Prices; Airlines; Airline industry; Statistical data
Location: United States--US
Company / organization: Name: Delta Air Lines Inc; NAICS: 481111; Name: American Airlines Inc; NAICS: 481111; Name: United Continental Holdings Inc; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772876246
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772876246?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Magnum Hunter Seeks Approval for SEC Settlement; Oil and gas company reaches $250,000 settlement
Author: Palank, Jacqueline
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract:
According to the settlement, the alleged violations arose out of Magnum Hunter's "rapid growth" between 2009 and 2011 due to a spate of acquisitions of oil and gas properties, which strained the company's accounting staff and resources.
Full text: Magnum Hunter Resources Corp. reached a deal with federal regulators to avoid more than $1 million in penalties related to alleged financial reporting deficiencies. The oil and gas company is asking the U.S. Bankruptcy Court in Wilmington, Del., to sign off on the $250,000 settlement with the Securities and Exchange Commission, which accepted the settlement last week. The deal, which doesn't include an admission of guilt from Magnum Hunter, ensures the company won't face legal action by the SEC related to the company's alleged violations of financial reporting provisions under federal securities law. "Based on the SEC's recent course of dealing with respect to similar allegations, MHRC's maximum exposure could be well in excess of $1 million if the SEC elected to pursue and ultimately prevailed on all of its alleged claims against MHRC," the company said in court papers. According to the settlement, the alleged violations arose out of Magnum Hunter's "rapid growth" between 2009 and 2011 due to a spate of acquisitions of oil and gas properties, which strained the company's accounting staff and resources. As a result, there were significant delays in preparing the company's financial statements, among other issues. Rather than declare the strained accounting department a "material weakness" that would call into question the veracity of the company's financial statements, however, the settlement says the company's external auditor declared the situation to be a less severe "significant deficiency." The SEC said Magnum Hunter's then-chief financial officer and then-chief accounting officer should have concluded differently as well. According to Magnum Hunter, the SEC launched an investigation into the company after the price of its common shares took a "significant drop" in early 2013. The settlement is subject to bankruptcy-court approval at a March 31 hearing, and Magnum Hunter said the deal will ensure it's not distracted by litigation during its restructuring. The Irving, Texas, company is hoping to exit bankruptcy soon. Its creditors are currently voting on a restructuring plan that calls on lenders and bondholders to swap some $1 billion in debt for most, if not all, of the new common stock in the restructured company. The plan, which the court will review at the March 31 hearing, would repay a portion of unsecured creditors' claims, which could top $200 million, in either cash or equity. Current equity would be canceled, and shareholders wouldn't receive any compensation under the plan. Magnum Hunter sought chapter 11 protection in December, one of many oil and gas companies brought to heel as a result of plummeting commodity prices. (Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com.ezproxy.uta.edu ) Write to Jacqueline Palank at jacqueline.palank@wsj.com Credit: By Jacqueline Palank
Subject: Bankruptcy; Bankruptcy reorganization; Settlements & damages; Accounting; Financial reporting; Natural gas utilities
Company / organization: Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1772883121
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1772883121?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Angola Cuts 2016 Spending by 20%; Country can cope with low oil prices, finance minister says
Author: Margot, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract: None available.
Full text: LONDON--Angola, facing economic and political pressures, has cut spending under its 2016 budget by 20% and is reassuring international investors it can cope with persistently low oil prices, Finance Minister Armando Manuel said Monday. Mr. Manuel said the surprise announcement Friday by President José Eduardo dos Santos to step down in 2018 shouldn't concern the country's foreign investors, and is part of "a normal process." Mr. dos Santos has governed the Atlantic coast nation since 1979 and didn't lay out a succession plan for the next leader of his party. Angola is expected to hold its next presidential election in 2017. "We are not talking about changes in regime itself, we are talking succession of one person. It's a democratic country and this is what we expect," Mr. Manuel said in an interview after speaking at a London conference Monday. He said the ruling party, the MPLA, would handle succession issues. Mr. Manuel declined to comment on speculation that Mr. dos Santos could push for his son, José Filomeno de Sousa dos Santos, the head of Angola's sovereign-wealth fund, or his daughter, business magnate Isabel dos Santos, to take over. Along with other oil-dependent African nations, Angola has been rocked by the sharp fall in oil prices and a shrinking supply of dollars to pay for imports. Around 80% of the country's revenue and nearly all of its export earnings come from crude-oil sales. Earlier this month, Moody's Investors Service put the country's credit rating on review for downgrade, saying the structural shock in oil markets had decreased Angola's economic and financial strength. The country in recent years has relied heavily on Chinese investment, typically in exchange for oil shipments, for public-spending projects that include infrastructure upgrades. After having projected a $45 a barrel oil price in its 2016 budget, Angola has already moved to reduce spending by 20% and is currently projecting a $39-a-barrel oil price for the rest of the year under its latest plans, Mr. Manuel said. He said the budget could be cut further if necessary by June. "We are ready to make the required adjustments." So far, that has included paring what Mr. Manuel said had been "an ambitious portfolio of public investment." To save money, Angola has gotten rid of most fuel subsidies and is reforming its tax system to raise more revenue, he said. The country is also trying to diversify away from its reliance on oil by investing in sectors such as fish farming and agriculture. The finance minister said Angola won't tap international investors for a new Eurobond this year, after having brought its debut issue last year for $1.5 billion. The country will meet with investors later this year, though, in a non-deal roadshow, as "a way to keep in touch with the investor community and let them know the policies we are putting in place," Mr. Manuel said. Amid concerns that Angola's oil-backed debt with China could balloon out of control, Mr. Manuel said a likely recovery in the oil price would diminish those liabilities. "In regards to the debt portfolio, we don't have pressures on the short term," Mr. Manuel said. "Currently we can manage the actual structure of the debt service. It's pretty comfortable," he said. Write to Margot Patrick at margot.patrick@wsj.com Credit: By Margot Patrick
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773018974
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773018974?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shorting Oil to Hedge Credit; Hedge funds that own energy debt have been shorting the oil market as a way to hedge against further declines in the bonds
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Mar 2016: n/a.
Abstract:
Related stories * Oil Prices Fall Sharply on Oversupply Concerns * Oil Output Negotiations Hit Obstacles Blackstone Group LP's GSO Capital Partners and Apollo Global Management LLC are among many firms that have shorted oil to hedge their position in high-yield debt, according to people familiar with the matter.
Full text: Some of the biggest bears in the oil market this year have been investors who are actually hoping to see the market recover. Hedge funds that own poorly-performing high-yield debt issued by energy producers like Continental Resources Inc. and Chesapeake Energy Corp. have been shorting the market as a way to hedge against further declines in the bonds. The paradoxical result is that these big investors are betting against themselves. On Monday, U.S. oil futures dropped 3.4% to $37.18 a barrel on the New York Mercantile Exchange. Related stories * Oil Prices Fall Sharply on Oversupply Concerns * Oil Output Negotiations Hit Obstacles Blackstone Group LP's GSO Capital Partners and Apollo Global Management LLC are among many firms that have shorted oil to hedge their position in high-yield debt, according to people familiar with the matter. They are taking these actions because the previous mechanism for hedging oil-company debt, through contracts known as credit default swaps, is much less active, and the bonds have been hard to sell without taking steep losses. Instead these investors are having to hedge their debt positions by shorting oil prices, as a proxy. It's unclear how large the bond investors' short positions are, or how much they have weighed on the oil market. But they bring at least some pressure on oil prices and come from an unexpected source. The conditions in the credit market "have turned everyone to short positions in oil," said Jason Thomas, head of research for private-equity firm The Carlyle Group, in an interview. "It turns into a one-sided market, and that's where you have downward pressure on prices." The short positions weighed on the oil market during the deep downturn early this year, and helped intensify the recent rally in crude prices as investors unwound some of the hedges. Short positions in the benchmark U.S. crude contract reached a record last month. Mr. Thomas said in a recent note to clients that investment firms hedging by betting on falling oil prices could be undermining their own bond positions by keeping a lid on the market, which makes it harder for borrowers to pay back debt and "increases default risks." It's unclear if Carlyle is participating in the trade. Mr. Thomas declined to comment. At their peak, short trades had a market value of more than $5.8 billion and represented more than 190 million barrels of oil, about 10 days' worth of U.S. consumption. These short positions can weigh on oil prices, cutting into any price rebound. They can also make the market much more volatile, since traders might look to close these positions during market rallies, amplifying the gains. Oil prices have surged more than 40% over the past few weeks, wiping out some of these short positions. But bond investors are having to short the oil market because their previous vehicle for hedging has all but disappeared. Credit default swaps, a type of security used to guard against price declines in bonds, have dried up in the aftermath of the financial crisis, as tough new regulations have crimped banks' ability to take the other side of such risky trades. That's left investors without the most direct means of hedging their positions. And unlike the ability of investors in investment-grade debt to turn to credit indexes for risk protection, the lack of swaps available on high-yield names has made indexes a poor proxy to offset price declines, forcing the unusual turn toward the futures market. Investors in energy securities have suffered in the oil-market downturn, particularly those holding high-yield bonds. The pain is widespread: by some measures, energy companies comprise as much as a fifth of the high-yield universe. Overall, the nearly half-trillion dollars in outstanding energy debt is valued at about 65 cents on the dollar, though some high-yield names have gone for as little as 10 cents to 25 cents on the dollar. As a group, the bonds' value fell more than 19% between the start of the year and mid-February, according to the Bank of America Merrill Lynch High Yield Energy Index, before recovering somewhat since then in tandem with the rebound in oil prices. The banks no longer maintain large inventories of bonds, and are less willing to buy risky positions from investors and hold them on their books. The number of short positions in the $80 billion derivative market tied to the benchmark U.S. oil contract began to skyrocket in October, as prices fell below $45 a barrel, the level at which the industry is generally believed to break even on operations. "It's been a common strategy throughout the last year," said a credit trader at one hedge-fund firm, who spoke on the condition that neither he nor his firm be identified. Still, he added: "You're shooting against yourself." Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen
Subject: Investment bankers; Petroleum industry; Crude oil prices; Energy industry
Location: United States--US
Company / organization: Name: Apollo Global Management LLC; NAICS: 523920; Name: New York Mercantile Exchange; NAICS: 523210; Name: GSO Capital Partners LP; NAICS: 525990; Name: Chesapeake Energy Corp; NAICS: 211111; Name: Continental Resources Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773025689
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773025689?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Many Shale Companies Are Unable to Ramp Up Oil Output; Idle equipment, limited workforce prevent shale sector from playing role of swing producer
Author: Sider, Alison; Dawson, Chester; Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
Related * Shorting Oil to Hedge Credit * Oil Loses Its Clout on U.K. Stock Index More than three dozen U.S. oil and gas producers plan to cut their capital spending for 2016 by nearly half, on average, compared with last year, according to a Wall Street Journal analysis of company financial filings.
Full text: The U.S. was supposed to be the world's new swing oil producer, able to nimbly open and close the taps in response to market forces, thanks to its bounty of shale fields. But as oil prices show some signs of stabilizing, American producers and oilfield-services companies are warning that they may not be able to jump-start drilling. The reason: Many independent companies are too financially strapped, have let go too many workers, or have idled too much equipment to immediately ramp up again. "The balance sheets of these shale-only producers have to be repaired for them to get back to drilling," said John Hess, the chief executive of Hess Corp. "That's going to curb any recovery." Just as U.S. output fell more slowly than predicted--even as oil plunged from around $100 a barrel in 2014 to $30--it is likely to be slower in recuperating, even if prices rebound to $50 a barrel or more, some oil executives and analysts now say. Related * Shorting Oil to Hedge Credit * Oil Loses Its Clout on U.K. Stock Index More than three dozen U.S. oil and gas producers plan to cut their capital spending for 2016 by nearly half, on average, compared with last year, according to a Wall Street Journal analysis of company financial filings. Some of the largest U.S. oilfield-services firms have laid off 110,000 people in the past year, Evercore ISI analysts estimate, and many of those workers have no plans to return to the industry. Close to 60% of the fracking equipment in the U.S. has been idled during the downturn, according to IHS Energy, which estimates it would take two months for some of that equipment to return. It isn't clear that oil prices will continue their recent rally: Global crude prices fell 2.1% Monday to $39.53 as a tentative agreement by key members of the Organization of the Petroleum Exporting Countries to freeze production ran into obstacles. Still, even if prices return to levels where shale drillers can make money again, many companies are vowing to be cautious. Some are tempered by what occurred last spring, when producers jumped back into drilling new wells after oil prices briefly hit $60 a barrel, inadvertently worsening a supply glut that ultimately made prices worse. "At $40, I doubt we're going to see a lot of acceleration," said Taylor Reid, president and chief operating officer of Oasis Petroleum Inc., at an energy conference in Denver last week. One reason output remained robust last year is that drilling and fracking wells got cheaper. Producers leaned on services companies to cut costs, and certain wells were still profitable even at lower prices. But now many companies say they have cut as much as they can. In the Bakken Shale region, prices will need to be above $60 for benchmark West Texas Intermediate crude for at least three months before the area sees a meaningful uptick in drilling activity, said Lynn Helms, Director of North Dakota's Department of Mineral Resources. "If you've been on a strict diet for a long period of time, it takes a while to put the weight back on," he told reporters Friday. The U.S. Energy Information Administration estimates that U.S. oil output in February was down 600,000 barrels a day from last year's peak of close to 9.7 million barrels a day--a 6% drop--and some of the biggest U.S. shale producers have said they plan to curb production by another 10% this year. Experts such as IHS's Daniel Yergin have predicted that U.S. shale drillers would emerge as the world's new swing producers, stepping into a role traditionally filled by Saudi Arabia and other OPEC nations. The research firm said it still expects the U.S. will play that role in global markets, thanks to shale, but said current headwinds could delay a response to higher prices. U.S. oil producers have built up an inventory of drilled but un-fracked wells, a dormant source of oil that could translate into a quick burst of new supplies. Such wells could churn out 620,000 barrels a day for six months if they were all brought online at once, Goldman Sachs analysts wrote in a research note last week. But companies that want to put rigs back to work right away are likely to be limited by a smaller workforce and depleted equipment, which could make it difficult to coordinate a ramp-up. A recent survey by Hays PLC found that 72% of laid-off oil and gas workers around the world are looking for jobs in other industries. Basic Energy Services Inc., a fracking firm that has cut more than 40% of its workforce since the downturn began, has estimated that only one in five laid-off workers will return, taking with them the expertise they developed during the years when companies mastered techniques like drilling and fracking wells that extended thousands of feet horizontally underground. "We have lost a lot of good people. They won't be back," Chief Executive Roe Patterson said at a conference last week. Among those not planning to return to oil work is supply chain expert Brent Janezic, who worked for Schlumberger Ltd. for nearly five years. After transferring from Houston to Calgary in 2013 to oversee the Canadian unit's logistics and purchasing of the sand and nitrogen gas used in fracking, he lost his job last month. Now he is looking at companies in other industries that have large supply chains, where his skills could transfer easily. "I can't afford to wait idle on the sidelines for prices to recover," said Mr. Janezic, 33. "I've got to get things rolling." Some companies--including Schlumberger, the world's largest oilfield-services firm--are trying to manage their layoffs to head off what some see as a looming brain drain. Schlumberger has said some 1,700 of its young engineers with two or three years of experience are effectively on extended leave--receiving some elements of salaries and benefits, but not costing the company much until they are needed again. "Quite a few of those guys have no problem taking a year off, traveling the world," said Patrick Schorn, Schlumberger's president of operations, at the Credit Suisse Annual Energy Summit last month. "When there is an upturn, those are the first guys we call back." Still, many new workers will have to be hired and trained--a process that could take months, analysts say. And they will be working with rigs and pumps that have deteriorated or sometimes stripped apart to cheaply repair working equipment as it broke down. "Coming back this time is going to be tough, no question about it," said Tom Petrie, chairman of Petrie Partners, a boutique investment banking firm. "These cutbacks have been painful." Write to Alison Sider at alison.sider@wsj.com , Chester Dawson at chester.dawson@wsj.com and Erin Ailworth at Erin.Ailworth@wsj.com Credit: By Alison Sider, Chester Dawson and Erin Ailworth
Subject: Petroleum industry; Crude oil prices; Drilling
Location: United States--US
People: Hess, John
Company / organization: Name: Oasis Petroleum Inc; NAICS: 211111; Name: Hess Corp; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773032223
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773032223?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Shorting Oil to Hedge Credit; Hedge funds that own energy debt have been shorting the oil market as a way to hedge against further declines in the bonds
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
Hedge funds that own poorly-performing high-yield debt issued by energy producers like Continental Resources Inc. and Chesapeake Energy Corp. have been shorting the market as a way to hedge against further declines in the bonds.
Full text: Some of the biggest bears in the oil market this year have been investors who are actually hoping to see the market recover. Hedge funds that own poorly-performing high-yield debt issued by energy producers like Continental Resources Inc. and Chesapeake Energy Corp. have been shorting the market as a way to hedge against further declines in the bonds. The paradoxical result is that these big investors are betting against themselves. On Monday, U.S. oil futures dropped 3.4% to $37.18 a barrel on the New York Mercantile Exchange. Blackstone Group LP's GSO Capital Partners and Apollo Global Management LLC are among many firms that have shorted oil to hedge their position in high-yield debt, according to people familiar with the matter. They are taking these actions because the previous mechanism for hedging oil-company debt, through contracts known as credit default swaps, is much less active, and the bonds have been hard to sell without taking steep losses. Instead these investors are having to hedge their debt positions by shorting oil prices, as a proxy. It's unclear how large the bond investors' short positions are, or how much they have weighed on the oil market. But they bring at least some pressure on oil prices and come from an unexpected source. The conditions in the credit market "have turned everyone to short positions in oil," said Jason Thomas, head of research for private-equity firm The Carlyle Group, in an interview. "It turns into a one-sided market, and that's where you have downward pressure on prices." The short positions weighed on the oil market during the deep downturn early this year, and helped intensify the recent rally in crude prices as investors unwound some of the hedges. Short positions in the benchmark U.S. crude contract reached a record last month. Mr. Thomas said in a recent note to clients that investment firms hedging by betting on falling oil prices could be undermining their own bond positions by keeping a lid on the market, which makes it harder for borrowers to pay back debt and "increases default risks." It's unclear if Carlyle is participating in the trade. Mr. Thomas declined to comment. At their peak, short trades had a market value of more than $5.8 billion and represented more than 190 million barrels of oil, about 10 days' worth of U.S. consumption. These short positions can weigh on oil prices, cutting into any price rebound. They can also make the market much more volatile, since traders might look to close these positions during market rallies, amplifying the gains. Related * Shale Producers Can't Ramp Up Oil Output * Oil Loses Its Clout on U.K. Stock Index * Oil Prices Fall on Oversupply Concerns * Talks to Limit Production Hit Obstacles Oil prices have surged more than 40% over the past few weeks, wiping out some of these short positions. But bond investors are having to short the oil market because their previous vehicle for hedging has all but disappeared. Credit default swaps, a type of security used to guard against price declines in bonds, have dried up in the aftermath of the financial crisis, as tough new regulations have crimped banks' ability to take the other side of such risky trades. That's left investors without the most direct means of hedging their positions. And unlike the ability of investors in investment-grade debt to turn to credit indexes for risk protection, the lack of swaps available on high-yield names has made indexes a poor proxy to offset price declines, forcing the unusual turn toward the futures market. Investors in energy securities have suffered in the oil-market downturn, particularly those holding high-yield bonds. The pain is widespread: by some measures, energy companies comprise as much as a fifth of the high-yield universe. Overall, the nearly half-trillion dollars in outstanding energy debt is valued at about 65 cents on the dollar, though some high-yield names have gone for as little as 10 cents to 25 cents on the dollar. As a group, the bonds' value fell more than 19% between the start of the year and mid-February, according to the Bank of America Merrill Lynch High Yield Energy Index, before recovering somewhat since then in tandem with the rebound in oil prices. The banks no longer maintain large inventories of bonds, and are less willing to buy risky positions from investors and hold them on their books. The number of short positions in the $80 billion derivative market tied to the benchmark U.S. oil contract began to skyrocket in October, as prices fell below $45 a barrel, the level at which the industry is generally believed to break even on operations. "It's been a common strategy throughout the last year," said a credit trader at one hedge-fund firm, who spoke on the condition that neither he nor his firm be identified. Still, he added: "You're shooting against yourself." Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen
Subject: Investment bankers; Petroleum industry; Investments; Crude oil prices; Energy industry
Location: United States--US
Company / organization: Name: Apollo Global Management LLC; NAICS: 523920; Name: Blackstone Group LP; NAICS: 523110; Name: New York Mercantile Exchange; NAICS: 523210; Name: GSO Capital Partners LP; NAICS: 525990; Name: Chesapeake Energy Corp; NAICS: 211111; Name: Continental Resources Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773032326
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773032326?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Futures Rebound but Attention Stays on Excess Supply; May Brent crude on London's ICE Futures exchange rose 10 cents to $39.63 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
Investors sold off oil contracts following news that Iran's oil minister said the country wouldn't participate in an output freeze with other nations, dimming hopes for a supply freeze by major producing nations and reining in a major bullish force for the oil market.
Full text: Oil prices steadied in early Asian trading Tuesday, rebounding from deep losses in the prior session, spurred by fading expectations for a supply freeze by major producing nations. On the New York Mercantile Exchange, light, sweet crude futures for April delivery traded up 12 cents to $37.30 a barrel in the Globex electronic session. May Brent crude on London's ICE Futures exchange rose 10 cents to $39.63 a barrel. The rise follows losses of more than 3% for Nymex crude and more than 2% for Brent in the prior trading session. Investors sold off oil contracts following news that Iran's oil minister said the country wouldn't participate in an output freeze with other nations, dimming hopes for a supply freeze by major producing nations and reining in a major bullish force for the oil market. "If you freeze production now ... then all you're doing is giving market share to Iran," said Virendra Chauhan, oil analyst at Energy Aspects. "The reality is we don't see a production cut until December." He added that the oil market at the moment has a natural cap near current levels, given the quick availability of new supply that comes online at higher prices. "What can happen is ... you have a rally that kills the rally." Major oil producers have shown few signs of willingness to curb output. A monthly production report from the Organization of the Petroleum Exporting Countries released Monday showed the group's output declined by less than 200,000 barrels in February. Much of that came from pipeline disruptions in Nigeria and Iraq, some of which have already been repaired. Later this week, investors will get an update on U.S. oil inventories. Due Wednesday, the government data are expected to show stockpiles in the key U.S. oil hub in Cushing, Okla., are nearing maximum levels. Benchmark Nymex reformulated gasoline blendstock for April rose 76 points to $1.4302 a gallon, while April diesel traded at $1.2012, 47 points higher. ICE gasoil for April changed hands at $359 a metric ton, up $3.25 from Monday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Petroleum industry; Price increases
Location: Iran United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773058030
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773058030?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Most Asian Stock Markets Close Lower Amid Weaker Oil and Commodities Prices; Japan's bank shares fall after Bank of Japan leaves key rate unchanged
Author: Fong, Dominique
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
[...]the Asian markets have been taking the [recent] buoyancy in commodities prices as a sign of global demand recovery.
Full text: Most Asian stock markets closed lower Tuesday amid weaker oil and commodities prices. Investors were watching the Bank of Japan, which in the afternoon announced it was keeping the reserves deposit rate at minus 0.1%. Japan's Nikkei Stock Average fell sharply after the announcement and closed 0.7% lower. But elsewhere, weaker oil and commodities prices weighed on shares. Related * Bank of Japan Stands Pat on Monetary Policy * Price of China's Controlled Currency: Stunted Role in Global Trade * China Regulators Speed Up Help for Banks on Bad Loans * Back From the Dead: Interest-Rate Hikes Are Getting Prices in Again * Yuan Rise Is Sign of China Policy Success Australia's S&P/ASX 200 ended down 1.4%, and Korea's Kospi lost 0.1%. In China, the Shanghai Composite Index recouped losses to end up 0.2%. Hong Kong's Hang Seng Index fell 0.7%. Oil prices slipped after Iran said on Monday that it wouldn't participate in a production freeze sought by other nations. "Commodities prices declined, and oil was one of the biggest drags," said Manishi Raychaudhuri, Asian equity strategist at BNP Paribas. "Naturally, the Asian markets have been taking the [recent] buoyancy in commodities prices as a sign of global demand recovery. They were disappointed by this claw-back in global commodity prices." In Japan, bank shares fell lower, a sign that investors remained worried that negative rates could hurt bank earnings. A gauge of bank shares on the large Tokyo Stock Price Index--known as Topix--ended 0.3% lower Tuesday. Bank of Japan Gov. Haruhiko Kuroda sought to dispel those concerns on Tuesday, saying the rate policy wouldn't have a big impact on banks' profitability, though he acknowledged that it could hurt earnings. The central bank also said in a statement that it would tweak the negative rate policy to ease the burden on some commercial banks. Japan stocks have dropped slightly since negative interest rates were adopted on Jan. 29. The broader Topix is down 4.2% from the close of Jan. 29 to the end of Tuesday. In China, the Shanghai market reversed early losses, lifted by a surge in banking and insurance shares in the afternoon. The Shanghai Composite Index rebounded from being down as much as 1.4%. Analysts said the rally appeared to reflect a pattern in the past when government-backed funds bought stocks in the afternoon to support the market. "Investors are anxious about the withdrawal of state support in the market when the National People's Congress concludes this week," said Guo Yanhong, an analyst at Founder Securities, referring to China's annual legislative session. Stocks across the Asia region were also falling ahead of a U.S. Federal Reserve interest-rate decision due Wednesday. Economists largely expect the central bank to hold rates steady. In other markets, investors continued to pile into longer-term Japanese government debt to chase their positive yields. The yield on Japan's benchmark 10-year government bond last week fell to a record low in negative territory.The benchmark's yield was last trading at minus 0.01%. Bond yields move inversely to prices. The Japanese yen strengthened slightly following the central bank's rate decision to 113.02 per U.S. dollar. Yifan Xie contributed to this article. Write to Dominique Fong at Dominique.Fong@wsj.com Credit: By Dominique Fong
Subject: Central banks; Stock exchanges; Interest rates; Commodity prices; Investments; Profits
Location: Australia Japan China
Company / organization: Name: Congress; NAICS: 921120; Name: BNP Paribas; NAICS: 522110; Name: Bank of Japan; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: Markets
Publisher: Dow J ones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773084099
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773084099?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Loses Its Clout on U.K. Stock Index --- Energy sector's share of FTSE 100's market value has dwindled along with crude price
Author: Williams, Selina; Eisen, Ben
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Mar 2016: C.4.
Abstract:
The turmoil has been a particular blow for the U.K. economy and energy investors there. Since June 2014, London-listed oil companies and service companies in the FTSE's oil-and-gas index have lost around one-third of their value.
Full text: LONDON -- Not long ago, the oil sector was a powerhouse in the British blue-chip index. Nearly 24% of the total market value represented in the FTSE 100 in 2009 comprised oil drillers or oil-service companies. In 2016, the percentage is down to 12%. Only two oil companies are in the FTSE 100 -- BP PLC and Royal Dutch Shell PLC -- down from eight in 2012, when it was the biggest sector on the index. Energy stocks have never reached quite the same heights in big U.S. stock indexes, but a similar pattern has emerged in the S&P 500. Late last week, energy companies totaled $1.19 trillion, or 6.8%, of the $17.43 trillion index, compared with 11% at a recent peak in June 2014, according to S&P Dow Jones Indices. The oil companies' declining share of big indexes comes as crude prices have fallen more than 60% from a peak of $115 a barrel in mid-2014 amid a supply glut due to a U.S. oil boom and roaring production in the Organization of the Petroleum Exporting Countries. The price slump has slammed oil companies' revenue on both sides of the Atlantic, with more than 300,000 jobs lost globally in the energy sector. Chevron Corp. failed to turn a quarterly profit in the last three months of 2015, the first time that has happened in any quarter since 2002, while Anglo-Dutch giant Shell posted its worst earnings in a decade last year. The turmoil has been a particular blow for the U.K. economy and energy investors there. Since June 2014, London-listed oil companies and service companies in the FTSE's oil-and-gas index have lost around one-third of their value. Vanquished from the ranks of blue chips are British oil explorers such as Tullow Oil PLC and the companies that provide the equipment and engineering to extract oil and gas, such as Petrofac Ltd. and Amec Foster Wheeler PLC. Those firms had been propelled into the FTSE 100 by an oil-price boom, giving Tullow a market value of almost GBP 14.5 billion ($20.9 billion at today's exchange rates) at its height in February 2012. After oil prices began falling in June 2014, Tullow's value fell to GBP 2.9 billion by March 2015, when it exited the FTSE 100. On Friday, its market value was around GBP 1.9 billion. All of the companies that have fallen out of the FTSE 100 in the past year declined to comment. Three months before Tullow's exit from the FTSE 100, Chief Executive Aidan Heavey said it would be a temporary move. Aside from the prestige, a FTSE 100 listing can lift a company's share price, as the funds that track indexes have to buy the stock for their portfolio. It also makes it easier for the companies to issue debt and to raise capital by selling more shares. Oil-and-gas companies, along with mining companies, helped power up the FTSE 100 during the commodities boom in the years preceding the crash, said Tom Eliott, senior international investment strategist at advisory firm Devere Group, which has more than $10 billion in assets under advice and management. "Oil-and-gas companies [were] a major part in the FTSE's recovery after the 2008 financial crisis, but they would have also added a lot more volatility because of the closer exposure to commodity prices," he said. Index provider FTSE Russell declined to comment. Major stock indexes in the U.S. and Europe have risen and fallen with the price of crude in recent months, but the decline of energy stocks as a part of the whole suggest that oil may start to hold less sway for equities. "The longer it falls in price, the less impact it has on the overall market," said Sam Stovall, U.S. equity strategist at S&P Global Market Intelligence. During the boom, fund managers and analysts promoted the stocks. Such was the tidal wave of money that flowed through London's banks to the companies that it even lifted smaller exploration-and-production companies, known as E&Ps, such as Premier Oil PLC and Ophir Energy PLC into the FTSE 250, the next tier down. While Ophir is still in the FTSE 250, Premier dropped out in December, sliding into the small-cap index. Ophir CEO Nick Cooper said the sector urgently needs a fresh approach to regain investor confidence. "The E&P model is being severely questioned as the sector has, in general, failed to create material value for shareholders in recent years," Mr. Cooper said. Premier had no comment. "There was a lot of excitement around the explorers and the oil-services companies who were benefiting from the big oil companies' spending," said Chris Wheaton, a portfolio manager at Allianz Global Investors. "But you had to be careful not to get caught up in the hype." Credit: By Selina Williams and Ben Eisen
Subject: Commodity prices; Crude oil
Location: London England
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 15, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773136276
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shale Producers Can't Ramp Up Oil Output
Author: Sider, Alison; Dawson, Chester; Ailworth, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Mar 2016: A.1.
Abstract:
The U.S. Energy Information Administration estimates that U.S. oil output in February was down 600,000 barrels a day from last year's peak of close to 9.7 million barrels a day -- a 6% drop -- and some of the biggest U.S. shale producers have said they plan to curb production by another 10% this year.
Full text: The U.S. was supposed to be the world's new swing oil producer, able to nimbly open and close the taps in response to market forces, thanks to its bounty of shale fields. But as oil prices show some signs of stabilizing, American producers and oilfield-services companies are warning that they may not be able to jump-start drilling. The reason: Many independent companies are too financially strapped, have let go too many workers, or have idled too much equipment to immediately ramp up again. "The balance sheets of these shale-only producers have to be repaired for them to get back to drilling," said John Hess, the chief executive of Hess Corp. "That's going to curb any recovery." Just as U.S. output fell more slowly than predicted -- even as oil plunged from around $100 a barrel in 2014 to $30 -- it is likely to be slower in recuperating, even if prices rebound to $50 a barrel or more, some oil executives and analysts now say. More than three dozen U.S. oil and gas producers plan to cut their capital spending for 2016 by nearly half, on average, compared with last year, according to a Wall Street Journal analysis of company financial filings. Some of the largest U.S. oilfield-services firms have laid off 110,000 people in the past year, Evercore ISI analysts estimate, and many of those workers have no plans to return to the industry. Close to 60% of the fracking equipment in the U.S. has been idled during the downturn, according to IHS Energy, which estimates it would take two months for some of that equipment to return. It isn't clear that oil prices will continue their recent rally: Global crude prices fell 2.1% Monday to $39.53 as a tentative agreement by key members of the Organization of the Petroleum Exporting Countries to freeze production ran into obstacles. Still, even if prices return to levels where shale drillers can make money again, many companies are vowing to be cautious. Some are tempered by what occurred last spring, when producers jumped back into drilling new wells after oil prices briefly hit $60 a barrel, inadvertently worsening a supply glut that ultimately made prices worse. "At $40, I doubt we're going to see a lot of acceleration," said Taylor Reid, president and chief operating officer of Oasis Petroleum Inc., at an energy conference in Denver last week. One reason output remained robust last year is that drilling and fracking wells got cheaper. Producers leaned on services companies to cut costs, and certain wells were still profitable even at lower prices. But now many companies say they have cut as much as they can. In the Bakken Shale region, prices will need to be above $60 for benchmark West Texas Intermediate crude for at least three months before the area sees a meaningful uptick in drilling activity, said Lynn Helms, Director of North Dakota's Department of Mineral Resources. The U.S. Energy Information Administration estimates that U.S. oil output in February was down 600,000 barrels a day from last year's peak of close to 9.7 million barrels a day -- a 6% drop -- and some of the biggest U.S. shale producers have said they plan to curb production by another 10% this year. Experts such as IHS's Daniel Yergin have predicted that U.S. shale drillers would emerge as the world's new swing producers, stepping into a role traditionally filled by Saudi Arabia and other OPEC nations. The research firm said it still expects the U.S. will play that role in global markets, thanks to shale, but said current headwinds could delay a response to higher prices. U.S. oil producers have built up an inventory of drilled but un-fracked wells, a dormant source of oil that could translate into a quick burst of new supplies. But companies that want to put rigs back to work right away are likely to be limited by a smaller workforce and depleted equipment, which could make it difficult to coordinate a ramp-up. A recent survey by Hays PLC found that 72% of laid-off oil and gas workers around the world are looking for jobs in other industries. Basic Energy Services Inc., a fracking firm that has cut more than 40% of its workforce since the downturn began, has estimated that only one in five laid-off workers will return, taking with them the expertise they developed during the years when companies mastered techniques like drilling and fracking wells that extended thousands of feet horizontally underground. "We have lost a lot of good people. They won't be back," Chief Executive Roe Patterson said at a conference last week. Among those not planning to return to oil work is supply chain expert Brent Janezic, who worked for Schlumberger Ltd. for nearly five years. After transferring from Houston to Calgary in 2013 to oversee the Canadian unit's logistics and purchasing of the sand and nitrogen gas used in fracking, he lost his job last month. Now he is looking at companies in other industries that have large supply chains, where his skills could transfer easily. "I can't afford to wait idle on the sidelines for prices to recover," said Mr. Janezic, 33. "I've got to get things rolling." Some companies -- including Schlumberger, the world's largest oilfield-services firm -- are trying to manage their layoffs to head off what some see as a looming brain drain. Schlumberger has said some 1,700 of its young engineers with two or three years of experience are effectively on extended leave -- receiving some elements of salaries and benefits, but not costing the company much until they are needed again. "Quite a few of those guys have no problem taking a year off, traveling the world," said Patrick Schorn, Schlumberger's president of operations, at the Credit Suisse Annual Energy Summit last month. "When there is an upturn, those are the first guys we call back." Still, many new workers will have to be hired and trained -- a process that could take months, analysts say. And they will be working with rigs and pumps that have deteriorated or sometimes stripped apart to cheaply repair working equipment as it broke down. "Coming back this time is going to be tough, no question about it," said Tom Petrie, chairman of Petrie Partners, a boutique investment banking firm. "These cutbacks have been painful."
Credit: By Alison Sider, Chester Dawson and Erin Ailworth
Subject: Drilling; Oil shale; Crude oil prices; Petroleum industry; Petroleum production
Location: United States--US
Classification: 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Mar 15, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773150341
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773150341?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shorting Oil to Hedge Credit
Author: Berthelsen, Christian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Mar 2016: C.1.
Abstract:
Hedge funds that own poorly-performing high-yield debt issued by energy producers like Continental Resources Inc. and Chesapeake Energy Corp. have been shorting the market as a way to hedge against further declines in the bonds.
Full text: Some of the biggest bears in the oil market this year have been investors who are actually hoping to see the market recover. Hedge funds that own poorly-performing high-yield debt issued by energy producers like Continental Resources Inc. and Chesapeake Energy Corp. have been shorting the market as a way to hedge against further declines in the bonds. The paradoxical result is that these big investors are betting against themselves. On Monday, U.S. oil futures dropped 3.4% to $37.18 a barrel on the New York Mercantile Exchange. Blackstone Group LP's GSO Capital Partners and Apollo Global Management LLC are among many firms that have shorted oil to hedge their position in high-yield debt, according to people familiar with the matter. They are taking these actions because the previous mechanism for hedging oil-company debt, through contracts known as credit default swaps, is much less active, and the bonds have been hard to sell without taking steep losses. Instead these investors are having to hedge their debt positions by shorting oil prices, as a proxy. It's unclear how large the bond investors' short positions are, or how much they have weighed on the oil market. But they bring at least some pressure on oil prices and come from an unexpected source. The conditions in the credit market "have turned everyone to short positions in oil," said Jason Thomas, head of research for private-equity firm The Carlyle Group, in an interview. "It turns into a one-sided market, and that's where you have downward pressure on prices." The short positions weighed on the oil market during the deep downturn early this year, and helped intensify the recent rally in crude prices as investors unwound some of the hedges. Short positions in the benchmark U.S. crude contract reached a record last month. Mr. Thomas said in a recent note to clients that investment firms hedging by betting on falling oil prices could be undermining their own bond positions by keeping a lid on the market, which makes it harder for borrowers to pay back debt and "increases default risks." It's unclear if Carlyle is participating in the trade. Mr. Thomas declined to comment. At their peak, short trades had a market value of more than $5.8 billion and represented more than 190 million barrels of oil, about 10 days' worth of U.S. consumption. These short positions can weigh on oil prices, cutting into any price rebound. They can also make the market much more volatile, since traders might look to close these positions during market rallies, amplifying the gains. Oil prices have surged more than 40% over the past few weeks, wiping out some of these short positions. But bond investors are having to short the oil market because their previous vehicle for hedging has all but disappeared. Credit default swaps, a type of security used to guard against price declines in bonds, have dried up in the aftermath of the financial crisis, as tough new regulations have crimped banks' ability to take the other side of such risky trades. That's left investors without the most direct means of hedging their positions. Unlike the ability of investors in investment-grade debt to turn to credit indexes for risk protection, the lack of swaps available on high-yield names has made indexes a poor proxy to offset price declines, forcing the unusual turn toward the futures market. Investors in energy securities have suffered in the oil-market downturn, particularly those holding high-yield bonds. The pain is widespread: by some measures, energy companies comprise as much as a fifth of the high-yield universe. Overall, the nearly half-trillion dollars in outstanding energy debt is valued at about 65 cents on the dollar, though some high-yield names have gone for as little as 10 cents to 25 cents on the dollar. As a group, the bonds' value fell more than 19% between the start of the year and mid-February, according to the Bank of America Merrill Lynch High Yield Energy Index, before recovering somewhat since then. Credit: By Christian Berthelsen
Subject: Crude oil prices; Hedge funds; Bear markets
Location: United States--US
Company / organization: Name: Chesapeake Energy Corp; NAICS: 211111; Name: Apollo Global Management LLC; NAICS: 523920; Name: Blackstone Group LP; NAICS: 523110; Name: Continental Resources Inc; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Mar 15, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773150352
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773150352?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is pr ohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Treasurys Boosted by Data, Lower Oil
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract: None available.
Full text: Treasurys extend Monday's price gain as lower oil prices remain a point of support. In addition, tepid February consumer spending and tame PPI point to caution in the U.S. growth outlook. While the central bank is likely to signal tomorrow that the tightening campaign is on track, the timing continues to hinge on upcoming releases and financial-market performance. The 10-year yield is at 1.924%, versus 1.963% Monday, while the 2-year eases to 0.94% from 0.959%. Write to Min Zeng at min.zeng@wsj.com Credit: By Min Zeng
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773185725
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773185725?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Drop on Oversupply Worries; After more than a month of gains, crude has returned to a more negative track
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
Related * Oil Output Negotiations Hit Obstacles (March 14) * OPEC Says Crude Production Fell in February (March 14) * 'Critical Mass' of Oil-Producing Countries Agree to Freeze Production (March 1) Citigroup analysts on Monday had attributed a lot of the move simply to fast-moving fund managers taking extreme positions.
Full text: Oil prices retreated Tuesday and a monthlong rally is faltering as traders return their focus to a heavy oversupply in storage. Light, sweet crude for April delivery settled down 84 cents, or 2.3%, to $36.34 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 79 cents, or 2%, to $38.74 a barrel on ICE Futures Europe. After more than a month of gains, crude is now down in three of the last four sessions. Both the U.S. and global benchmarks are down nearly 6% from the calendar year highs they settled at last week. There have been some bullish signs on declining supply and surging demand, but not enough to fundamentally alter a market that has been oversupplied and crashing for nearly two years, analysts said. Of the three major international agencies that recently released updated outlooks, none tightened their forecast for oversupplied markets, Dominick Chirichella, analyst at the Energy Management Institute, said in a note. "The market is in a reality check," he added. Related * Oil Output Negotiations Hit Obstacles (March 14) * OPEC Says Crude Production Fell in February (March 14) * 'Critical Mass' of Oil-Producing Countries Agree to Freeze Production (March 1) Citigroup analysts on Monday had attributed a lot of the move simply to fast-moving fund managers taking extreme positions. By the end of the first week of March, hedge funds, pension funds and others had doubled their net-bullish position on U.S. oil in just two months, and set a record for their number of bullish bets on Brent. Prices had followed, up 20% in that period. Many analysts attributed that rally to a process called short covering, in which bearish traders close their positions, but have to buy back contracts to do it, sending prices higher. That support for prices appears to be ending because bearish traders have fewer reasons to flee the market, said Matt Smith, director of commodity research at ClipperData. "Now the short squeeze appears to have run its course...just as hopes of a coordinated production cut are extinguished," Mr. Smith said. Talk of a freeze from giant oil producers including Russia and Saudi Arabia had been among the rally's biggest drivers but members of the Organization of the Petroleum Exporting Countries can't agree on key issues for a potential freeze agreement--or even when and where to discuss it. OPEC's March report, released Monday, also lowered its demand forecast for its crude this year by 90,000 barrels a day to 31.52 million barrels. In Iraqi Kurdistan, the Ceyhan pipeline closed in mid-February due to an attack, taking oil off the market. But the pipeline is likely to restart operation soon and transports around 600,000 barrels of oil a day to Turkey, according to January data from the Kurdistan Regional Government in Iraq. The amount of oil in U.S. stockpiles, already hovering around a historic high, is likely to have increased again last week, according to analysts surveyed by The Wall Street Journal. They expect the Energy Information Administration to report Wednesday that crude stockpiles rose by 3.3 million barrels in the week ended March 11. They do, however, expect falling supplies of gasoline and distillates, which includes heating oil and diesel fuel. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 1.5-million-barrel increase in crude supplies, a 1.2-million-barrel decrease in gasoline stockpiles and an 830,000-barrel decline in distillate inventories, according to market participants. Demand from drivers has surged in the U.S., but it is unclear whether that will continue to boost the crude market, analysts said. Refineries are likely to start long-deferred maintenance in the next few weeks, and that shutdown could limit their demand for oil, even while gasoline and diesel prices are likely to keep getting support from the limited supply, analysts at Wolfe Research LLC said in a note released overnight. "All that maintenance work can't be indefinitely postponed," they said. "There remains a significant threat to crude." Gasoline futures settled down 1.44 cents, or 1%, to $1.4082 a gallon. Diesel futures fell 1.88 cent, or 1.6%, to $1.1777 a gallon. Miriam Malek contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Petroleum industry; Price increases
Location: United States--US
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Critical Mass; NAICS: 541810; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773190010
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773190010?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Circle Oil Shares Fall After Company Launches Strategic Review; Shares in Circle Oil fell after the troubled oil and gas explorer said it has hired Investec Bank to initiate a strategic review of its business.
Author: MacDonald, Alex
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
Circle Oil also reaffirmed that its cash flows and financial position remain "under significant pressure," primarily due to the uncertainty and irregularity of U.S. dollar receipts from Egypt's state-owned Egyptian General Petroleum Corp. As of the end of last year, Circle Oil had $31 million in cash and receivables and debt of $77.5 million plus another $14.1 million in trade credits.
Full text: LONDON--Shares in Circle Oil PLC (COP.LN) fell Tuesday after the troubled oil and gas explorer said it has hired Investec Bank PLC to initiate a strategic review of its business to reduce its debt load given difficulties in generating enough cash amid lower oil prices. The U.K.-listed firm with operations in Egypt and Morocco also said it has secured an extension on a loan repayments of $57.5 million owed to the International Finance Corp. to April 15 and added the IFC is willing to consider further waivers, if necessary, to help expedite the strategic review. The review will consider a sale of one or more of the company's existing assets, a merger with a third party, a full outright sale of all its shares and the raising of capital through the issuance of new shares, the company said. Circle Oil also reaffirmed that its cash flows and financial position remain "under significant pressure," primarily due to the uncertainty and irregularity of U.S. dollar receipts from Egypt's state-owned Egyptian General Petroleum Corp. As of the end of last year, Circle Oil had $31 million in cash and receivables and debt of $77.5 million plus another $14.1 million in trade credits. At 0852 GMT, the company's shares were down 9.5% at 2.375 pence a share. Write to Alex MacDonald at alex.macdonald@wsj.com Credit: By Alex MacDonald
Subject: Acquisitions & mergers
Location: Morocco United States--US United Kingdom--UK Egypt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Econ omics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773190021
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773190021?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Pressures Build in Oil-Shipping Business; Coming wave of big tankers, possible tighter supplies could push industry's rates lower
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
More than 40% of those new vessels will be among the largest class of tankers, known as Very Large Crude Carriers, or VLCCs, massive ships that can each ferry more than 2 million barrels of oil, enough to fill 140 Olympic swimming pools or meet Germany's oil needs for a day. "If there is a significant pickup in floating storage, then tanker rates could very quickly spike up again and quickly take tanker-loading capacity out of the market," said Erik Broekhuizen, head of tanker research at Poten & Partners.\n
Full text: A wave of new tanker construction and the prospect of tighter oil supplies are putting pressure on the booming business of shipping oil, a rare bright spot for the global maritime industry. Low oil prices and surging production has been a boon for the 2,000-vessel-strong oil-tanker business. The cost to charter tankers soared to near-records last year, while low fuel prices have boosted the profitability of ships. One sign of the good times: Many ports are so congested with crude vessels that tankers are plying their routes at a slower pace. The average tanker in recent months has cut its speed by 10%, on average, to minimize downtime, said Paddy Rodgers, chief executive of the big Belgian fleet operator Euronav NV. But analysts and ship brokers are forecasting choppier waters ahead for the hundreds of companies that ferry oil around the world. Built mainly in Asia's vast shipyards, that fleet is set to expand by more than 200 new tankers through 2017, the fastest pace of new shipbuilding in four years, according to Drewry Maritime Research. More than 40% of those new vessels will be among the largest class of tankers, known as Very Large Crude Carriers, or VLCCs, massive ships that can each ferry more than 2 million barrels of oil, enough to fill 140 Olympic swimming pools or meet Germany's oil needs for a day. A further one-third will be in the so-called Suezmax segment, the next-largest ships. Suezmax vessels are the biggest capable of plying the Suez Canal. Those new ships--queued up when capacity was tighter--are expected to push shipping rates lower, and come as recent shifts in the oil market are working against oil shippers. Oil prices are on the rise again, and major oil producers are signaling a willingness to at least discuss the possibility of a production freeze . U.S. oil output is falling , while the International Energy Agency says demand growth is slowing . Taken together, that means that the world-wide crude glut, which has delivered a windfall for tanker operators, could begin to shrink. Some tanker leasing rates have already started to wane. The Baltic Dirty Tanker Index, a benchmark for tanker rates, has fallen 40% from a recent high in early July. Drewry expects one-year leasing rates for VLCCs to fall 6% this year, after they rose almost three-fourths to $46,500 a day in 2015. "Crude prices can only stay low for so long," said Denis Petropoulos, group president of Asia at Braemar Shipping Services PLC, a London-headquartered ship brokerage. "There is a lot of new [tanker] building over the next two years, and those ships entering the market are eventually likely to affect rates, regardless of crude prices." The clutch of new tanker construction was meant to address a recent squeeze in oil vessels. During the financial crisis, the oil-tanker business struggled as global crude demand dried up. But a quick recovery in demand, soaring U.S. output and steady supplies from large oil exporters stoked a swift recovery. The recovery in the tanker business coincided with a yearslong shift eastward in the global oil trade. A reduction in U.S. oil imports has diverted crude from the Middle East and Africa toward thirsty new demand centers in Asia. Those routes tend to be longer, lengthening the average oil tanker's voyage, tying up ships for longer periods and boosting tanker rates, they said. "As earnings improved in 2014 to [2015], the tanker industry embarked on a major ordering spree and [that's] the primary reason why we expect rates to soften this year," said Rahul Kapoor, director of equity research at Drewry. Tanker owners say the market can handle the wave of new ships, and point to other reasons to stay optimistic about their business. The recent lifting of the U.S. oil-export ban stands to boost tanker chartering if exports take off, they say. Firm crude demand from China continues to prop up tanker demand, and has led to congestion in some ports that can leave a ship waiting weeks to unload its cargo. "There is already an element of storage at sea," said Mr. Rodgers, the Euronav CEO, who added that short-term tanker rates have climbed after an early-year slowdown. A wild card for the industry is demand for so-called floating storage, in which producers and traders sock away spare oil in tankers to sell it later at a profit. About 32 million barrels were tied up in floating storage as of March 11, according to estimates by Thomson Reuters, down by almost half from recent highs in November. "If there is a significant pickup in floating storage, then tanker rates could very quickly spike up again and quickly take tanker-loading capacity out of the market," said Erik Broekhuizen, head of tanker research at Poten & Partners. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Tankers; Petroleum industry; Ships
Location: United States--US Asia
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773190051
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773190051?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Lastupdated: 2017-11-23
Database: The Wall Street Journal
Obama Administration Withdraws Atlantic Oil and Gas Drilling Proposal; Reversal is part of the latest offshore leasing plan
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
Related * Obama Administration Proposes Cutting Methane Waste from Oil, Natural Gas Production (Jan. 22) * Obama Halts Most New Coal-Mining Leases on Public Lands (Jan. 15) * Obama Administration Proposes New Offshore Drilling Rules (April 2015) "Today's announcement is an opportunity to work with the Department of Defense to address the concerns they have raised, and to ensure that any offshore energy exploration is coupled with a revenue-sharing agreement that benefits our commonwealth," Mr. McAuliffe said.
Full text: WASHINGTON--The Obama administration, in a significant reversal, announced Tuesday it was withdrawing a planned oil and natural gas lease sale off the southeast Atlantic coast, prompting cheers from coastal communities and environmentalists but criticism from oil companies and some state leaders. In the Interior Department's latest offshore leasing blueprint, released Tuesday, the government removed the one lease sale it had last year initially planned to offer in 2021 in the waters between Virginia and Georgia. Interior Secretary Sally Jewell said the department acted in part out of concerns by the Defense Department that drilling could interfere with its military operations along the coast. Pentagon officials had submitted comments earlier in the process expressing their reservations. "We heard from many corners that now is not the time to offer oil and gas leasing off the Atlantic coast," Ms. Jewell said. "When you factor in conflicts with national defense, economic activities such as fishing and tourism, and opposition from many local communities, it simply doesn't make sense to move forward with any lease sales in the coming five years." The move is part of a broader push by President Barack Obama to pursue an ambitious climate-change legacy, which also includes the first-ever federal rules limiting carbon emissions on power plants and a host of other environmental regulations clamping down on pollution from the oil, natural gas and coal industries. The Interior Department's blueprint, required by law every five years, governs offshore leasing for oil and natural gas drilling in federal waters between 2017 and 2022, including the Arctic Ocean and Gulf of Mexico. Three lease sales planned for the federal waters around Alaska, which have also been controversial, along with 10 in the Gulf of Mexico, remain in the plan. Those sales could be removed before the proposal is finalized, but no new sales can be added. Obama administration officials say they intend to complete the plan, which is subject to a 90-day public comment period, before the next president is sworn into office. If the plan isn't complete by Mr. Obama's departure on Jan. 20, 2017, the plan's final touches--or, potentially, a complete rewrite or withdrawal--would be left to the next president. Democratic candidates Hillary Clinton and Bernie Sanders have opposed offshore drilling, especially along the Atlantic Coast, while Republican presidential candidates, including Sens. Ted Cruz of Texas and Marco Rubio of Florida, support increasing oil drilling, including offshore. Still, the politics of offshore drilling don't always divide so neatly along partisan or ideological lines. Some conservative communities along the coast join environmental groups in opposing drilling, for example, citing the importance of tourism to their economies. "This is a victory for people over politics and shows the importance of old-fashioned grassroots organizing," said Jacqueline Savitz, a vice president at Oceana, a conservation group that helps organize coastal communities to oppose offshore drilling. "It will prevent oil spills and coastal industrialization." Some Democratic politicians, including Gov. Terry McAuliffe and Sen. Mark Warner, both of Virginia, have supported offshore drilling if their states could get a cut of the eventual royalty revenue. In statements Tuesday, Messrs. Warner and McAuliffe struck cautious notes. Related * Obama Administration Proposes Cutting Methane Waste from Oil, Natural Gas Production (Jan. 22) * Obama Halts Most New Coal-Mining Leases on Public Lands (Jan. 15) * Obama Administration Proposes New Offshore Drilling Rules (April 2015) "Today's announcement is an opportunity to work with the Department of Defense to address the concerns they have raised, and to ensure that any offshore energy exploration is coupled with a revenue-sharing agreement that benefits our commonwealth," Mr. McAuliffe said. Most major oil companies reached for comment deferred to the American Petroleum Institute, the U.S.'s largest oil and gas trade group, which sharply criticized the move. "The decision appeases extremists who seek to stop oil and natural gas production, which would increase the cost of energy for American consumers and close the door for years to creating new jobs, new investments and boosting energy security," said Jack Gerard, head of the group. Royal Dutch Shell, which has expressed interest in oil and gas development in the Atlantic and recently abandoned a multibillion-dollar effort to find oil in the Arctic, also criticized the move. "The administration's decision to omit new offshore acreage in the Atlantic is shortsighted and dismissive of the safe, responsible offshore exploration that has provided jobs, revenue and energy security for the U.S. for more than a half century," said spokesman Curtis Smith. The Interior Department estimates that there are almost 3.5 billion barrels of recoverable oil off the Atlantic Coast and more than 30 trillion cubic feet of natural gas, though energy industry officials say there could be much more. The U.S. consumes nearly 20 million barrels of petroleum products a day and nearly 30 trillion cubic feet of natural gas a year, according to the U.S. Energy Information Administration. Today's energy landscape is far different from the backdrop for the Obama administration's last plan, in 2010. U.S. oil production has increased 64% since 2009, to more than 9 million barrels of oil a day, thanks largely to the increased production onshore driven by hydraulic fracturing, according to U.S. government data. Due to this new U.S. supply and weaker-than-expected economic growth in Asia, global oil prices have plummeted to under $30 a barrel since the summer of 2014 and are now hovering just below $40, resulting in lower prices at the pump that have sharply reduced the political pressure to allow extensive oil and gas drilling. Write to Amy Harder at amy.harder@wsj.com Credit: By Amy Harder
Subject: Offshore drilling; Natural gas; Petroleum industry; Grass roots movement; Tourism; Sales; Coasts; Community; Revenue sharing
Location: Virginia
People: Obama, Barack Sanders, Bernard Rubio, Marco Clinton, Hillary
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773236755
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773236755?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Linn Energy Says Bankruptcy May Be 'Unavoidable'; Oil, gas producer to skip $60 million interest payments on bonds maturing in 2021, 2022
Author: Gleason, Stephanie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
Linn is taxed as a master limited partnership, or MLP, rather than a corporation, a popular arrangement among energy companies when oil prices were soaring.
Full text: Linn Energy LLC warned Tuesday that a chapter 11 bankruptcy filing may be "unavoidable" for the oil and gas producer. The company said it has hired financial and legal advisers "to address our liquidity and capital structure, including strategic and refinancing alternatives through a private restructuring," but added that bankruptcy may be its only option. The warning in the company's financial statement came alongside an announcement that it would skip $60 million in interest payments on bonds maturing in 2021 and 2022 and would enter a 30-day grace period. If the interest isn't paid within the grace period, Linn could trigger a default. Earlier this month, The Wall Street Journal reported that Linn was looking for ways to change its corporate structure as a debt restructuring appeared imminent. Linn is taxed as a master limited partnership, or MLP, rather than a corporation, a popular arrangement among energy companies when oil prices were soaring. But that structure could trigger a tax hit for investors when the company restructures. Linn's MLP status allowed income to flow straight through to investors without the Internal Revenue Service taking a cut at the corporate level, allowing Linn to distribute billions of dollars of cash to investors. But now, investors with potentially worthless shares--or units, as they are known--may owe taxes on debt that is forgiven in a bankruptcy. As distress has spread through the oil and gas industry, which has been crippled by persistently low prices, many are watching Linn's attempt to restructure and resolve issues related to this MLP structure. However, Linn said Tuesday that a bankruptcy filing could cause its units to be canceled, resulting in little or no recovery for holders. Over all, Linn Energy reported a loss of $2.47 billion, or $7.05 a unit, for the fourth quarter compared with a loss of $154.5 million, or 47 cents a unit, a year earlier. The company booked $3 billion in noncash impairment charges during the quarter, $83 million in noncash losses related to changes in the fair value of unsettled commodity derivatives and $506 million on the extinguishment of debt. Revenue dropped to $647 million from $2.2 billion a year earlier. Analysts polled by Thomson Reuters had forecast earnings of 14 cents a unit on $748 million in revenue. As of Feb. 29, Linn said it had less than $1 million available under its credit facility. The company has $9 billion in debt over all, which, together with its other obligations, carries $4.2 billion in payments due in 2016. The Houston-based company focuses its exploration and production efforts in the Colorado Rockies, California, Hugoton Basin, Mid-Continent, Permian Basin, east Texas and north Louisiana, Michigan, Illinois and South Texas. Liz Hoffman, Matt Jarzemsky, Laura Saunders and Anne Steele contributed to this article. Write to Stephanie Gleason at stephanie.gleason@wsj.com Credit: By Stephanie Gleason
Subject: Master limited partnerships; Debt restructuring; Bankruptcy; Losses; Energy industry
Location: California
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Linn Energy LLC; NAICS: 211112; Name: Internal Revenue Service--IRS; NAICS: 921130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773243942
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773243942?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
India Pushes to Secure Oil, Gas Assets, Explore Reserves; India's minister of state for petroleum and natural gas says country is seeking to take advantage of geopolitical scenario
Author: Agarwal, Vibhuti
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
NEW DELHI--Amid the tumble in global crude-oil prices, India is accelerating a push to secure overseas oil and gas assets while taking a series of steps to encourage more exploration and development of its own reserves, the country's oil minister said.
Full text: NEW DELHI--Amid the tumble in global crude-oil prices, India is accelerating a push to secure overseas oil and gas assets while taking a series of steps to encourage more exploration and development of its own reserves, the country's oil minister said. "We are taking advantage of the changing geopolitical scenario," Dharmendra Pradhan, minister of state for petroleum and natural gas, said in an interview. "We are eyeing huge overseas investment." With lower crude prices making investments in energy development abroad more affordable, India has asked state enterprises to look for deals with resource-rich nations such as Russia, Saudi Arabia, the United Arab Emirates and, now that international sanctions have lifted, Iran. Mr. Pradhan said the overseas investment arm of India's state-run Oil & Natural Gas Corp. Ltd. is expected to finalize a deal to acquire a 15% stake in an oil-and-gas block run by Russian state-run oil company OAO Rosneft by the end of the month. The Indian company agreed in September to pay up to $1.3 billion for the stake in the Vankor oil field, one of Rosneft's largest , in Siberia. Mr. Pradhan said India is considering seeking to increase the size of its stake in the future. ONGC is also pursuing talks with Iranian state company Pars Oil and Gas Co. to resume participation in a $10 billion gas project, Mr. Pradhan said. Indian companies, including ONGC have also been active in Africa. To boost development of India's domestic hydrocarbon reserves, its government last week approved policy changes aimed at making the sector more attractive to investors. From now on, Mr. Pradhan said, companies would be able to bid for exploration and production rights for all hydrocarbons in blocks of their choosing. Companies would enter into a revenue-sharing agreement with the government, rather than the current profit-sharing mechanism. They would have more freedom to set sales prices for their output, subject to caps determined by the prices of a basket of alternative fuels. "Our aim is to boost investment, enhance production, create employment and reduce administrative discretion," Mr. Pradhan said. "This is one of the big bang reforms everyone has been expecting from Prime Minister Narendra Modi." India is the world's third-biggest energy consumer and imports roughly 75% of its oil. Global crude has fallen to nearly 12-year lows this year under pressure from a deepening supply glut and signs of economic weakness in China, the world's second-biggest oil consumer. On Monday, the U.S. contract ended down 3.4% at $37.18 a barrel on the New York Mercantile Exchange, while the Brent contract settled down 2.1% at $39.53 a barrel on the ICE Futures Europe exchange. Mr. Pradhan said India is the most important driver of energy demand growth in the world, thanks to its rapidly rising oil consumption. "India is the market the world is looking at in the future," Mr. Pradhan said. Write to Vibhuti Agarwal at vibhuti.agarwal@wsj.com Credit: By Vibhuti Agarwal
Subject: Petroleum industry; Oil consumption; Natural gas utilities
Location: Iran India Russia United Arab Emirates Saudi Arabia
People: Modi, Narendra
Company / organization: Name: OAO Rosneft; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
column: India News
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773243952
Document URL: https://login.ezproxy.uta.edu/login?url=htt ps://search.proquest.com/docview/1773243952?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Crude-Oil Stocks Seen Increasing in DOE Data
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 1.5-million-barrel increase in crude supplies, a 1.2-million-barrel decrease in gasoline stocks and an 830,000-barrel decline in distillate inventories, according to market participants.
Full text: U.S. crude-oil stocks are expected to be shown to have increased in data due on Wednesday from the Department of Energy, according to a survey of analysts by The Wall Street Journal. Estimates from 11 analysts surveyed show U.S. oil inventories are projected to have increased by 3.3 million barrels, on average, in the week ended March 11. All 11 analysts expect stockpiles to rise. Forecasts range from an increase of 1.5 million barrels to an increase of 5 million barrels. The closely watched survey from the Energy Information Administration is due at 10:30 a.m. EST on Wednesday. Gasoline stockpiles are expected to have declined 2.6 million barrels, according to the analysts, all 11 of whom expect a decline. Estimates range from a fall of 4 million barrels to a fall of 4 million barrels. Stocks of distillates, which include heating oil and diesel, are expected to have fallen 800,000 barrels. Eight analysts expect a decline, two expect a rise and one expects no change. Forecasts range from a decline of 2.5 million barrels to an increase of 1 million barrels. Refinery use is seen to have fallen 0.4 percentage point to 88.7% of capacity, based on EIA data. Three analysts expect a rise, six expect a decline, one expects no change and one didn't report expectations. Forecasts range from a decrease of 1.5 points to an increase of 0.5 point. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 1.5-million-barrel increase in crude supplies, a 1.2-million-barrel decrease in gasoline stocks and an 830,000-barrel decline in distillate inventories, according to market participants. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Petroleum industry; Inventory; Supply & demand
Location: United States--US
Company / organization: Name: Department of Energy; NAICS: 926130; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773289031
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773289031?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
'Keep It in the Ground'; Obama reneges on his offshore oil lease off the Atlantic coast.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Mar 2016: n/a.
Abstract:
Climate-change activists once believed they could tolerate fossil fuels as long as their price was high enough to make wind and solar power competitive.
Full text: Climate-change activists once believed they could tolerate fossil fuels as long as their price was high enough to make wind and solar power competitive. But these days the climate left's agenda is to "keep it in the ground," as the green slogan goes, and on Tuesday the Obama Administration followed orders. The Interior Department announced it is withdrawing a planned oil and natural gas lease sale off the southeast Atlantic coast. The feds will no longer offer the lone lease sale they had planned for the waters between Virginia and Georgia in 2021. The Administration said it will go ahead with three lease sales around Alaska and 10 off the Gulf of Mexico coast, but don't be surprised if those are eventually killed too. No new sales can be added under Interior's plan. The withdrawal is a sucker punch to southeast U.S. politicians, who had welcomed oil and gas exploration as a boon to high-paying jobs and energy self-sufficiency. That includes Virginia's Democratic Gov. Terry McAuliffe, who tried to spin this as a mere prudent pause. "Today's announcement is an opportunity to work with the Department of Defense to address the concerns they have raised, and to ensure that any offshore energy exploration is coupled with a revenue-sharing agreement that benefits our commonwealth," Mr. McAuliffe said in a statement. Sorry, Governor, the Pentagon's concerns are political cover. Unless a Republican wins the White House this year, drilling off Virginia is dead. Mr. McAuliffe's candidate, Hillary Clinton, also wants to keep it all in the ground. Meanwhile, the news thrilled the Sierra Club and Oregon Senator Jeff Merkley, who said in a statement that "if we are to stop catastrophic climate change, we need to act without delay to keep fossil fuels in the ground." All of which underscores the energy radicalism that now dominates the Democratic Party. Its activists don't want the U.S. to produce any oil and gas at all--none.
Subject: Fossil fuels; Natural gas; Climate change
Location: United States--US Virginia Georgia Alaska Gulf of Mexico
People: Merkley, Jeff Clinton, Hillary
Company / organization: Name: Democratic Party; NAICS: 813940; Name: Sierra Club; NAICS: 813312; Name: Department of Defense; NAICS: 928110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 15, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773305322
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773305322?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. News: Reversal on Atlantic Drilling --- Obama administration pulls sale of offshore oil lease in Southeast; energy firms critical
Author: Harder, Amy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Mar 2016: A.3.
Abstract:
The Interior Department estimates that there are almost 3.5 billion barrels of recoverable oil off the Atlantic Coast and more than 30 trillion cubic feet of natural gas, though energy industry officials say there could be much more.
Full text: WASHINGTON -- The Obama administration said Tuesday that it was withdrawing a planned oil and natural gas lease sale along the southeastern Atlantic coast, a significant reversal that prompted cheers from coastal communities and environmentalists but criticism from oil companies and some state leaders. In the Interior Department's latest offshore leasing blueprint, the government removed the one lease sale it had last year initially planned to offer in 2021 in the waters between Virginia and Georgia. Interior Secretary Sally Jewell said the department acted in part out of concerns by the Defense Department that drilling could interfere with its military operations along the coast. Pentagon officials had submitted comments earlier in the process expressing their reservations. "We heard from many corners that now is not the time to offer oil and gas leasing off the Atlantic coast," Ms. Jewell said. "When you factor in conflicts with national defense, economic activities such as fishing and tourism, and opposition from many local communities, it simply doesn't make sense to move forward with any lease sales in the coming five years." The Interior Department estimates that there are almost 3.5 billion barrels of recoverable oil off the Atlantic Coast and more than 30 trillion cubic feet of natural gas, though energy industry officials say there could be much more. Most major oil companies reached for comment deferred to the American Petroleum Institute, the U.S.'s largest oil and gas trade group, which criticized the move. "The decision appeases extremists who seek to stop oil and natural gas production, which would increase the cost of energy for American consumers and close the door for years to creating new jobs, new investments and boosting energy security," said Jack Gerard, head of the group. The move is part of a broader push by President Barack Obama to pursue an ambitious climate-change legacy, which also includes the first-ever federal rules limiting carbon emissions on power plants and a host of other environmental regulations clamping down on pollution from the oil, natural gas and coal industries. The Interior Department's blueprint, required by law every five years, governs offshore leasing for oil and natural gas drilling in federal waters between 2017 and 2022, including the Arctic Ocean and Gulf of Mexico. Three lease sales planned for the federal waters around Alaska, which have also been controversial, along with 10 in the Gulf of Mexico, remain in the plan. Those sales could be removed before the proposal is finalized, but no new sales can be added. Obama administration officials say they intend to complete the plan, which is subject to a 90-day public comment period, before the next president is sworn into office. If the plan isn't complete by Mr. Obama's departure on Jan. 20, 2017, the plan's final touches -- or, potentially, a complete rewrite or withdrawal -- would be left to the next president. Democratic candidates Hillary Clinton and Bernie Sanders have opposed offshore drilling, especially along the Atlantic Coast, while Republican presidential candidates, including Sens. Ted Cruz of Texas and Marco Rubio of Florida, support increasing oil drilling, including offshore. Still, the politics of offshore drilling don't always divide so neatly along partisan or ideological lines. Some conservative communities along the coast join environmental groups in opposing drilling, for example, citing the importance of tourism to their economies. "This is a victory for people over politics and shows the importance of old-fashioned grass-roots organizing," said Jacqueline Savitz, a vice president at Oceana, a conservation group that helps organize coastal communities to oppose offshore drilling. "It will prevent oil spills and coastal industrialization." Some Democratic politicians, including Gov. Terry McAuliffe and Sen. Mark Warner, both of Virginia, have supported offshore drilling if their states could get a cut of the eventual royalty revenue. In statements Tuesday, Messrs. Warner and McAuliffe struck cautious notes. "Today's announcement is an opportunity to work with the Department of Defense to address the concerns they have raised, and to ensure that any offshore energy exploration is coupled with a revenue-sharing agreement that benefits our commonwealth," Mr. McAuliffe said. Credit: By Amy Harder
Subject: Natural gas; Petroleum industry; Coasts; Energy industry; Offshore drilling; Energy policy
Location: Virginia Georgia Atlantic Ocean United States--US
People: Obama, Barack
Classification: 9190: United States; 8510: Petroleum industry; 1520: Energy policy
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.3
Publication year: 2016
Publication date: Mar 16, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773381429
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773381429?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudis Open to Oil-Production Freeze Without Iran; 15 OPEC and non-OPEC producers support the Doha initiative to limit output even if Iran doesn't follow suit
Author: Said, Summer; Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Mar 2016: n/a.
Abstract:
According to OPEC's figures, Iran's crude production has risen by 245,000 barrels a day in the past two months--half the increase the country pledged immediately after sanctions were lifted.
Full text: DUBAI--Saudi Arabia, Kuwait and their allies would limit their oil output even if Iran doesn't follow suit, OPEC officials said, a change in tone that paves the way for curbs on crude production to be set next month. The evolving position emerged after Qatar said Wednesday that it would host a meeting on April 17 in Doha for oil producers both inside and outside the Organization of the Petroleum Exporting Countries, the cartel that controls a third of the world's crude production. The meeting would be a follow-up to a Feb. 16 pact among Saudi Arabia, Russia, Qatar and Venezuela to freeze their output at January levels in a bid to bring oil supply back in line with demand and raise prices that hit 12-year lows this year. On any given day, global oil supply of about 96 million barrels outstrips demand by almost two million barrels. Oil prices rose on Wednesday's announcement . Brent crude, the international benchmark, was up 78 cents a barrel, or 2%, at $40.17 in London trading Wednesday afternoon. Saudi Arabia and its allies in the Middle East had said any agreement would be off if Iran refused to participate, but oil prices as low as $27 a barrel this year have hurt the Saudi economy and put domestic political pressure on the kingdom to move forward anyway, OPEC officials said. Iran's refusal is "not a deal beaker," said an OPEC official from a Persian Gulf Arab country. An agreement would have limited impact if it didn't include Iran, the world's seventh-largest oil producer trying to ramp up its output now that international sanctions have ended . Iran's oil minister, Bijan Zanganeh, has said his country won't consider joining until its production reaches four million barrels a day, up from about 3.2 million barrels a day currently. Mr. Zanganeh had initially expressed support for the freeze without committing to it. But after Saudi oil minister Ali al-Naimi appeared to insist at a Houston conference last month that Iran join the cap, Mr. Zanganeh publicly attacked the deal as "a joke" and said other producers should "leave us alone." The Qatari oil ministry said 15 OPEC and non-OPEC producers supported a production freeze, accounting for 73% of global oil output. The Qataris didn't say which members would attend the meeting in April, and officials in several countries involved said they hadn't been notified formally of the gathering. Analysts have said the Feb. 16 pact is largely symbolic. Data from the International Energy Agency show production from the 15 countries discussing a cap would decline even without a freeze. The combined output of the group will drop by 200,000 barrels a day in 2016 because of investment cuts and lackluster demand, according to data from the agency, which monitors global energy trends. Saudi Arabia and its allies still want Iran to put the brakes on its output, but no longer want its opposition to stand in the way of a deal seen as helping the kingdom during dark economic times. Saudi Arabia ran a record budget deficit last year and drew down its foreign reserves to around $602 billion at the end of January. Riyadh has reduced popular energy subsidies and is now seeking $8 billion in loans from international banks . Saudi Arabia and Iran represent different strains of Islam, Sunni and Shiite, respectively, and have been at odds over a host of issues, backing different sides in Syria's civil war. Riyadh cut off diplomatic ties with Iran this year after its embassy was attacked by protesters in Tehran following the execution of a prominent Shiite cleric. A Kuwaiti oil official said Iran's oil return "has been smaller and slower" than expected. According to OPEC's figures, Iran's crude production has risen by 245,000 barrels a day in the past two months--half the increase the country pledged immediately after sanctions were lifted. "It would be good if they joined, but if not, it's not a big deal," the Kuwaiti official said. The positioning comes after oil prices have rallied more than 20% since the Feb. 16 production-freeze pact was announced, also in Doha. In a news release Wednesday, the Qatari oil ministry called that agreement the "Doha initiative" and credited it with changing sentiment in the oil market. The pact "put a floor under the oil price," said the Qatari oil ministry. "This has triggered a broad and intensive dialogue between all oil producers out of the conviction that current oil prices aren't sustainable." Qatar holds the rotating presidency of OPEC this year and has been coordinating the effort. Write to Summer Said at summer.said@wsj.com and Benoit Faucon at benoit.faucon@wsj.com Corrections & Amplifications Iran is the world's seventh-largest oil producer. Earlier versions of this article mistakenly said the country is the world's fifth-largest producer. Credit: By Summer Said and Benoit Faucon
Subject: Petroleum industry; Cartels; Crude oil; Diplomatic & consular services; Crude oil prices
Location: Qatar Iran Kuwait Saudi Arabia
People: Naimi, Ali I
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 16, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773395354
Document URL: https://login.ezproxy.uta.edu/ login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773395354?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil-Price Collapse Fuels Singapore Layoffs; Last year was Singapore's worst for layoffs since the global financial crisis, and oil-rig makers felt the pain
Author: Jake Maxwell Watts; Saurabh Chaturvedi; Jake Maxwell Watts; Chaturvedi, Saurabh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Mar 2016: n/a.
Abstract: None available.
Full text: SINGAPORE--In Singapore's worst year for layoffs since the global financial crisis, workers at offshore-marine companies were significant victims--a sign of how reeling oil prices have scuttled a key part of the country's economy. Singapore lost over 5,200 manufacturing jobs in 2015, 22% more than in 2014, with 1,680 of those lost jobs at companies producing fabricated metal products, machinery and equipment, including oil rigs. The island city-state is the world's largest maker of jack-up rigs, or mobile platforms used to drill for oil at sea, and its economic growth is highly dependent on exports. Companies in the offshore-marine sector make rigs or the ships that service them. The employment numbers released Tuesday fit into a global story of malaise across oil-related industries. For Singapore's rig builders, the biggest risks still lie ahead, many analysts say. Nearly half their orders are from Sete Brasil SA, a Brazilian rig supplier that is teetering on the edge of bankruptcy. It is linked to heavily indebted Petróleo Brasileiro SA, known as Petrobras, which is engulfed in a corruption scandal in Brazil. "With underlying markets remaining extremely weak and expected to remain so in the medium term, the challenges are intensifying," said Rahul Kapoor, director of equity research at Drewry Shipping Consultants. "Today, Singapore is at risk of being caught in the headwinds of China's economic downturn." Economists expected the plunge in oil prices--down nearly 75% between mid-2014 and earlier this year --to benefit oil importers such as Singapore. Indeed, people did enjoy lower energy bills, but there were costs, too, felt at industries that rely on demand from the oil business. In February, Singapore rig builder SembCorp Marine Ltd. reported its first quarterly loss and said that in 2015 it had let go between 3,000 and 4,000 workers, mostly foreign workers employed by subcontractors. According to the earnings statements, the company had focused on higher value-added products and diversified from oil-and-gas exploration into development and production. Rival Keppel Corp. last year cut 17% of its directly employed workforce, about 6,000 people, the company said. It also eliminated 7,900 subcontracted jobs, including positions left vacant when contracts ended. Keppel last year cut its staff costs by 7.7% and material and subcontracting costs by 24%, compared with 2014. Asked about the outlook for the offshore marine sector, a Keppel spokesman pointed to a statement the company's chief executive, Loh Chin Hua, made after 2015 earnings were published at the end of January. The statement noted that Keppel had survived previous downturns, and said it had cut costs and was focusing on services still in demand, such as repair and conversion. "Singapore's dominance in certain segments of offshore and marine engineering is impressive," said Joseph Incalcaterra, an economist covering Southeast Asia at HSBC in Hong Kong. But "this dominance risks becoming a liability as global oil and gas capital expenditure is set to decline for a second consecutive year." Mr. Incalcaterra estimates that oil-related manufacturing accounts for about 3.6% of Singapore's gross domestic product. The Singapore government doesn't provide its own breakdown. As oil prices declined, the demand for oil rigs fell and oil-exploration companies cut capital expenditure. Many industry operators expect prices to stay low well into 2017 and possibly into 2018, according to Shekaran Krishnan, a partner at Ernst & Young. "The steep and accelerated fall this time has strong impact throughout the value chain. At $40 per barrel, it is below [the] break-even point for most offshore operators," he said. "There is no visibility to when the oil price slump will end." Write to Jake Maxwell Watts at jake.watts@wsj.com and Saurabh Chaturvedi at Saurabh.Chaturvedi@wsj.com Credit: By Jake Maxwell Watts And Saurabh Chaturvedi
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 16, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773396958
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773396958?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Rise on Producers' Plan to Discuss Output Limits; OPEC officials said Saudi Arabia, Kuwait and allies would limit output even if Iran doesn't
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Mar 2016: n/a.
Abstract:
Related * OPEC, Non-OPEC Oil Producers Plan Output Cut Meeting for April * Saudi Arabia, Russia, Qatar, Venezuela Agree to Freeze Oil Output (Feb. 16) Russia and OPEC have a history of failing to follow through on pledges to cap or cut production.
Full text: Oil prices surged Wednesday on word from OPEC officials that Saudi Arabia and other leading exporters will limit their output even if Iran doesn't cooperate. The market shrugged off mildly disappointing data about rising stockpiles in the U.S. to resume a rally that has juiced the market for more than a month. Oil is now up about 47% during that span as speculators have become more optimistic that nearly two years of price declines are finally forcing big producers to slow down. Saudi Arabia, Kuwait and their allies would limit their oil output even if Iran doesn't follow suit, OPEC officials said, a change in tone that paves the way for curbs on crude production to be set next month. Qatar said it would host a meeting on April 17 for oil producers both inside and outside the Organization of the Petroleum Exporting Countries. Light, sweet crude for April delivery settled up $2.12, or 5.8%, to $38.46 a barrel on the New York Mercantile Exchange. It was the largest percentage gain in one day since Feb. 22. Crude has been rallying since Feb. 11 when an official from one of Saudi Arabia's major allies, the United Arab Emirates, said the countries were ready to start cooperating. In the following weeks, Russia joined a preliminary deal to freeze output, which had surged in the past two years as the world's biggest producers kept up a fierce competition for customers by selling more for less. Related * OPEC, Non-OPEC Oil Producers Plan Output Cut Meeting for April * Saudi Arabia, Russia, Qatar, Venezuela Agree to Freeze Oil Output (Feb. 16) Russia and OPEC have a history of failing to follow through on pledges to cap or cut production. But prices had fallen so far during the recent collapse that traders are looking for reasons to bet the fall has ended and get ahead of a big rebound, brokers and analysts have said. "Guys are comfortable that the floor is sort of in," Peter Donovan, broker for Liquidity Energy in New York, said Wednesday. Now they "are looking for a reason (oil prices) might bounce back." Saudi Arabia and its allies in the Middle East had said any agreement would be off if Iran refused to participate, but oil prices as low as $26.21 a barrel this year have hurt the Saudi economy and put domestic political pressure on the kingdom to move forward anyway, OPEC officials said. Iran's refusal is "not a deal beaker," said an OPEC official from a Persian Gulf Arab country. U.S. production also fell again, according to government data released late Wednesday morning. It declined to 9.07 million barrels a day in the week ended Friday, down from 9.08 million barrels the week before. Production had peaked at 9.7 million last April but has gradually declined since. "We may see some strength for prices coming from possible U.S. production declines," wrote Daniel Ang, an investment analyst at Phillip Futures, but he added, "based on fundamentals we expect prices to be moving downwards by the end of the week even if prices do increase today." Many are skeptical that the production slowdown is enough, both in the U.S. and in OPEC and Russia. Many analysts and investors believe the recent rally could encourage U.S. producers to open up wells that have been drilled but left idle, while others say the freeze discussed by OPEC and Russia isn't significant because they are already hitting record levels of production. Stockpiles are also brimming with supply around the world, and if exporters only freeze production and don't cut it, that oversupply may not shrink. U.S. storage levels, both for crude alone and in total combined with refined fuels, increased last week, the U.S. Energy Information Administration said. Total stockpiles grew to 1.3474 billion barrels as of March 11, up from 1.3456 billion the week before. Data released late Tuesday from the American Petroleum Institute, an industry group, had shown a slight decline. That unexpected decline happened in large part because gasoline stockpiles didn't fall as quickly as API and many analysts had expected. They dropped by just 747,000 barrels, compared with analysts' expectations of a 2.6-million-barrel decline and API's report of a 1.2-million-barrel decline. Gasoline futures settled up, but after paring nearly all of their gains on the EIA's data release. It gained 1.01 cents, or 0.7%, at $1.4183 a gallon after rising to as much as $1.4356 a gallon earlier in the day. Diesel futures gained 5.35 cents, or 4.5%, to $1.2312 a gallon. "This rally is going to be especially difficult to sustain," said Ric Navy, senior vice president for energy futures at brokerage R.J. O'Brien & Associates LLC. "There's still plenty of inventory on the crude side. You're building inventories, not great amounts, but the fact is that it's a build and that's still negative." Summer Said, Benoit Faucon and Dan Strumpf contributed to this article contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Crude oil prices; Petroleum industry; Supply & demand; Cooperation
Location: Iran Qatar Russia United States--US Saudi Arabia
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 16, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773397794
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773397794?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with perm ission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
UK's Chancellor Scraps Petroleum Revenue Tax, Offering Respite to Oil Producers; The U.K. government has abolished the levy charged on oil and gas profits in order to kick-start the country's beleaguered hydrocarbon industry.
Author: Baxter, Kevin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Mar 2016: n/a.
Abstract:
Most producers on the U.K. continental shelf, the area of the North Sea that produces almost all of the country's oil, have already slashed costs by 20% in a bid to survive the recent low-price cycle.
Full text: LONDON--The U.K. government has abolished the petroleum revenue tax, the levy charged on oil and gas profits, in order to kick-start the country's beleaguered hydrocarbon industry the U.K. Treasury chief, George Osborne, announced in his 2016 budget. Mr. Osborne, the chancellor of the exchequer, said that as well as getting rid of the PRT, which previously stood at 35%, he was also cutting a supplementary charge levied on oil and gas profits from 20% to 10%. The supplementary charge ring-fences profits from oil and gas production to stop producers from reducing taxable income by writing it off against losses or interest payments. Both measures will be backdated to Jan. 1, 2016. The cuts will be welcomed by oil and gas producers in the North Sea many of whom have some of the highest per barrel costs in the world and are having to contend with the oil price slump to under $40 a barrel. Speaking at a conference in February, Graham Talbot, chief financial officer of Denmark's Maersk Oil, said that the average cost per barrel was over $20 and that he expected capital spending in the North Sea oil fields to fall to $29 billion in 2016, a fall of $7 billion compared with 2015. Most producers on the U.K. continental shelf, the area of the North Sea that produces almost all of the country's oil, have already slashed costs by 20% in a bid to survive the recent low-price cycle. Write to Kevin Baxter at Kevin.Baxter@wsj.com Credit: By Kevin Baxter
Subject: Petroleum industry; Energy economics
Location: United Kingdom--UK North Sea
Company / organization: Name: Maersk Oil; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 16, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773541671
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773541671?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.K. Offers Respite to Oil Producers by Scrapping Petroleum Revenue Tax; Cuts likely to be welcomed by North Sea oil and gas producers
Author: Baxter, Kevin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Mar 2016: n/a.
Abstract:
Most producers on the U.K. continental shelf, the area of the North Sea that produces almost all of the country's oil, have already slashed costs by 20% in a bid to survive the recent low-price cycle.
Full text: LONDON--The U.K. government has abolished the petroleum revenue tax, the levy charged on oil and gas profits, to kick-start the country's beleaguered hydrocarbon industry the U.K. Treasury chief, George Osborne, announced in his 2016 budget. Mr. Osborne, the chancellor of the exchequer, said that as well as getting rid of the PRT, which previously stood at 35%, he was also cutting a supplementary charge levied on oil and gas profits from 20% to 10%. The supplementary charge ring-fences profits from oil and gas production to stop producers from reducing taxable income by writing it off against losses or interest payments. Both measures will be backdated to Jan. 1, 2016. The cuts will be welcomed by oil and gas producers in the North Sea many of whom have some of the highest per barrel costs in the world and are having to contend with the oil price slump to under $40 a barrel. Speaking at a conference in February, Graham Talbot, chief financial officer of Denmark's Maersk Oil, said that the average cost per barrel was over $20 and that he expected capital spending in the North Sea oil fields to fall to $29 billion in 2016, a fall of $7 billion compared with 2015. Most producers on the U.K. continental shelf, the area of the North Sea that produces almost all of the country's oil, have already slashed costs by 20% in a bid to survive the recent low-price cycle. Write to Kevin Baxter at Kevin.Baxter@wsj.com Credit: By Kevin Baxter
Subject: Petroleum industry; Energy economics
Location: Denmark United Kingdom--UK North Sea
Company / organization: Name: Maersk Oil; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 16, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773560348
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773560348?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
How Should Airlines Spend Their Windfall? Airlines have money, thanks to low oil prices among other reasons, so here are some traveler ills to right first
Author: McCartney, Scott
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Mar 2016: n/a.
Abstract:
Mike McCormick, executive director of the Global Business Travel Association, says airlines should provide enough space in coach so people can open a laptop computer, have power available and be productive. (Delta has stuck with roomier nine-across 777 seating.) Kevin Mitchell, chairman of the Business Travel Coalition, a group of corporate travel managers, thinks airlines should eliminate fuel surcharges--which were renamed "carrier-imposed charges" when fuel got cheap--from international tickets.
Full text: Airlines profits are soaring, but will wealthier airlines make passengers happier? After decades of pleading poverty, the industry is able to reshape air travel. Dramatically lower oil prices, years of cost-cutting and huge consolidation mean years of lasting profitability, airline executives say. Last year, industry profits tripled to $23 billion. The four biggest airlines have $18 billion in cash on their balance sheets. If it were up to travelers, the money would be spent taking the hassle and strain out of air travel. It could restore some of the comforts that flew away with pillows and blankets. The starters: adequate leg room, lower punitive fees for schedule changes and equitable frequent-flier award availability. Airlines have been spending on improved reliability, better planes, Wi-Fi and entertainment, higher pay for workers and even free pretzels on some flights. Airlines are green lighting several long-overdue cosmetic upgrades and airport terminal expansions. Among recent announcements: American is redesigning airport clubs, and Delta has installed satellite-based Wi-Fi on trans-Atlantic aircraft. Yet travel still feels miserly, except for passengers with elite status. New planes come with tighter seating. For frequent fliers and travel experts, compiling a shopping list for airline executives is a fun parlor game. The consensus seems to be airlines could make travel better for the masses, not just the most-frequent travelers. "Lower prices. More legroom," is the prescription of U.S. Sen. Charles Schumer of New York, through a spokesman. The senator is a frequent critic of airlines. Fares have come down a bit. Last year, the price to fly each mile, on average, dropped 4% for domestic trips and 8% for international travel, according to Airlines for American, the industry's Washington, D.C., lobbying group. It isn't out of benevolence. Fares have always been a supply-and-demand equation, independent of airlines' costs. Lately fares in many markets have ticked down because of expanding competition from discount airlines. Many fliers want more legroom, arguing airlines can afford to give up a row or two of seats now that they are earning hefty profits. Passenger comfort should be a competitive difference. It isn't a safety issue . Mike McCormick, executive director of the Global Business Travel Association, says airlines should provide enough space in coach so people can open a laptop computer, have power available and be productive. "I'm not talking about front-of-the-cabin luxury," he says. Mr. McCormick also advocates restoring some service to secondary markets that hadn't been as profitable. And he would like airlines to spend more on baggage-tracking technology, as airlines do in Europe and Asia. Tight seating and fees for extra legroom have been integral to the industry's turnaround, airlines says, and they aren't looking to reverse. The squeeze continues. United last week said it would retrofit 19 of its 74 Boeing 777s with 10-abreast seating in coach rows instead of nine in each row, dropping seat width from 18 inches to 17. American and other airlines already have switched to the skinnier seats on planes that often fly 10 hours or more. (Delta has stuck with roomier nine-across 777 seating.) Kevin Mitchell, chairman of the Business Travel Coalition, a group of corporate travel managers, thinks airlines should eliminate fuel surcharges--which were renamed "carrier-imposed charges" when fuel got cheap--from international tickets. Airlines should align the price of ticket changes and cancellations with actual costs, he adds. Charging $200 to change a domestic ticket, and $300 for an international ticket, is punitive when the change typically takes only a few keystrokes, Mr. Mitchell argues. Airlines charge a higher price anyway if fares have changed, and they overbook flights so they are protected from cancellations. More Columns From The Middle Seat * Skinnier Seats on More Crowded Planes * The New Thin Line Between Carry-On and Checked Bags * Is More Entertainment Worth Less Legroom on Your Flight? Former Continental chief executive Gordon Bethune, in the news lately when dissident investors at United proposed their own slate of directors with Mr. Bethune as chairman , says travelers have to be realistic about what airlines can provide. "You're not going to get the Four Seasons at $169," he says. Airlines around the world are increasingly offering more choices, which he argues is good for consumers. With fees for checked bags, seat assignments and extra legroom, passengers can pick what they're willing to pay for. "We don't want one size fits all. It's not size 10-to-13 on socks anymore. It's size 12," Mr. Bethune says. He likes the idea of stocking up on oil futures if the price, currently about $37 a barrel, drops back into the low $30s or high $20s. Airlines can afford the insurance, and it could pay off, he says. Southwest bought up oil hedges 10 years out in the mid-1990s, providing that airline an advantage let Southwest grow and pressure competitors with lower prices, Mr. Bethune says. Here's the Middle Seat wish list--a few things that would remove some of the distaste consumers have for airlines. If air travel were more pleasant and easier to buy and use, more people would fly. * Set a minimum on legroom and advertise it as an advantage over ultracheap airlines with sardine seating. Every airline doesn't have to be as tight as the cheapest discounter. If you want to be an airline that caters to business travelers and commands higher prices, stop trying to match the dollar storeand decide that you're Nordstrom, or even Target. * Give us 18-inch-wide seats whenever possible. Go back to nine across on 777s. Sometimes there's no choice. The Boeing 737 fuselage is wide enough for only 17-inch-wide seats. It was originally built for short hops. (Its competitor, the Airbus A320, allows for 18-inch seats.) But with widebody planes, there's more choice. Choose 18. * Go back to $75 change fees instead of $200. Change fees produce huge revenue for airlines--$2.3 billion in the first nine months of 2015, according to the Transportation Department. That is a lot of angry customers. Sometimes life intervenes and you have to change plans, and the airline not only hits you with a higher fare but also a penalty. The penalty fee can be almost as expensive as the ticket. * Give us a chance on frequent-flier award tickets. Landing a frequent-flier award seat at the basic level has become harder and harder. The price of award seats, in miles or points, seems constantly to rise, and availability seems to shrink. On March 22, American Airlines is raising the price of several awards , matching rivals. A domestic first-class MileSaver ticket goes to 50,000 miles one-way from 35,500 miles, a 41% increase. Even with higher mileage prices, the limited availability of seats at saver redemption levels makes them almost as hard to get as tickets to Broadway's "Hamilton." Write to Scott McCartney at middleseat@wsj.com Credit: By Scott McCartney
Subject: Airlines; Business travel; Air fares; Air travel; Profits
People: Schumer, Charles E
Company / organization: Name: Global Business Travel Association; NAICS: 813910
Product name: Airbus A320, Boeing 737
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 16, 2016
column: The Middle Seat
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773560350
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773560350?accountid=7117
Copyright: (c ) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Pacific Exploration & Production Considering Six Buyout Offers; Lower oil revenues exposed asset purchases, hurting share prices over past two years
Author: Anatoly Kurmanaev; Sara Schaefer Muñoz; Kurmanaev, Anatoly; Sara Schaefer Muñoz
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Mar 2016: n/a.
Abstract: None available.
Full text: CARACAS, Venezuela--Latin America's largest independent oil producer, Pacific Exploration & Production Corp., is evaluating six buyout offers to avoid bankruptcy, according to people familiar with the negotiations. The final offers, which include a management buyout and up to $500 million in loans, are due Wednesday, with the board expected to make a decision by the end of the week, the four people said. Share prices of the Bogotá, Colombia-based firm, which is also listed in Toronto, fell more than 95% in the past two years as lower oil revenues exposed poorly-timed asset purchases. Pacific spokesman Tom Becker declined to elaborate on the details of the specific offers, saying that the firm doesn't comment on rumors. He said the company is "currently working with all stakeholders and advisers to make the company's capital structure more suitable to market conditions." Related * Pacific Exploration Reaches Forbearance Deal With Certain Noteholders (Feb. 19) * Energy Investment Firm EIG Extends Offer to Pacific Exploration Debtholders (Feb. 10) * EIG CEO: Pacific Exploration Needs a Reorganization (Jan. 22) The offers are being compiled by the company's financial advisers Lazard and will be analyzed by an independent committee appointed by the board, the people said. The committee will present its recommendation to directors by Friday, the people said. A Lazard spokesman didn't return a request for comment. The most advanced offer would convert Pacific Exploration's debt into equity, thus giving the bondholders a majority stake in the company in return for reducing the payment load, the people said. Under this plan, the company's management would raise $500 million from banks and private equity, while keeping 10% of the company's shares, the people said. The scramble to avoid default represents a stark change of fortune for a firm that came to symbolize Colombia's economic transformation of the past decade. Founded by three Venezuelan and Italian oil and mining executives in 2003, Pacific focused on the country's mineral-rich eastern savanna, opening up its virgin deposits for exploration as the Colombian army pushed insurgents from the region. By the early 2010s, Pacific became Colombia's second-largest company by revenue, sponsoring the national soccer team and flying in musician Marc Anthony for its corporate parties. Last year, it pumped an average of 156,000 barrels of oil equivalent, more than any other private firm based in Latin America. Today, the company's market capitalization has shrunk to about $200 million from more than $7 billion dollars in early 2012. In January, the firm said it would skip $66 million in interest payments in hopes it could restructure its $5.4 billion of debt amid collapsing oil prices. The only offer for Pacific so far made public was made in January by energy-investment-firm EIG , which would give Pacific debtholders 16 cents on the dollar for their obligations. EIG's offer is among the six options being considered by the company, the people said. Write to Anatoly Kurmanaev at Anatoly.kurmanaev@wsj.com Credit: By Anatoly Kurmanaev and Sara Schaefer Muñoz
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 16, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773598741
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773598741?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil-Shipping Pressures Building --- Coming big tankers and possible tighter supplies could push industry's rates lower
Author: Strumpf, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Mar 2016: C.4.
Abstract:
More than 40% of those new vessels will be among the largest class of tankers, known as Very Large Crude Carriers, or VLCCs, huge ships that can each ferry more than two million barrels of oil, enough to fill 140 Olympic swimming pools or meet Germany's oil needs for a day.
Full text: A wave of new tanker construction and the prospect of tighter oil supplies are putting pressure on the booming business of shipping oil, a rare bright spot for the global maritime industry. Low oil prices and surging production have been a boon for the 2,000-vessel-strong oil-tanker business. The cost to charter tankers soared to near-records last year, while low fuel prices have boosted the profitability of ships. One sign of the good times: Many ports are so congested with crude vessels that tankers are plying their routes at a slower pace. The average tanker in recent months has cut its speed by 10%, on average, to minimize downtime, said Paddy Rodgers, chief executive of the big Belgian fleet operator Euronav NV. But analysts and ship brokers forecast choppier waters ahead for the hundreds of companies that ferry oil around the world. Built mainly in Asia's vast shipyards, that fleet is set to expand by more than 200 new tankers through 2017, the fastest pace of new shipbuilding in four years, according to Drewry Maritime Research. More than 40% of those new vessels will be among the largest class of tankers, known as Very Large Crude Carriers, or VLCCs, huge ships that can each ferry more than two million barrels of oil, enough to fill 140 Olympic swimming pools or meet Germany's oil needs for a day. A further one-third will be in the so-called Suezmax segment, the next-largest ships. Suezmax vessels are the biggest that can ply the Suez Canal. Those new ships are expected to push shipping rates lower and come as recent shifts in the oil market are working against oil shippers. Oil prices are on the rise again, and major oil producers are signaling a willingness to at least discuss the possibility of a production freeze. U.S. oil output is falling, while the International Energy Agency says demand growth is slowing. Taken together, that means that the world-wide crude glut, which has delivered a windfall for tanker operators, could begin to shrink. Some tanker-leasing rates already have started to wane. The Baltic Dirty Tanker Index, a benchmark for tanker rates, has fallen 40% from a recent high in early July. Drewry expects one-year leasing rates for VLCCs to fall 6% this year, after they rose almost three-fourths to $46,500 a day in 2015. "Crude prices can only stay low for so long," said Denis Petropoulos, group president of Asia at Braemar Shipping Services PLC, a ship brokerage headquartered in London. "There is a lot of new [tanker] building over the next two years, and those ships entering the market are eventually likely to affect rates, regardless of crude prices." The clutch of new tanker construction was meant to address a recent squeeze in oil vessels. During the financial crisis, the oil-tanker business struggled as global crude demand dried up. But a quick recovery in demand, soaring U.S. output and steady supplies from large oil exporters stoked a swift recovery. The recovery in the tanker business coincided with a yearslong shift eastward in the global oil trade. A reduction in U.S. oil imports has diverted crude from the Middle East and Africa toward thirsty new demand centers in Asia. Those routes tend to be longer, lengthening the average oil tanker's voyage, tying up ships for longer periods and boosting tanker rates, they said. "As earnings improved in 2014 to [2015], the tanker industry embarked on a major ordering spree, and [that is] the primary reason why we expect rates to soften this year," said Rahul Kapoor, director of equity research at Drewry. Tanker owners say the market can handle the wave of new ships, and point to other reasons to stay optimistic about their business. The recent lifting of the U.S. oil-export ban stands to boost tanker chartering if exports take off, they say. Firm crude demand from China continues to prop up tanker demand, and has led to congestion in some ports that can leave a ship waiting weeks to unload its cargo. "There is already an element of storage at sea," said Mr. Rodgers, the Euronav CEO, who added that short-term tanker rates have climbed after an early-year slowdown. A wild card for the industry is demand for so-called floating storage, in which producers and traders sock away spare oil in tankers to sell it later at a profit. About 32 million barrels were tied up in floating storage as of March 11, according to estimates by Thomson Reuters, down by almost half from the recent highs last November. Credit: By Dan Strumpf
Subject: Crude oil prices; Tankers; Petroleum industry; Maritime industry
Location: United States--US Asia
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 17, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773722136
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773722136?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright o wner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Crude Mystery: Where Did 800,000 Barrels of Oil Go? Tally of unaccounted-for oil hit highest level in 17 years in 2015; oil data is 'an imperfect science'
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2016: n/a.
Abstract:
Last year, there were 800,000 barrels of oil a day unaccounted for by the International Energy Agency, the energy monitor that puts together data on crude supply and demand. Other major market monitors, like the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries, don't break down their data to show the number of missing barrels.
Full text: There is mystery at the heart of the oversupplied global oil market: missing barrels of crude. Last year, there were 800,000 barrels of oil a day unaccounted for by the International Energy Agency, the energy monitor that puts together data on crude supply and demand. Where these barrels ended up, or if they even existed, is key to an oil market that remains under pressure from the glut in crude. Some analysts say the barrels may be in China. Others believe the barrels were created by flawed accounting and they don't actually exist. If they don't exist, then the oversupply that has driven crude prices to decade lows could be much smaller than estimated and prices could rebound faster. Whatever the answer, the discrepancy underscores how oil prices flip around based on data that investors are often unsure of. Barrels have gone missing before, but last year the tally of unaccounted-for oil grew to its highest level in 17 years. At a time when the issue of oversupply dominates the oil industry, this matters. "If the market is tighter than assumed due to the missing barrels, prices could spike quicker," said David Pursell, managing director at energy-focused investment bank Tudor, Pickering, Holt & Co. Here's how a barrel of crude goes "missing" in the data. Last year, the IEA estimated that on average the world produced around 1.9 million barrels a day more crude than there was demand for. Of that crude, 770,000 barrels went into onshore storage while roughly 300,000 barrels were in transit on the seas or through pipelines. That left roughly 800,000 barrels a day unaccounted for in the data. Global oil supply is about 96 million barrels a day. In the fourth quarter, the number of missing barrels reached as high as 1.1 million barrels a day, or 43% of the estimated oversupply during that period. The IEA collates production and demand data from around the world, and its monthly reports often move prices. Other major market monitors, like the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries, don't break down their data to show the number of missing barrels. In 1998, the last time the number of missing barrels was so high, concern over the discrepancy reached the U.S. Congress. A U.S. senator asked the Government Accountability Office, a nonpartisan agency working for Congress, to examine the IEA data. The agency found that "[statistical] limitations can introduce errors into the data, although the magnitude and direction of these errors are not clear." That is what most analysts think. "The most likely explanation for the majority of the missing barrels is simply that they do not exist," said Paul Horsnell, an oil analyst at Standard Chartered. Standard Chartered projects U.S. crude averaging $63 a barrel in the fourth quarter, an above-consensus forecast that has been shaped partly by the bank's belief that the glut is smaller than it seems. The average forecast among 13 investment banks surveyed by The Wall Street Journal last month was oil at $45 a barrel by the end of the year. West Texas Intermediate crude, the U.S. benchmark, rose $1.74 a barrel, or 4.5%, to $40.20 on Thursday , giving it a two-day gain of 11%. Brent, the international gauge, rose $1.21 a barrel, or 3%, to $41.54. A spokesman for the IEA referred to the agency's website, which says that the barrels' "miscellaneous to balance" could be explained by overstated supply, understated demand or stockpile changes in countries outside the Organization for Economic Co-operation and Development. While the IEA estimates supply and demand from global data, its numbers on where the oversupply is being stockpiled come only from members of the OECD. That means that some of those barrels might be found in non-OECD countries like China. Some analysts disagree. The missing barrels have become such a large proportion of the oversupply that this would imply that stockpiles are building up in non-OECD countries at a much faster pace than those in the organization, something that they question. Analysts also point out that collecting data on oil is hard. In the Markets * U.S. Oil Closes Above $40 a Barrel * Stocks Rebound, Putting Dow Positive for the Year * If No One Is Trading Stocks, Is It Really a Rally? Demand data is derived from models rather than from real measured consumption and is often substantially revised, investment bank DNB Markets said in a research note. More than half of global oil demand also now comes from non-OECD nations where statistical gathering isn't as well developed, the bank said. "We hence suspect that demand in non-OECD in reality is meaningfully larger than what is reported by the IEA," they said. Given this, some investors look at trends in oil data rather than the precise numbers they throw up. Oil data is "an imperfect science," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, which oversees $125 billion in assets. Still, Mr. Haworth said that whether these barrels are missing or not, the global glut of crude is still far from over. "The market could be a little tighter, but the barrels we do know about--it's still a lot of them," he said. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Supply & demand; Petroleum industry; Investment banking
Location: United States--US China
Company / organization: Name: Organization for Economic Cooperation & Development; NAICS: 928120; Name: Tudor Pickering Holt & Co LLC; NAICS: 523110; Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: Government Accountability Office; NAICS: 921130; Name: Congress; NAICS: 921120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 17, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773765110
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773765110?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Energy Bust Powers Down Generator Sales; Equipment makers like Cummins and Caterpillar are feeling the pain of lower oil production
Author: Hagerty, James R; Tita, Bob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2016: n/a.
Abstract:
In the range of 30 to 300 kilowatts, there probably are more than 10,000 surplus generators available for sale because of the oil bust, estimated Will Perry, chief executive of Worldwide Power Products, another Houston dealer.
Full text: Brandon Millican, who owns construction businesses in Malta, Mont., spotted an opportunity several years ago when shale-oil production soared in western North Dakota. He bought three Caterpillar Inc. generators for roughly $138,000 each and rented them to oil-production firms needing mobile electric power for their equipment. Now that oil exploration and production have plunged, Mr. Millican can't find anyone to rent those machines and is trying to sell them on Craigslist. "I'd rather not have them sit around if oil takes five or 10 years to come back," Mr. Millican said. Wary of the boom-and-bust cycle, oil-and-gas producers rent much of their equipment rather than buying. That leaves rental companies holding lots of generators and searching for ways to unload them--which is also drying up sales of new machines for Caterpillar, Cummins Inc. and other companies that manufacture them. The pain being felt by these companies illustrates how the energy bust has rippled far beyond the oil patch and is chilling a large part of the economy. "There's been a tremendous amount of (used) equipment hitting the market, and there will be a tremendous amount more," said Dick Davis, president of Depco Power Systems, a Houston-based dealer in new and used generators. In the range of 30 to 300 kilowatts, there probably are more than 10,000 surplus generators available for sale because of the oil bust, estimated Will Perry, chief executive of Worldwide Power Products, another Houston dealer. "We don't see any relief on the horizon," said Aaron Jagdfeld, chief executive of Wisconsin-based Generac Holdings Inc., a leading manufacturer of generators. Its sales to the oil and gas sector fell about 45% in 2015, and is expecting it to drop 35% to 40% in 2016. Its overall revenue dropped 10% last year to $1.3 billion, while net income sank 55% to $77.7 million, partly because of one-time charges. "Everybody is hoping for the best and bracing for the worst. You've got to let the air come out of the balloon," Mr. Jagdfeld said. For some, the generator glut spells opportunity. Justin Crownover, a farmer in Sunray, Texas, is finding bargain prices on used generators. Mr. Crownover, whose family farm is about 65 miles north of Amarillo, is using some of those natural gas-fueled generators to power irrigation pumps for fields of corn and sorghum. A used Caterpillar 210-kilowatt generator, roughly the size of Ford F-150 pickup truck, would have cost about $90,000 two years ago but now can go for as little as $50,000, he said. An index of values for used generators of various types compiled by Rouse Services, a data provider in Beverly Hills, Calif., fell 15% through January from its peak in April. That is far sharper than the 6.4% drop in prices for used construction and warehouse equipment broadly. Global Power Supply LLC, a generator rental and sales concern based in Santa Barbara, Calif., has dozens of generators in the 75- to 150-kilowatt range that were destined for oil-field use but now aren't needed there, said Mike Wolfe, who heads the firm's generator operations. He said a very lightly used Caterpillar G3306 generator that would have sold for roughly $150,000 about 18 months ago now might cost roughly $85,000. "They will get cheaper and cheaper," said Eddie Boudreau, owner of Pan American Power, a generator dealer in Covington, La. Some will be sold in the U.S., he said, but most are likely to be exported to Latin America or Asia. To keep from further depressing used-market prices, Tractor & Equipment Co., the Caterpillar dealer in North Dakota's Bakken Shale-oil region, has been shifting some generators and other rental equipment to dealers elsewhere and holding others at its Williston, N.D., rental lot. Demand for rented Caterpillar generators in Williston fell by about 40% last year, the dealer said. In addition to supplying electric power to equipment in remote places, generators are increasingly located in hospitals, commercial buildings, factories and homes for backup power. Most of those used in the oil fields are too large for residential needs, though, and may need to be reconfigured or rebuilt for other purposes to meet emissions standards, which lowers resale value. Still, United Rentals Inc., the biggest U.S. equipment-rental company, is redeploying generators from the oil fields to petrochemical plants, commercial buildings, golf tournaments and outdoor concerts, said Paul McDonnell, a senior vice president. Dewey Bailey, an area sales manager for industrial power at Tractor & Equipment in Williston, said he is holding on to many of his rental generators in anticipation of an eventual recovery. "There's a lot of wells left to be completed and when that happens there will be demand" for power, he said. Credit: By James R. Hagerty and Bob Tita
Subject: Corporate profiles; Petroleum industry; Generators; Sales; Natural gas; Petroleum production
Location: Malta North Dakota
Company / organization: Name: Ford Motor Co; NAICS: 336111, 333924, 336390; Name: Cummins Inc; NAICS: 333618, 336390
Product name: Ford F-150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 17, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773765176
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773765176?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Prices Hit $40 a Barrel, Extending Recent Rally; Crude has surged 53% since hitting a nearly 13-year low on Feb. 11
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2016: n/a.
Abstract:
The U.S. oil benchmark broke above $40 a barrel Thursday for the first time this year, extending a rally that has seen prices rebound 53% from their lowest level in more than a decade reached last month. Since settling at a nearly 13-year low of $26.21 a barrel on Feb. 11, U.S. oil prices have mounted a furious rally.
Full text: The U.S. oil benchmark broke above $40 a barrel Thursday for the first time this year, extending a rally that has seen prices rebound 53% from their lowest level in more than a decade reached last month. Since settling at a nearly 13-year low of $26.21 a barrel on Feb. 11, U.S. oil prices have mounted a furious rally. Crude has been buoyed by expectations that low prices would force producers to curtail output and that the global glut of the past two years would begin to abate. The rebound has also been fueled by a weakening U.S. dollar amid dialed-back expectations for U.S. interest-rate increases this year. The benchmark U.S. oil contract rose 4.5% to $40.20 a barrel Thursday on the New York Mercantile Exchange, its highest settlement since Dec. 3. The sharp bounceback, like the plunge that preceded it, has unnerved some analysts and investors who say the moves were driven by expectations of improvement rather than actual change in underlying supply and demand, making the market vulnerable to a snapback as intense as the recent rally. The market's recovery also sets up a paradox, since higher prices could encourage producers to increase output as prices approach levels at which they can operate profitably--adding to the oversupply that prompted the rout in the first place. "We have used up a significant portion of our upside potential," Citigroup Inc. analyst Tim Evans said. "I have difficulty seeing what's going to result in sustained further appreciation in price." The market is still oversupplied. U.S. stockpiles rose to a record last week and available storage space in key regions has become stretched. Though U.S. producers have cut back output moderately, Iran continues to ramp up production after international sanctions were lifted in January. Related stories * Crude Mystery: Where Did 800,000 Barrels of Oil Go? Analysts estimate world-wide surpluses continue to mount at a rate of 1 million to 2 million barrels a day. Saudi Arabia produced and exported more oil in February than it did the month before, data showed Thursday. The market has also been buoyed by hopes of a deal among big global oil exporters to freeze production. On Thursday, oil rallied after major state producers, including Saudi Arabia and other members and nonmembers of the Organization of the Petroleum Exporting Countries, agreed to meet in Qatar on April 17 to discuss freezing output. Some countries indicated that participation by Iran, which had previously been a condition for an agreement, was no longer required. Details of the deal and a meeting have been in flux for weeks. Many analysts and investors noted parallels to a similar bull market a year ago, when prices surged more than 30% between January and May, only to tumble again to new lows. "I think the rally is misguided," said John Brynjolfsson, a co-manager of the James Alpha Global Enhanced Real Return fund, which has maintained a bearish position in the oil market throughout the rally. "I don't think that amount of oil sloshing around with literally no place to go is going to sustain oil prices." One driver of gains has been short-covering, in which traders who bet oil would fall close out their bets. When traders close out short sales, it can drive the market higher as they buy futures to cover the position. Short trades on the benchmark U.S. contract reached a record in January, but have fallen more than 40% since then, regulatory data showed; by contrast, bullish long bets by hedge funds have risen just 14% during that time. Even if U.S. producers seek to reverse recent output cutbacks and bring more wells back online, several obstacles remain. Oil-field services workers who drove the production boom have been laid off or redeployed, and it will take time to staff up. And getting wells up and running again will require capital at a time when banks have been worried about producers' ability to make good on outstanding loans. "If a driller goes to a bank and says, 'Hey oil is at $40, lend me gazillions of dollars so I can punch thousands of holes in the ground,' I don't think that's in the bank's best interest," said Andy Lipow, president of Houston research consultancy Lipow Oil Associates. Still, some analysts said the market's move above the $40-a-barrel threshold signaled a potential new phase of positive sentiment, regardless of the underlying fundamentals. "We now seem to be getting a new wave of interest from long" investors, said Gene McGillian, senior analyst at brokerage Tradition Energy in Stamford, Conn. "It's all based on expectations, but it's driving things." Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen
Subject: Supply & demand; Petroleum industry; Prices
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 17, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773772380
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773772380?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
OECD Labor Costs Rose in Fourth Quarter; Lower oil prices have weakened inflation outlook, but there are signs longer-term pressures for higher consumer prices are building
Author: Hannon, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2016: n/a.
Abstract:
According to its figures, productivity fell slightly in the U.S. and Japan as 2015 drew to a close, and was unchanged in the eurozone and Germany.
Full text: Lower oil prices have weakened the immediate outlook for inflation across developed economies, but there are signs that longer-term pressures for higher consumer prices are starting to build. The Organization for Economic Cooperation and Development Thursday said labor costs across its 34 members rose by 0.5% in the final three months of last year, a pickup from just 0.2% in the previous quarter, and the largest increase since the first three months of 2014. The OECD measures the labor cost of producing a unit of gross domestic product, which is calculated by comparing changes in wages with changes in productivity, or the hourly output of an average worker. If wages rise faster than productivity, unit labor costs rise, and that can fuel inflation as businesses respond by raising their prices to cover higher outgoings. The pickup in labor costs during the final three months of last year was widespread, with the U.S. seeing an acceleration to 0.6% from 0.3% and the eurozone an acceleration to 0.5% from 0.2%, while Japan saw a steady rise of 0.4%. Among the seven largest developed economies, Germany recorded the largest increase in labor costs with a 1% rise. The weaker outlook for inflation this year has already prompted action from central banks. On March 10 the European Central Bank launched another package of stimulus measures following a cut in the forecast rate of inflation this year to 0.1% from 1.0%, while the Bank of Japan introduced negative interest rates in January . Norway's central bank became the latest to ease policy Thursday when it cut its key interest rate to 0.5% from 0.75%. If sustained, the rise in labor costs would help move inflation rates back toward the 2% level that developed-country central banks regard as necessary for healthy economic growth. But the OECD's figures also highlight a long-term worry for developed economies, with little or no productivity growth evident in the fourth quarter of last year. According to its figures, productivity fell slightly in the U.S. and Japan as 2015 drew to a close, and was unchanged in the eurozone and Germany. Write to Paul Hannon at paul.hannon@wsj.com Credit: By Paul Hannon
Subject: Central banks; Labor costs; Eurozone; Economic growth; Gross Domestic Product--GDP; Productivity
Location: Germany Japan United States--US
Company / organization: Name: Organization for Economic Cooperation & Development; NAICS: 928120; Name: Bank of Japan; NAICS: 521110; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 17, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773784356
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773784356?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Gulf Keystone Has 'Significant' Doubts About Future Amid Low Oil Prices; Kurdistan-focused oil producer weighed down by debt incurred when oil prices were high
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2016: n/a.
Abstract: None available.
Full text: LONDON--Gulf Keystone Petroleum Ltd., the Kurdistan-focused oil producer, said Thursday that there are "significant" doubts about the company's ability to continue operating amid low oil prices, political tensions and a severe cash crunch . Gulf Keystone's shares plunged around 25% as the company said it was scrambling to find money to repay its bondholders. Like many small exploration and production companies, Gulf Keystone is weighed down by debt incurred when oil prices were high. The company's debt woes have been further compounded by the lack of regular payments from the Kurdistan Regional Government for the oil they have pumped. The government is funneling some of the oil revenues to its Peshmerga military forces who are battling Islamic State militants near Kurdistan's border. "Strenuous efforts are currently underway to strengthen the balance sheet," said Gulf Keystone's Chief Executive Jón Ferrier. Last year, Gulf Keystone pumped around 30,000 barrels a day of oil from its giant Shaikan oil field in Kurdistan in northern Iraq. In February, the Kurdish government committed to regular payments for oil exports, but there is still over $1 billion outstanding owed to Gulf Keystone and other oil companies operating in the region, including Genel Energy PLC and DNO ASA. For Gulf Keystone, the arrears include $93 million for past sales of crude from the Shaikan oil fields and a further $85 million for the KRG's share of past costs to develop the oil field that Gulf Keystone have already made. Gulf Keystone said it wasn't sure it can repay $26.4 million to bondholders on time in April and October this year, and there is also uncertainty about repaying $250 million in April 2017 and $325 million in October 2017. Last year, Gulf Keystone took on advisers to conduct a strategic review of the company's financing options, which included discussions about a possible sale of assets or the company. However, Gulf Keystone's Chief Financial Officer Sami Zouari said there was a "low likelihood" of an asset transaction in the near future, given the company's debt burden, current oil price and geopolitical challenges in Iraq. In full-year results the company reported a net loss of $135 million for the year ended Dec. 31, 2015, compared with an impairment-weighted $248 million net loss the year before. Revenues more than doubled to $86 million from $39 million the year before due to a 71% rise in gross oil output to 11.1 million barrels, which helped to offset the drop in global oil prices. Alex MacDonald in London contributed to this article Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 17, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1773822379
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1773822379?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Pacific Exploration & Production Considering Six Buyout Offers; Lower oil revenues exposed asset purchases, hurting share prices over past two years
Author: Anatoly Kurmanaev; Sara Schaefer Muñoz; Kurmanaev, Anatoly; Sara Schaefer Muñoz
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2016: n/a.
Abstract: None available.
Full text: CARACAS, Venezuela--Latin America's largest independent oil producer, Pacific Exploration & Production Corp., is evaluating six buyout offers to avoid bankruptcy, according to people familiar with the negotiations. The final offers, which include a management buyout and up to $500 million in loans, are due Wednesday, with the board expected to make a decision by the end of the week, the four people said. Share prices of the Bogotá, Colombia-based firm, which is also listed in Toronto, fell more than 95% in the past two years as lower oil revenues exposed poorly-timed asset purchases. Pacific spokesman Tom Becker declined to elaborate on the details of the specific offers, saying that the firm doesn't comment on rumors. He said the company is "currently working with all stakeholders and advisers to make the company's capital structure more suitable to market conditions." Related * Pacific Exploration Reaches Forbearance Deal With Certain Noteholders (Feb. 19) * Energy Investment Firm EIG Extends Offer to Pacific Exploration Debtholders (Feb. 10) * EIG CEO: Pacific Exploration Needs a Reorganization (Jan. 22) The offers are being compiled by the company's financial advisers Lazard and will be analyzed by an independent committee appointed by the board, the people said. The committee will present its recommendation to directors by Friday, the people said. A Lazard spokesman didn't return a request for comment. The most advanced offer would convert Pacific Exploration's debt into equity, thus giving the bondholders a majority stake in the company in return for reducing the payment load, the people said. Under this plan, the company's management would raise $500 million from banks and private equity, while keeping 10% of the company's shares, the people said. The scramble to avoid default represents a stark change of fortune for a firm that came to symbolize Colombia's economic transformation of the past decade. Founded by three Venezuelan and Italian oil and mining executives in 2003, Pacific focused on the country's mineral-rich eastern savanna, opening up its virgin deposits for exploration as the Colombian army pushed insurgents from the region. By the early 2010s, Pacific became Colombia's second-largest company by revenue, sponsoring the national soccer team and flying in musician Marc Anthony for its corporate parties. Last year, it pumped an average of 156,000 barrels of oil equivalent a day, more than any other private firm based in Latin America. Today, the company's market capitalization has shrunk to about $200 million from more than $7 billion dollars in early 2012. In January, the firm said it would skip $66 million in interest payments in hopes it could restructure its $5.4 billion of debt amid collapsing oil prices. The only offer for Pacific so far made public was made in January by energy-investment-firm EIG , which would give Pacific debtholders 16 cents on the dollar for their obligations. EIG's offer is among the six options being considered by the company, the people said. Write to Anatoly Kurmanaev at Anatoly.kurmanaev@wsj.com Corrections & Amplifications: Pacific Exploration & Production Corp. pumped an average of 156,000 barrels of oil a day in 2015. An earlier version of this article incorrectly stated the time frame. (March 17, 2016) Credit: By Anatoly Kurmanaev and Sara Schaefer Muñoz
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 17, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774003763
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774003763?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Shale Revolutionaries; There are energy deposits all over the world. Yet drilling oil and gas out of once-inaccessible shale was only pursued vigorously in the U.S.
Author: Philip Delves Broughton
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Mar 2016: n/a.
Abstract:
The author applauds Harvard's President Drew Gilpin Faust for her 2013 rejection of demands that Harvard abandon its investments in fossil fuels.
Full text: When bombs go off in the U.S. economy, it takes more than an economist to grasp what is really happening. The numbers alone could never fully explain the ugly shenanigans of subprime mortgage lending and securitization leading up to the financial crisis of 2008. Equally, the U.S. shale revolution is not a story just for those capable of reading a geological survey. Its aftershocks have transformed everything from the economy of North Dakota to the power dynamics among America, Russia and the Middle East. Not to mention forecasts about climate change. It's a complicated yarn that Gary Sernovitz, a novelist and energy investor, spins in "The Green and the Black" and one that is still revealing fresh plot twists. Just last week, the shale boom's most Shakespearean figure, Aubrey McClendon, died in a car crash the day after he was indicted on charges that he had rigged bids for oil and gas leases in Oklahoma. McClendon was dazzlingly ambitious and persuasive, if perhaps blithe to humdrum legalities. Other pioneers of America's new energy age have been equally vivid. George Mitchell of Mitchell Energy was a Greek immigrant who began wildcatting in the 1950s and fracked the Barnett Shale in Texas for nearly two decades before he could make it work financially. By that time he was 77. Harold Hamm of Continental Resources, the 13th child of Oklahoma sharecroppers, became a multi-billionaire by fracking the Bakken formations across Montana and North Dakota. It was men like these, willing to keep buying land and drilling whether they were nearly bankrupt or billionaires, that Mr. Sernovitz credits for the shale revolution. One great mystery of economic history is why certain people in certain places show more entrepreneurial vigor than others. We still reach desperately for Keynes's tired phrase about "animal spirits" guiding economic behavior, ignoring abundant evidence that free people guaranteed by a free society given free rein to chase gold generate the highest returns. There are energy deposits to be found all over the world. But the opportunity to drill oil and gas out of once-inaccessible shale was pursued with greater vigor in the United States than anywhere else. The financial incentives available in a thriving capitalist economy were significant. But so too was the character of the men and women who led the way. Mr. Sernovitz writes that they showed "a fearlessness in the face of risk, a scrappy creativity in keeping businesses running, a grit to try again after failures, and a sense of fun in getting all the meat off the bone in a market declared spent." But the money, some $2 trillion added to the U.S. economy since 2004 by Mr. Sernovitz's estimate, is only one part of this epic. The dispute over the environmental impact of shale production infects even the name used for the most controversial technique, "fracking" rather than "hydraulic fracturing." "Some in the oil industry are comically sensitive about the spelling of the word," he writes, "suspecting that the 'k' is a way for environmentalists . . . to turn it into a cousin of you-know-fricking-what. . . . Others insisted that the shorthand should be spelled fracing or fraccing . . . like a European beauty treatment or an invasive medical procedure." Mr. Sernovitz's book is structured as a series of essays rather than built around a single propulsive narrative. This works especially well as he tiptoes through the arguments linking our consumption of fossil fuels to climate change. He is keen to avoid the theological ravings he hears on both sides, from the energy executives he spends his professional life with to his friends and neighbors who berate him for even the most nuanced defense of fracking and its rewards. The author applauds Harvard's President Drew Gilpin Faust for her 2013 rejection of demands that Harvard abandon its investments in fossil fuels. At the time, she wrote that she found "a troubling inconsistency in the notion that, as an investor, we should boycott a whole class of companies at the same time that as individuals and as a community, we are extensively relying on those companies' products and services for so much of what we do every day." The scientific accounts of climate change today may be entirely accurate, but the forecasts, like forecasts in any field, tend to get tied up with questionable assumptions. Shifting from one set of energy sources to another is a complicated business with profound consequences, and Mr. Sernovitz is careful not to over-simplify them. But already the geopolitical effects have been profound. In 2004 the United States produced 15% less oil and gas than Russia, then the world's largest energy supplier. In 2014 the United States produced 16% more. Such a dramatic shift may create a certain swagger and indifference in Washington toward parts of the world that used to be essential to keeping America's lights on, notably the Middle East. But a poorer Middle East may not be good for America in the long run. It is refreshing to have such contentious issues sieved through Mr. Sernovitz's inquisitive mind, balancing the most pessimistic and optimistic visions of change. He writes: "For those who lament that America no longer makes anything but bond traders, for those who think that 'maker' culture only exists in a bearded guy pickling compassionately farmed okra in Austin, spend some time with oil industry engineers to absorb their enthusiasm, empiricism, technical inventiveness, and fearlessness to try and err." This book is ultimately a call for us to trust our native spirit of enterprise: The very ingenuity that led to America's shale boom will allow us to meet the challenges that it has thrown up. Mr. Delves Broughton is the author of "The Art of the Sale: Learning From the Masters About the Business of Life." Credit: By Philip Delves Broughton
Subject: Fossil fuels; Hydraulic fracturing
Location: Russia Oklahoma United States--US North Dakota
People: Hamm, Harold McClendon, Aubrey
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 17, 2016
Section: Arts
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774045888
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774045888?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude Mystery: Where Did 800,000 Barrels of Oil Go? Tally of unaccounted-for oil hit highest level in 17 years in 2015; oil data is 'an imperfect science'
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Mar 2016: n/a.
Abstract:
Last year, there were 800,000 barrels of oil a day unaccounted for by the International Energy Agency, the energy monitor that puts together data on crude supply and demand. Other major market monitors, like the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries, don't break down their data to show the number of missing barrels.
Full text: There is mystery at the heart of the oversupplied global oil market: missing barrels of crude. Last year, there were 800,000 barrels of oil a day unaccounted for by the International Energy Agency, the energy monitor that puts together data on crude supply and demand. Where these barrels ended up, or if they even existed, is key to an oil market that remains under pressure from the glut in crude. Some analysts say the barrels may be in China. Others believe the barrels were created by flawed accounting and they don't actually exist. If they don't exist, then the oversupply that has driven crude prices to decade lows could be much smaller than estimated and prices could rebound faster. Whatever the answer, the discrepancy underscores how oil prices flip around based on data that investors are often unsure of. Barrels have gone missing before, but last year the tally of unaccounted-for oil grew to its highest level in 17 years. At a time when the issue of oversupply dominates the oil industry, this matters. "If the market is tighter than assumed due to the missing barrels, prices could spike quicker," said David Pursell, managing director at energy-focused investment bank Tudor, Pickering, Holt & Co. Here's how a barrel of crude goes "missing" in the data. Last year, the IEA estimated that on average the world produced around 1.9 million barrels a day more crude than there was demand for. Of that crude, 770,000 barrels went into onshore storage while roughly 300,000 barrels were in transit on the seas or through pipelines. That left roughly 800,000 barrels a day unaccounted for in the data. Global oil supply is about 96 million barrels a day. In the fourth quarter, the number of missing barrels reached as high as 1.1 million barrels a day, or 43% of the estimated oversupply during that period. The IEA collates production and demand data from around the world, and its monthly reports often move prices. Other major market monitors, like the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries, don't break down their data to show the number of missing barrels. In 1998, the last time the number of missing barrels was so high, concern over the discrepancy reached the U.S. Congress. A U.S. senator asked the Government Accountability Office, a nonpartisan agency working for Congress, to examine the IEA data. The agency found that "[statistical] limitations can introduce errors into the data, although the magnitude and direction of these errors are not clear." That is what most analysts think. "The most likely explanation for the majority of the missing barrels is simply that they do not exist," said Paul Horsnell, an oil analyst at Standard Chartered. Standard Chartered projects U.S. crude averaging $63 a barrel in the fourth quarter, an above-consensus forecast that has been shaped partly by the bank's belief that the glut is smaller than it seems. The average forecast among 13 investment banks surveyed by The Wall Street Journal last month was oil at $45 a barrel by the end of the year. West Texas Intermediate crude, the U.S. benchmark, rose $1.74 a barrel, or 4.5%, to $40.20 on Thursday , giving it a two-day gain of 11%. Brent, the international gauge, rose $1.21 a barrel, or 3%, to $41.54. A spokesman for the IEA referred to the agency's website, which says that the barrels' "miscellaneous to balance" could be explained by overstated supply, understated demand or stockpile changes in countries outside the Organization for Economic Co-operation and Development. While the IEA estimates supply and demand from global data, its numbers on where the oversupply is being stockpiled come only from members of the OECD. That means that some of those barrels might be found in non-OECD countries like China. Some analysts disagree. The missing barrels have become such a large proportion of the oversupply that this would imply that stockpiles are building up in non-OECD countries at a much faster pace than those in the organization, something that they question. Analysts also point out that collecting data on oil is hard. In the Markets * U.S. Oil Closes Above $40 a Barrel * Stocks Rebound, Putting Dow Positive for the Year * If No One Is Trading Stocks, Is It Really a Rally? Demand data is derived from models rather than from real measured consumption and is often substantially revised, investment bank DNB Markets said in a research note. More than half of global oil demand also now comes from non-OECD nations where statistical gathering isn't as well developed, the bank said. "We hence suspect that demand in non-OECD in reality is meaningfully larger than what is reported by the IEA," they said. Given this, some investors look at trends in oil data rather than the precise numbers they throw up. Oil data is "an imperfect science," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, which oversees $125 billion in assets. Still, Mr. Haworth said that whether these barrels are missing or not, the global glut of crude is still far from over. "The market could be a little tighter, but the barrels we do know about--it's still a lot of them," he said. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Supply & demand; Petroleum industry; Investment banking
Location: United States--US China
Company / organization: Name: Organization for Economic Cooperation & Development; NAICS: 928120; Name: Tudor Pickering Holt & Co LLC; NAICS: 523110; Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: Government Accountability Office; NAICS: 921130; Name: Congress; NAICS: 921120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774050819
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774050819?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude Oil Futures Steady in Asia in Wake of Sharp Rally; May Brent crude fell eight cents to $41.46 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Mar 2016: n/a.
Abstract:
Anticipation has grown that major oil producers, including countries outside the Organization of the Petroleum Exporting Countries, will join a production freeze at January levels.
Full text: Oil futures were little changed in early Asia trading on Friday, pausing after a brisk rally that vaulted major crude benchmarks back above $40 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in April fell two cents to $40.18 a barrel in the Globex electronic session. May Brent crude on London's ICE Futures exchange fell eight cents to $41.46 a barrel. The breather comes on the heels of a brisk rally during U.S. trading hours, which took Nymex crude up 4.5%. The benchmark U.S. contract has jumped 18% in March, amid anticipation that major producers are preparing to tap the brakes on global output. Anticipation has grown that major oil producers, including countries outside the Organization of the Petroleum Exporting Countries, will join a production freeze at January levels. A meeting is set in Qatar on April 17 to discuss an output freeze. Many analysts say the market needs to see more a definitive reduction in supply in order for crude to continue its rally. Some countries indicated that participation by Iran wasn't required for a deal. Iran is set to ramp up output following the removal of international sanctions. "Supportive fundamentals will be needed to drive prices higher," analysts at ANZ wrote in a note to clients. They added: "In our view, the chances of any production cut announcements are weak and Iran looks committed to expand oil output." One factor that analysts say could derail a rally is if U.S. oil producers begin to expand output again in response to higher prices. But it remains unclear how quickly shale producers can restart production following major spending cuts. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--fell 0.45 cent to $1.4338 a gallon, while April diesel traded at $1.2498, 0.47 cent lower. ICE gasoil for April changed hands at $374.50 a metric ton, down 75 cents from Thursday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Petroleum industry; Price increases; Crude oil
Location: Iran United States--US Asia Qatar
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774086085
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774086085?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Oil Hits $40 As Rally Goes On
Author: Berthelsen, Christian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Mar 2016: C.1.
Abstract:
The U.S. oil benchmark broke above $40 a barrel Thursday for the first time this year, extending a rally that has seen prices rebound 53% from their lowest level in more than a decade reached last month. Since settling at a nearly 13-year low of $26.21 a barrel on Feb. 11, U.S. oil prices have mounted a furious rally.
Full text: The U.S. oil benchmark broke above $40 a barrel Thursday for the first time this year, extending a rally that has seen prices rebound 53% from their lowest level in more than a decade reached last month. Since settling at a nearly 13-year low of $26.21 a barrel on Feb. 11, U.S. oil prices have mounted a furious rally. Crude has been buoyed by expectations that low prices would force producers to curtail output and that the global glut of the past two years would begin to abate. The rebound also has been fueled by a weakening U.S. dollar amid dialed-back expectations for U.S. interest-rate increases this year. The benchmark U.S. oil contract rose 4.5% to $40.20 a barrel Thursday on the New York Mercantile Exchange, its highest settlement since Dec. 3. The sharp bounceback, like the plunge that preceded it, has unnerved some analysts and investors who say the moves were driven by expectations of improvement rather than actual change in underlying supply and demand, making the market vulnerable to a snapback as intense as the recent rally. The market's recovery also sets up a paradox, since higher prices could encourage producers to increase output as prices approach levels at which they can operate profitably -- adding to the oversupply that prompted the rout in the first place. "We have used up a significant portion of our upside potential," Citigroup Inc. analyst Tim Evans said. "I have difficulty seeing what's going to result in sustained further appreciation in price." The market still is oversupplied. U.S. stockpiles rose to a record last week and available storage space in key regions has become stretched. Though U.S. producers have cut back output moderately, Iran continues to ramp up production after international sanctions were lifted in January. Analysts estimate world-wide surpluses continue to mount at a rate of 1 million to 2 million barrels a day. Saudi Arabia produced and exported more oil in February than it did the month before, data showed Thursday. The market also has been buoyed by hopes of a deal among big global oil exporters to freeze production. On Thursday, oil rallied after major state producers, including Saudi Arabia and other members and nonmembers of the Organization of the Petroleum Exporting Countries, agreed to meet in Qatar on April 17 to discuss freezing output. Some countries indicated that participation by Iran, which had previously been a condition for an agreement, was no longer required. Details of the deal and a meeting have been in flux for weeks. Many analysts noted parallels to a similar bull market a year ago, when prices surged more than 30% between January and May, only to tumble again to new lows. "I think the rally is misguided," said John Brynjolfsson, a co-manager of the James Alpha Global Enhanced Real Return fund, which has maintained a bearish position in the oil market throughout the rally. "I don't think that amount of oil sloshing around with literally no place to go is going to sustain oil prices." One driver of gains has been short covering, in which traders who bet oil would fall close out their bets. When traders close out short sales, it can drive the market higher as they buy futures to cover the position. Short trades on the benchmark U.S. contract reached a record in January, but have fallen more than 40% since then, regulatory data showed; by contrast, bullish long bets by hedge funds have risen just 14% during that time. Even if U.S. producers seek to reverse recent output cutbacks and bring more wells back online, several obstacles remain. Oil-field-services workers who drove the production boom have been laid off or redeployed, and it will take time to staff up. And getting wells up and running again will require capital at a time when banks have been worried about producers' ability to make good on outstanding loans. Still, some analysts said the market's move above the $40-a-barrel threshold signaled a potential new phase of positive sentiment. "We now seem to be getting a new wave of interest from long" investors, said Gene McGillian, senior analyst at brokerage Tradition Energy in Stamford, Conn. "It's all based on expectations, but it's driving things." Credit: By Christian Berthelsen
Subject: Commodity prices; Crude oil
Location: United States--US
Classification: 8510: Petroleum industry; 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Mar 18, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774106519
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774106519?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Stocks Notch Fifth Straight Week of Gains; Market improving as oil prices rebound and data show U.S. economy continuing to expand
Author: Gold, Riva; Vaishampayan, Saumya
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Mar 2016: n/a.
Abstract:
Today's Highlights * The Few Brave Bets that Sparked Market's Turnaround * Worst Stock-Market Advice: Trust Your Gut * Now Showing: The Movie Loan that Blew Up on CIT Still, the gains this week have come on low trading volumes , and the rally since the stock market's trough in February has been driven in part by investors closing out their negative bets on stocks, traders say, both of which suggest that the market could be vulnerable to a pullback.
Full text: The S&P 500 erased its losses for the year Friday, joining the Dow industrials in positive territory as major indexes notched their fifth straight week of gains. The week's advance accelerated after the Federal Reserve on Wednesday signaled a more gradual path of interest-rate increases . The Dow Jones Industrial Average, which has risen for six sessions in a row, gained 2.2% this week. The S&P 500 added 1.3%. A sharp bounce in oil prices and economic data showing that the U.S. continues to expand helped calm fears of another recession, and that has driven up the Dow and the S&P 500 roughly 12% since their low on Feb. 11. Today's Highlights * The Few Brave Bets that Sparked Market's Turnaround * Worst Stock-Market Advice: Trust Your Gut * Now Showing: The Movie Loan that Blew Up on CIT Still, the gains this week have come on low trading volumes , and the rally since the stock market's trough in February has been driven in part by investors closing out their negative bets on stocks, traders say, both of which suggest that the market could be vulnerable to a pullback. "We don't think [gains] are going to be nearly as dramatic from here," said Steve Weeple, who oversees about $6 billion as a global portfolio manager at Standard Life Investments. "The reversal was pretty fast," he said. While stocks in Europe and Asia have also bounced in recent weeks, several indexes remain sharply lower for the year. China's Shanghai Composite has tumbled nearly 17%, and Germany's DAX has fallen 7.4% in 2016. Friday's move higher was driven by rebounds in some of this year's laggards, such as health-care and financial stocks. Those sectors have fallen the farthest year-to-date. Tenet Healthcare was one of the biggest gainers in the S&P 500 on Friday, rising 5.9%. The Dow rose 0.7%. The S&P 500 added 0.4%, and the Nasdaq Composite gained 0.4% Friday. Many investors say it will take more upbeat economic data in the U.S., Europe or China, as well as evidence that consumers are spending, for stocks to move much higher. "One of the criticisms of this rally has been that it has been led by distressed and out-of-favor names, like the energy sector," said Brett Mock, managing director at brokerage JonesTrading Institutional Services LLC. "Earnings will sustain or give us a new rally if they surprise to the upside, but that's a big if," he added. One of the major drags on U.S. earnings in recent quarters was the strong dollar, but that impact could be lessening. The dollar fell sharply against the euro, yen and emerging-market currencies earlier this week following a dovish statement from the Federal Reserve. The WSJ Dollar Index, which tracks the U.S. unit against a basket of 16 currencies, dropped to its lowest level since last June on Thursday. The dollar rose slightly Friday, but is still lower for the year. Treasury yields continued to fall Friday after briefly hitting 2% earlier this week. That level "is a major trigger for world-wide investors to buy 10-year Treasurys," said Chuck Self, chief investment officer at iSectors, especially when government bond yields elsewhere are so low. The yield on the 10-year note slipped to 1.876% from 1.903% on Thursday. In commodity markets, U.S. crude oil fell 1.2% to $41.61 a barrel, and gold futures fell 0.7% to $1255.60 an ounce. The Stoxx Europe 600 added 0.3% Friday, but slipped 0.2% for the week. Stocks in Shanghai ended 1.7% higher after China set its currency 0.52% stronger against the dollar in the yuan's steepest one-day fixing increase since November. Declines in the country's currency sparked turmoil in global financial markets at the start of the year. Stocks in Australia also gained, spurred by the recent rise in commodities prices, while shares in Japan fell 1.2%. Next week brings a full slate of Fed speakers and the third reading on fourth-quarter economic growth in the U.S. In the Markets * Oil Turns Lower U.S. Drilling Ticks Up * Dollar Recoups Some Losses * Gold Rally Checked by Stronger Dollar * U.S. Government Bond Yields Fall Back * Asian Shares Rise Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com and Riva Gold at riva.gold@wsj.com Credit: By Riva Gold and Saumya Vaishampayan
Subject: American dollar; Dow Jones averages; Stock exchanges; Investments
Location: China United States--US Europe
Company / organization: Name: JonesTrading Institutional Services; NAICS: 523120; Name: Tenet Healthcare Corp; NAICS: 622110, 621491; Name: Standard Life Investments; NAICS: 525990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 18, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774127526
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774127526?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The Mystery of the Missing Oil --- Tally by IEA finds 800,00 barrels a day unaccounted for, highest in 17 years
Author: Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Mar 2016: C.4.
Abstract:
Other major market monitors, like the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries, don't break down their data to show the number of missing barrels.
Full text: There is mystery at the heart of the oversupplied global oil market: missing barrels of crude. Last year, there were 800,000 barrels of oil a day unaccounted for by the International Energy Agency, the energy monitor that puts together data on crude supply and demand. Where these barrels ended up, or if they even existed, is crucial to an oil market that remains under pressure from the crude glut. Some analysts say the barrels may be in China. Others believe the barrels were created by flawed accounting and they don't actually exist. If they don't exist, then the oversupply that has driven crude prices to decade lows could be much smaller than estimated and prices could rebound faster. Whatever the answer, the discrepancy underscores how oil prices flip around based on data that investors often are unsure of. Barrels have gone missing before, but last year the tally of unaccounted-for oil grew to its highest level in 17 years. At a time when the issue of oversupply dominates the oil industry, this matters. "If the market is tighter than assumed due to the missing barrels, prices could spike quicker," said David Pursell, managing director at energy-focused investment bank Tudor, Pickering, Holt & Co. Here is how a barrel of crude goes "missing" in the data: Last year, the IEA estimated that on average the world produced around 1.9 million barrels a day more crude than there was demand for. Of that crude, 770,000 barrels went into onshore storage while roughly 300,000 barrels were in transit on the seas or through pipelines. That left roughly 800,000 barrels a day unaccounted for in the data. Global oil supply is about 96 million barrels a day. In the fourth quarter, the number of missing barrels reached as high as 1.1 million barrels a day, or 43% of the estimated oversupply during that period. The IEA collates production and demand data from around the world, and its monthly reports often move prices. Other major market monitors, like the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries, don't break down their data to show the number of missing barrels. In 1998, the last time the number of missing barrels was so high, concern over the discrepancy reached the U.S. Congress. A U.S. senator asked the Government Accountability Office, a nonpartisan agency working for Congress, to examine the IEA data. The agency found that "[statistical] limitations can introduce errors into the data, although the magnitude and direction of these errors are not clear." That is what most analysts think. "The most likely explanation for the majority of the missing barrels is simply that they do not exist," said Paul Horsnell, an oil analyst at Standard Chartered. Standard Chartered projects U.S. crude averaging $63 a barrel in the fourth quarter, an above-consensus forecast that has been shaped partly by the bank's belief that the glut is smaller than it seems. The average forecast among 13 investment banks surveyed by The Wall Street Journal last month was oil at $45 a barrel by the end of the year. West Texas Intermediate crude, the U.S. benchmark, rose $1.74 a barrel, or 4.5%, to $40.20 on Thursday, giving it a two-day gain of nearly 11%. Brent, the international gauge, rose $1.21 a barrel, or 3%, to $41.54. A spokesman for the IEA referred to the agency's website, which says that the barrels' "miscellaneous to balance" could be explained by overstated supply, understated demand or stockpile changes in countries outside the Organization for Economic Cooperation and Development. While the IEA estimates supply and demand from global data, its numbers on where the oversupply is being stockpiled come only from members of the OECD. That means that some of those barrels might be found in non-OECD countries like China. Some analysts disagree. The missing barrels have become such a large proportion of the oversupply that this would imply that stockpiles are building up in non-OECD countries at a much faster pace than those in the organization, something that they question. Analysts also point out that collecting data on oil is hard. Oil data is "an imperfect science," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. Still, Mr. Haworth said that whether these barrels are missing or not, the global glut of crude is still far from over. Credit: By Georgi Kantchev
Subject: Crude oil; Commodity prices
Location: United States--US
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 18, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774134747
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774134747?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Rally Ends as Number of U.S. Drilling Rigs Rises; Rise in actively drilling rigs raises worry that decline in output isn't coming
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Mar 2016: n/a.
Abstract:
Oil-field services company Baker Hughes Inc. said Friday that the count of drilling rigs in the U.S. rose by 1, ending three straight months of weekly declines. Since their depths last month, oil prices have rallied more than 50% in the expectation that the lower prices would curtail production, even as supply-and-demand fundamentals remained weak.
Full text: The rally in the oil market came to a halt Friday after new data showed U.S. oil producers increased the number of rigs drilling for oil--by one--raising worries that the hoped-for decline in output may not come to pass. Oil-field services company Baker Hughes Inc. said Friday that the count of drilling rigs in the U.S. rose by 1, ending three straight months of weekly declines. Since their depths last month, oil prices have rallied more than 50% in the expectation that the lower prices would curtail production, even as supply-and-demand fundamentals remained weak. The number of oil rigs actively drilling in the U.S. has fallen more than 50% from year-ago levels, but production has declined by less than 7% and still remains more than 9 million barrels a day. But the rally to the $40-a-barrel level--and the increase in the rig count, however marginal--raises the possibility that the industry has achieved a stasis of sorts before there has been any kind of substantive change in output. "One rig up is not a big deal, but it did break the streak so that changes the mood a little bit," said Phil Flynn, an account executive at brokerage Price Futures Group in Chicago. The U.S. oil benchmark, which had been as much as 2.5% higher in early trading, fell after the release of the data, ending the day down 1.9% at $39.44 a barrel. Just one day earlier, the contract broke through the $40-a-barrel level for the first time since Dec. 3. The global Brent contract also turned negative for the day, ending down 0.8% at $41.20. Both markets managed to hold on for another week of gains. The U.S. benchmark rose 2.4%, for its fifth straight rising week, while Brent rose for the fourth straight week, by 2%. The oil rally of the last several weeks has been driven by hopes that major oil producers, including countries outside the Organization of the Petroleum Exporting Countries, will join a production freeze at January levels -- with or without the cooperation of Iran, which is pushing to raise output levels in the wake of an end to international sanctions against the country. A meeting to discuss the freeze is set for April 17 in Qatar. "Expectations are building up that the parties will agree on an output freeze," said Michael Poulsen, oil analyst at Global Risk Management. "The fact that the world's largest oil producers, Saudi Arabia and Russia, will participate adds weight to the meeting even if Iran has announced it will not be present or part of the deal." Analysts said much of the recent gains also appear to be driven by this week's U.S. Federal Reserve comments that dialed down expectations for an aggressive series of interest-rate increases this year, amid a softening outlook for global growth . That can boost investments in risky assets, "driving a major influx of speculative capital back into the oil space," research consultancy Ritterbusch and Associates said in a note. Easy money "has revived oil's appeal as a favored asset class." Still, analysts say that the recent rally might not be sustainable given that crude still faces numerous headwinds after a nearly two-year price slump. "The oil-price crash was linear, but the recovery will not be," said analysts at Bank of America Merrill Lynch. The bank expects U.S. prices to fall back by the end of September because of lower driving demand and the autumn refinery-maintenance season. Refined product markets also reversed early gains Friday to end with losses. Gasoline futures dropped 0.8% to $1.4273 a gallon, while diesel futures fell 1.2% to $1.2391 a gallon. Write to Christian Berthelsen at christian.berthelsen@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Christian Berthelsen and Georgi Kantchev
Subject: Petroleum industry; Futures; Price increases
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774135617
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774135617?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Venoco Seeks Chapter 11 Protection; Denver-based oil and gas exploration company reaches deal with funds affiliated with Apollo Global and MAST Capital
Author: Palank, Jacqueline
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Mar 2016: n/a.
Abstract:
"Having extensively explored other alternatives, the debtors carefully determined that the transactions negotiated under the [restructuring agreement] represent the best alternative for the debtors to deleverage their balance sheets and emerge from chapter 11 with a new capital structure and appropriate leverage, to the benefit of all stakeholders," Venoco Chief Financial Officer and Chief Restructuring Officer Scott Pinsonnault said in court papers.
Full text: Venoco Inc. on Friday became the latest oil and gas exploration company to file for chapter 11 protection, citing the "tempest in the energy market" that has prompted dozens of its peers to enter bankruptcy. Court papers show Venoco reached a deal with funds affiliated with Apollo Global Management and MAST Capital Management, which hold Venoco secured bond debt, on a restructuring plan that would slash nearly $1 billion in debt off the Denver company's books. Venoco said it has been exploring restructuring possibilities since 2014 as oil prices began to fall and it struggled to cut costs, reduce capital expenditures and manage its cash along with a heavy debt load. Similar pressures have caused 51 other North American oil and gas producers to seek bankruptcy protection since 2015, according to law firm Haynes and Boone. Under the deal Venoco reached with the bondholders, it will seek broad creditor support and court approval for a chapter 11 plan of reorganization that court papers show proposes to swap $195 million in secured first-lien bond debt with 90% of the new common shares in the restructured company. The holders of secured second-lien bonds, owed $172 million, and the holders of senior unsecured bonds, owed about $308 million, would get warrants to purchase the remaining shares. Unsecured creditors would receive cash under the plan, while current shareholders would be wiped out. The bondholder agreement requires Venoco to secure court approval for its restructuring plan within the next five months and exit chapter 11 soon thereafter. "Having extensively explored other alternatives, the debtors carefully determined that the transactions negotiated under the [restructuring agreement] represent the best alternative for the debtors to deleverage their balance sheets and emerge from chapter 11 with a new capital structure and appropriate leverage, to the benefit of all stakeholders," Venoco Chief Financial Officer and Chief Restructuring Officer Scott Pinsonnault said in court papers. To fund the costs of the chapter 11 case and allow the company to continue operating, Venoco is seeking court approval for up to $35 million in bankruptcy from funds affiliated with Apollo. MAST Capital was supposed to have joined the financing, but Venoco said it pulled out this month. Venoco said it reached the restructuring deal after electing not to make a $13.7 million interest payment that came due Feb. 16 on its senior unsecured bonds. It had a 30-day grace period to make the payment and avoid default, but the bankruptcy filing gives the company breathing space. The Denver company reported assets of $100 million to $500 million and debts of $500 million to $1 billion in its chapter 11 petition, filed with the U.S. Bankruptcy Court in Wilmington, Del. Six affiliated companies joined Venoco in filing for bankruptcy, court papers show. Founded in 1992, Venoco primarily explores for oil in locations offshore and onshore in southern California. About 160 full-time employees work for the company. Write to Jacqueline Palank at jacqueline.palank@wsj.com Credit: By Jacqueline Palank
Subject: Bankruptcy reorganization; Bankruptcy; Litigation; Capital expenditures; Energy industry; Debt restructuring
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 18, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774185615
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774185615?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The Oil-Price Rally: Why Energy Stocks Won't Share the Spoils Equally; Energy stocks have risen with oil prices, but not uniformly. They may now be fairly priced, or even expensive
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Mar 2016: n/a.
Abstract:
[...]some energy companies are less sensitive to prices in the near term because they were fortunate enough to hedge their output at higher ones using derivatives.
Full text: A rising tide may lift all boats, but that boost gets uneven when the tide is black and sludgy. Oil prices are more than 50% higher than they were in early February and the U.S. benchmark, West Texas Intermediate, has now reclaimed the $40 a barrel level . That should be great news for energy producers. It is, but to varying degrees. The one-third rally in the S&P Oil & Gas Exploration & Production Select Industry Index over the same period may appear muted by comparison. If anything, though, energy company valuations look a bit stretched. For one thing, the share price of an energy producer isn't reflective of today's oil price. Rather, it discounts many years of output and income. The prices at which those still-underground barrels can be sold in coming years are reflected and can even be locked-in in the futures market. It does anticipate higher prices to come, but the slope of that appreciation is less steep than it was a month ago. Long-dated futures expiring in 2021 have appreciated by only around 10%. So the long-term earnings power of these companies isn't actually as great as the rise in the spot price would suggest. Then there is the thorny fact that many North American E&P companies depend heavily on natural gas in addition to oil. Prices for that commodity are slightly lower than they were a month ago and recently hit depths not seen this century as traders fear a devastating summer glut . And what type of hydrocarbon an energy company pumps out of the ground isn't the only thing that matters. The where is important, too. Offshore, oil sands, conventional onshore and shale all have different break-even prices. Even various shale formations vary in their characteristics and so their profitability . Finally, some energy companies are less sensitive to prices in the near term because they were fortunate enough to hedge their output at higher ones using derivatives. Many of these were made a couple of years ago and are expiring. Add all these factors together and the benefit of the recent oil-price recovery varies significantly by company. For example, analysts at Citigroup estimate that a $1 a barrel increase in their estimated 2016 average oil price would boost the cash flow per share of Hess and Marathon Oil by a meaningful 3.5% and 2.7%, respectively. But the same would boost Antero Resources and Range Resources by a mere 0.4% and 0.3%, respectively. With so many moving parts, drawing a link between energy prices and the entire energy sector gets complicated. Nevertheless, analysts at Wolfe Research think valuations imply a long-term oil price of $60. That requires some faith in a continued recovery with prices now just hitting $40 and analyst forecasts only calling for U.S. benchmark prices to average at least $60 in 2018. A full embrace of the still beaten-down sector after its rally hinges on some crude calculations. Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Subject: Prices; Energy industry; Petroleum industry
Location: United States--US
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Marathon Oil Corp; NAICS: 486110, 324110, 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 18, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774190993
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774190993?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Oil Glut Forces Eni to Slim Down
Author: Sylvers, Eric
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Mar 2016: B.3.
Abstract:
Earlier this month Royal Dutch Shell PLC quit a major gas project in the United Arab Emirates, while Exxon Mobil Corp. has promised to cut capital expenditure by 25% this year.
Full text: Eni SpA on Friday announced plans for 13 billion euros ($14.71 billion) in cost cuts and asset sales, becoming the latest major energy company to further adjust its strategy to the oil price slump. Eni, Italy's largest company by market value, said by 2019 it would sell 7 billion euros in assets, mostly stakes in recently discovered oil and gas fields. That is on top of 8 billion euros of asset sales announced last year, most of which have been achieved. The company plans 6 billion euros in cost cuts, with more than half coming from renegotiating pacts with suppliers and contractors. Oil companies are still coming to terms with lower crude prices, which began falling in mid-2014 and despite a recent rebound remain almost 75% below the high reached two years ago. Earlier this month Royal Dutch Shell PLC quit a major gas project in the United Arab Emirates, while Exxon Mobil Corp. has promised to cut capital expenditure by 25% this year. Last year, Eni lowered its break-even point for new projects to $27 a barrel, from $45 a barrel in 2014, Chief Executive Claudio Descalzi said at a presentation on Friday. Eni now sees Brent crude at $40 this year and $50 in 2017, compared with forecasts of $70 and $80, respectively, made last year. The global benchmark is currently hovering near $30 a barrel, "We have become leaner and more resilient," Mr. Descalzi said. The moves are a bid to get Eni back to churning out profit after a difficult 2015. For the fourth quarter, when Brent averaged just under $44 a barrel, Eni lost 8.46 billion euros as revenue plunged 33%. The huge loss came as BP PLC reported one of its largest-ever annual losses and Exxon posted its smallest quarterly profit since 2002. Mr. Descalzi said the gathering of members and nonmembers of the Organization of the Petroleum Exporting Countries set for next month promises to be "historic." "The meeting will stabilize the situation, and we can get a balance between supply and demand by October-November," he said. "Then there is the question of all the stocks of oil that have been stored. We don't know how much there is there." Eni, which is 30%-owned by the Italian government, has been among the most successful in the industry in recent years at finding new oil and gas fields and has often sold stakes early on to share development costs. Last year it made a huge natural-gas discovery off the coast of Egypt, which Mr. Descalzi confirmed will be producing by the end of next year. Stakes in the Egyptian field and in another massive gas project in Mozambique, of which Eni owns 50%, are among the assets slated for sale. Eni sold a 20% stake in the Mozambique field three years ago for $4 billion and has been looking to sell part of its remaining holding for several years. Mr. Descalzi said discussions continue with potential buyers and that a sale could happen this year. He said that Eni's four-year plan envisions annual production of oil and gas growing an average of 3% through 2019. Libya, where Eni is the largest foreign energy producer, remains "strategic" and has huge potential, Mr. Descalzi said. Even as the country remains mired in conflict, Eni made a new discovery there last year. Credit: By Eric Sylvers
Subject: Cost reduction; Petroleum industry
Location: Italy
Company / organization: Name: Eni SpA; NAICS: 324110, 211111
Classification: 8510: Petroleum industry; 9175: Western Europe
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Mar 19, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774293466
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774293466?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Airlines Pull Back on Hedging Fuel Costs; Reappraisal of costly strategy comes after some carriers get burned by low oil prices
Author: Carey, Susan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Mar 2016: n/a.
Abstract:
[...]airlines' exposure to fuel costs can be more obvious to consumers, who often feel it in the form of higher ticket prices and international fuel surcharges when oil prices rise. In Europe, after "huge" hedge losses last year, some of the largest carriers are hedging less of their future consumption, said Andrew Lobbenberg, an analyst for HSBC Bank PLC. While a geopolitical crisis could quickly push up oil prices again, experts said airlines with good credit could easily jump back into the futures market, although it would be costly.\n
Full text: After decades of spending billions of dollars to hedge against rising fuel costs, more airlines, including some of the world's largest, are backing off after getting burned by low oil prices. When oil prices were rising, hedging often paid off for the airlines, helping them reduce their exposure to higher fuel costs. But the speed of the 58% plunge in oil prices since mid-2014 caught the industry by surprise and turned some hedges into big money losers. Last year, Delta Air Lines Inc., the nation's No. 2 airline by traffic, racked up hedging losses of $2.3 billion, while United Continental Holdings Inc., the No. 3 carrier, lost $960 million on its bets. Meanwhile, No. 1-ranked American Airlines Group Inc., which abandoned hedging in 2014, enjoyed cheaper fuel costs than many of its rivals as a result. "Hedging is a rigged game that enriches Wall Street," said Scott Kirby, the airline's president, said in an interview. Now, much of the rest of the industry is rethinking the costly strategy of using complex derivatives to lock in fuel costs, airlines' second-largest expense after labor. Somes airlines have decided that, with oil prices weak, the potential benefits from hedging may no longer justify the risks. Delta and United said they have no hedges in place for next year. Smaller U.S. carriers, including JetBlue Airways Corp. and Spirit Airlines Inc., have been minimizing their hedges, according to their public filings. Even in Europe, where carriers have been big advocates of hedging, some airlines are scaling back. "We don't need to hedge that risk like we used to," said Gerry Laderman, acting chief financial officer of United. "That doesn't mean that hedging is off the table. We are looking at formulating...a different way of thinking about it." In hedging, airlines enter into financial contracts that get more valuable as oil or fuel prices rise, offsetting the run-up in prices. But the reverse is also true. The value of these contracts fall when prices fall, creating trading losses--in some cases large ones--and canceling out the benefit of the cheaper fuel. Oil prices, which peaked at $147 a barrel in 2008, are currently at around $41 a barrel, after rising from a 13-year low of $26 in mid-February. Some analysts and traders think the recent rally won't hold amid a global oil glut, and that prices will remain weak for some time. Another factor in the hedging pullback: a round of megamergers, capacity cuts and more fuel-efficient aircraft have fattened the industry's profits, leaving carriers in better financial shape--and less vulnerable to a spike in fuel prices. Airlines aren't the only companies that have relied on hedging. Meat processors and other food manufactures might hedge to protect themselves from price swings of key raw materials like hogs or wheat. But airlines' exposure to fuel costs can be more obvious to consumers, who often feel it in the form of higher ticket prices and international fuel surcharges when oil prices rise. American swore off hedging after merging with US Airways Group. Most of its postmerger executives hail from US Airways, which abandoned the futures markets in 2008. Deep discounter Allegiant Air stopped hedging in 2007. Canada's low-fare WestJet Airlines Ltd. gave it up a few years ago. Delta, which bought its own refinery in 2012 to control some of its supply, recently closed its hedge book. It expects to book further losses of $100 million to $200 million in each of the final three quarters of this year. While Delta said it remains committed to hedging, it hasn't had a gain from the practice since the second quarter of 2014. But the company still expects the weaker oil market to pare this year's fuel tab by $3 billion from 2015, Paul Jacobson, its chief financial officer, said in an interview. United's hedge position, which covers 17% of its fuel consumption this year, stood at a loss position of $225 million in January. Most of that deficit stems from hedges placed in 2014. United hasn't added any new hedges since last July. "This is the least hedged we've been in quite a while," said Mr. Laderman, the CFO. Asian and European airlines have tended to rely more heavily on hedging because they must spend U.S. dollars to buy fuel but collect most of their revenue in other, and recent weaker, currencies. In Europe, after "huge" hedge losses last year, some of the largest carriers are hedging less of their future consumption, said Andrew Lobbenberg, an analyst for HSBC Bank PLC. While a geopolitical crisis could quickly push up oil prices again, experts said airlines with good credit could easily jump back into the futures market, although it would be costly. "It's always possible we'd hedge in the future," Bob Fornaro, chief executive of Spirit Airlines, which is unhedged for this year. Southwest Airlines Co.'s successful hedge strategy in the 2000s culminated in a $1.3 billion hedge gain in 2008. Over the next few years, however, Southwest routinely lost money on its hedges. It estimated in January that its 2016 hedge book--for 20% of its consumption--was $1 billion underwater, meaning the airline will pay 50 cents to 60 cents more per gallon for jet fuel than some rivals. Even so, Chris Monroe, vice president and treasurer, estimates that hedging shaved $2 billion off Southwest's fuel bill between 2001 and 2015. He said the carrier continues to see value in it. "It's like having a teenage-boy driver living right in the middle of your income statement," he said. "You need some insurance on him." Write to Susan Carey at susan.carey@wsj.com Credit: By Susan Carey
Subject: Airlines; Airline industry; Prices; Chief financial officers
Location: United States--US
Company / organization: Name: JetBlue Airways Corp; NAICS: 481111; Name: Spirit Airlines Inc; NAICS: 481111; Name: American Airlines Group Inc; NAICS: 551114; Name: Delta Air Lines Inc; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 20, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774436682
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774436682?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further repro duction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Futures Continue Slide in Asia Following U.S. Rig Data; May Brent crude on London's ICE Futures exchange fell 25 cents to $40.95 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2016: n/a.
Abstract:
Data on the number of oil drilling rigs in the U.S. showed the first increase in three straight months on Friday, sending prices tumbling and underscoring the relatively quick response time by U.S. shale drillers to a price rebound.
Full text: Oil prices continued their slide in Asia trading hours Monday, amid signs that crude-oil supplies are rebounding. Data on the number of oil drilling rigs in the U.S. showed the first increase in three straight months on Friday, sending prices tumbling and underscoring the relatively quick response time by U.S. shale drillers to a price rebound. "On the global scale, the amount of supply still tilts toward the oversupply status," said Daniel Ang, investment analyst at Phillip Futures in Singapore. "It is possible prices could fall further, at least in the short term." On the New York Mercantile Exchange, light, sweet crude futures for delivery in April fell 46 cents, of 1.2%, at $38.98 a barrel in the Globex electronic session. May Brent crude on London's ICE Futures exchange fell 25 cents to $40.95 a barrel. Nymex crude prices are down more than 3% from their 2016 high reached last week. Indications that major oil producers were moving toward a supply freeze helped fuel a March oil-market rally after prices tumbled to a multiyear low of less than $27 a barrel in February. A supply freeze still remains a possibility, and analysts say such a step could drive prices still higher if it goes into effect. Major oil producers, including members of the Organization of the Petroleum Exporting Countries, are set to discuss a freeze in output at January levels at a meeting in Qatar on April 17. A wildcard remains Iran, which is pushing to raise its own output following the lifting of international sanctions against the country. Meantime, the U.S. Federal Reserve has indicated it expects to keep interest rates lower for longer than initially expected. That could give a fresh lift to oil prices by depressing the dollar, which tends to trade opposite the value of dollar-denominated crude oil. "The broad trade-weighted [U.S. dollar] has been a key driver of oil markets during this entire oversupply period," according to analysts at Morgan Stanley. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--fell 67 points to $1.4206 a gallon, while April diesel traded at $1.2352, 39 points lower. ICE gas oil for April changed hands at $369.50 a metric ton, down $5.50 from Friday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Petroleum industry; Futures; Crude oil prices
Location: United States--US Asia Singapore
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774448938
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774448938?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Rise Late in Trading; But investors remain focused on glut that has weighed on the market
Author: Berthelsen, Christian; Kantchev, Georgi; Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2016: n/a.
Abstract:
The oil price rally has been largely fueled by indications that major state oil producers were moving toward an agreement to limit production, which analysts said could drive prices higher still if it goes into effect.
Full text: Oil prices rose Monday after a quiet session trading little changed, as investors focused on the persistent supply glut that has weighed on the market. The U.S. oil benchmark for April delivery rose 1.2% to settle at $39.91 a barrel on the New York Mercantile Exchange. The April contract expired with the close of trading Monday; most of the trading volume in the market has moved forward into the May contract, which ended 0.9% higher at $41.52 a barrel. The market wavered between gains and losses throughout the day but turned solidly positive in the final minutes of the session. The global Brent contract rose 0.8% to $41.54 a barrel on the ICE Futures Europe exchange. The market was buoyed by reports that a private data provider said oil inventories at the key U.S. delivery hub in Cushing, Okla., declined last week, a bullish signal since stockpiles there have grown surprisingly close to full capacity in recent weeks. The official data will be released Wednesday by the U.S. Energy Department. Otherwise, there was little new in the way of fundamental supply-and-demand information in the market Monday, leaving investors to focus on developments of the past week that suggest conditions are becoming more bearish despite a more-than 50% market rally since early February. Speculators have been getting progressively more bullish on the market, slashing short trades and adding long ones, with their net bullish positions now at their highest level since last June, data from the Commodity Futures Trading Commission said Friday. "Our market is so oversupplied," said Robert Yawger, director of the futures division at Mizuho Securities USA. Data released Friday on the number of oil drilling rigs in the U.S. showed the first increase in three straight months. That sent prices tumbling , underscoring the relatively quick response time by U.S. shale drillers to a price rebound. "One week does not make a trend," Dominick Chirichella, oil analyst at the Energy Management Institute, said in a note, but "the oil rig count could start to slowly turn upward or at least start to bottom out." This could mean the decline in U.S. oil production is smaller than analysts have predicted, Mr. Chirichella added. U.S. output has been stable at around 9.1 billion barrels a day in recent months, down from a peak of 9.7 million barrels in April last year. Meanwhile, oil stockpiles are growing, adding further pressure on prices. U.S. oil product stocks are roughly 90 million barrels above 2015 levels. "Combine this with 2015 product inventories at 75 million barrels above 2014 levels, and there is cause for concern regarding the market's ability to clear refinery output," analysts at Barclays said in a report. The oil price rally has been largely fueled by indications that major state oil producers were moving toward an agreement to limit production, which analysts said could drive prices higher still if it goes into effect. A meeting of members and nonmembers of the Organization of the Petroleum Exporting Countries to discuss freezing output at January levels is scheduled for April 17 in Qatar. But Iran, which is pushing to raise its own output following the lifting of international sanctions against the country, has indicated it won't participate until its production reaches 4 million barrels a day, 1 million barrels above its reported January level. In refined product markets, gasoline futures rose 2.2% to $1.4589 a gallon, while diesel futures fell 0.1% to $1.2374 a gallon. Write to Christian Berthelsen at christian.berthelsen@wsj.com , Georgi Kantchev at georgi.kantchev@wsj.com and Dan Strumpf at daniel.strumpf@wsj.com Credit: By Christian Berthelsen, Georgi Kantchev and Dan Strumpf
Subject: Petroleum industry; Inventory; Futures; Petroleum production
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Commodity Futures Trading Commission; NAICS: 926140, 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774508587
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774508587?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
China Oil Imports Rise to Fresh High in February; China's crude imports hit a fresh high in February as the government and local refineries continued to take full advantage of the prolonged low oil prices.
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2016: n/a.
Abstract:
While China's economy growth has been slowing, the world's second-largest energy consumer remains a bright spot for crude suppliers, thanks to the government's aggressive effort to fill up its strategic petroleum reserves and robust oil demand from local independent refineries known as teapot refiners.
Full text: HONG KONG--China's crude imports hit a fresh high in February as the government and local refineries continued to take full advantage of the prolonged low oil prices. China's General Administration of Customs confirmed Monday that February crude-oil imports rose 24.4% from a year earlier to 31.8 million metric tons, equivalent to roughly 8 million barrels a day, the highest daily average on record. While China's economy growth has been slowing, the world's second-largest energy consumer remains a bright spot for crude suppliers, thanks to the government's aggressive effort to fill up its strategic petroleum reserves and robust oil demand from local independent refineries known as teapot refiners. Many teapot refiners have been increasingly buying up crude from neighboring countries, raising imports from countries like Indonesia, Vietnam and Malaysia, said Virendra Chauhan, an oil analyst at Energy Aspects. "They have less flexibility in that they can't import crude from further afield because they can't hedge," Mr. Chauhan said. "They want regional crude." Analysts say the dozen of the teapot refineries that have been approved to import foreign crude currently account for around 10% to 12% percent of the China's total crude imports. In 2015, China's crude imports grew 8.8% and are projected expand another 6% this year, said Song Yen Ling, an analyst for Platts China Oil Analytics. In February, China's diesel imports rose to 33,331 tons, while diesel exports rose almost 600% to 792,422 tons, the data showed. Gasoline imports rose by 117% to 864,152 tons and exports rose 168% to 600,854 tons in the same month. Kerosene imports fell 40% to 230,389 tons, while fuel oil imports were down 33% at 1.1 million tons. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Petroleum refineries; Imports; Petroleum industry
Location: China Vietnam Malaysia Indonesia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 21, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774515206
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774515206?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Regulator Urges Canadian Banks to Review Oil and Gas Reserves; Collapse in oil prices has taken a toll on the Canadian economy
Author: Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2016: n/a.
Abstract: None available.
Full text: TORONTO--Canada's banking regulator is urging the country's major banks to review their accounting practices to ensure they have sufficient reserves as the commodity-price collapse takes a toll on the economy. The Office of the Superintendent of Financial Institutions wants lenders to scrutinize their collective allowances, reserve funds that act as cushions to absorb potential future loan losses, the regulator's chief said in an interview. "We want them to take a good look at their accounting practices," said Superintendent of Financial Institutions Jeremy Rudin. "They should support loss-absorbing capacity and the ability to manage through difficult times in general," he added. The regulator is giving the country's six biggest banks this guidance on their accounting as they face mounting criticism from some analysts that they haven't amassed enough reserves to cover soured loans to the energy sector. That criticism was a recurring theme during calls following their fiscal first-quarter results, in which many banks warned of rising provisions for credit losses but assured investors their rainy-day cushions were adequate. Canadian bank shares have tumbled over the past year as the price of oil has collapsed, but the S&P/TSX Composite Bank Index is now up about 16.45% from its low in February, reflecting a rebound in oil . Still, oil prices remain an overhang for banks, underscoring the size of the energy industry in the Canadian economy and concerns that lenders will eventually be stung by higher loan losses. Energy loans totaled 49.7 billion Canadian dollars ($38.2 billion) for the country's six biggest banks during the November-to-January quarter, according to a report by TD Securities Inc. Bank of Nova Scotia, Canada's third-largest bank by assets, has the biggest direct oil and gas exposure at 3.6% of total loans. Some analysts are skeptical about the lenders' reserving practices in part because U.S. banks, including J.P. Morgan Chase & Co. and Wells Fargo & Co., have set aside millions more for their reserves as they brace for bigger energy-related losses. Mr. Rudin declined to say whether Canadian banks are under-reserved compared with their U.S. peers. Nor did he offer an opinion on whether analysts voicing such criticisms were misinformed. Most banks declined to comment, including on how they have responded to the regulator's guidance. "We have no comment on this specifically, but are confident in our current provisioning practices," said Ali Duncan Martin, a spokeswoman for Toronto-Dominion Bank, Canada's No. 2 lender by assets, in an email. A spokeswoman for an industry group representing the lenders, the Canadian Bankers Association, said that Canadian banks aren't under-reserved. Bank executives have stressed that accounting differences between Canadian and U.S. banks affect how lenders build reserves in each country. Canadian banks use an "incurred-loss model" which means they generally take provisions once a loan loss is identified. U.S. banks have moved toward an "expected loss" model that involves taking more proactive provisions. Canadian banks plan to move toward an expected-loss model over the coming years to conform with global norms. Diminishing the gap between the two accounting systems "seems like a sensible thing to do," Mr. Rudin said. Canadian banks tend to disclose their energy exposures as a percentage of total loans, but it is difficult to make a direct comparison with U.S. lenders. For instance, Canadian portfolios include large amounts of insured residential loans that are essentially risk-free because they are backstopped by the federal government. Canada's banks have also been criticized by analysts for providing varying degrees of detail about their energy lending books--such as the proportion of reserve-based loans and the amount considered "investment grade"--and about their stress-testing of loan portfolios. "I'm concerned about this," said James Shanahan, an equity analyst with Edward Jones, in a recent interview. "The banks aren't really saying a whole lot about the true underlying quality of these [energy] portfolios," he later added. He's among the analysts calling on Canadian banks to provide more disclosure on their energy exposure, including how much covenant relief is being provided to distressed borrowers. That could prove to be a key issue in the spring borrowing base redeterminations. Mr. Rudin declined to specify what role, if any, OSFI would play in those upcoming reviews, saying only banks are expected to have a "robust credit assessment process" that is frequently reviewed by the regulator. Issues, such as covenant relief, are "business decisions" best left to the individual banks, he added. "We have a very high-quality, high investment-grade portfolio," said Sean McGuckin, Scotiabank's chief financial officer, in an interview on March 1 following the lender's earnings release. "We go up and down this portfolio, name by name, on a constant basis. We know the details versus [analysts] on the outside," he later added. Write to Rita Trichur at rita.trichur@wsj.com Credit: By Rita Trichur
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 17745650 31
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774565031?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Repo Failures at Highest Level Since 2008; Shift in sentiment is cited after Feb. 11 low for U.S. stock indexes, oil-futures prices and Treasury yields
Author: Burne, Katy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2016: n/a.
Abstract:
In a typical transaction, an entity such as a money-market mutual fund lends cash to a broker or other financial intermediary in exchange for bonds and a promise that the borrower will repurchase the securities at a later date for an agreed-upon price.
Full text: Settlement failures in Treasury repurchase transactions in March hit their highest level since 2008, underscoring concerns on Wall Street that trading conditions are apt to deteriorate in even the most-liquid markets under the acute stress evident early this year. Almost 13% of Treasury repos through primary dealers in the week ended March 9 included a failure by one party to deliver securities as promised, according to the latest data available from the Federal Reserve Bank of New York. That is up from 2.7% last year and the highest ratio since 2008, said Joseph Abate, an analyst at Barclays PLC. Repos are an obscure but integral part of day-to-day funding for financial firms. In a typical transaction, an entity such as a money-market mutual fund lends cash to a broker or other financial intermediary in exchange for bonds and a promise that the borrower will repurchase the securities at a later date for an agreed-upon price. Participants cited a host of factors for the jump in failures, including the marked shift in market sentiment following the Feb. 11 low for U.S. stock indexes, oil-futures prices and Treasury yields. A shortage of sought-after securities in repo trades has made it more expensive for hedge funds to repurchase specific notes to close out short sales, under which they borrow the notes and sell them in a bet that prices on the securities will fall. Other drivers of the failures jump included a reduction in Treasury-auction sizes as the government's fiscal deficit falls, and the gathering impact of rules prompting banks to shrink their holdings of specific securities, traders said. "There is a lot more thought about how dealers are going to use the balance sheets they have, because it is more challenging from a regulatory perspective," said Mark Cabana, Bank of America Merrill Lynch interest-rates strategist. Analysts and traders warn that problems in repo trading could ripple through wider bond markets, creating funding difficulties for firms and governments and potentially obscuring important economic signals. One concern is that scarcity in repos will pressure rates and could complicate efforts by the Federal Reserve to lift interest rates. The Fed raised the federal-funds rate in December for the first time in nine years and has signaled it aims to raise rates again twice this year. The scramble of market participants to get their hands on Treasurys needed to complete trades is evident in the plunging interest rates charged on certain bonds through repo trading. Related * Sharp Swings Intensify Worries About Vulnerability in Bond Markets (March 9) * Nine Banks Tapped to Provide Regulators With Repo Data (March 1) * Use of Fed's Foreign Repo Program Grows (Feb. 21) Three weeks after the Treasury Department lowered the issue size of a 10-year note in mid-February by about $1 billion, Mr. Cabana said, the note maturing in February 2026 traded at minus-3.10%, reflecting a scramble by traders to acquire the note. The negative rate means that instead of lenders receiving an interest rate on their cash and bonds as collateral, they were forgoing that interest and instead paying to get the notes to make deliveries on time. When that happens, traders refer to the note as "special." Specials rates apply when there is significantly high demand for that security, for example to bet against it, or holders are reluctant to lend it out. While the "specialness" tends to work its way through in a few weeks as demand ebbs, the pattern of dealers failing to deliver bonds has been under scrutiny for about a decade, and a penalty charge was imposed on delivery failures in 2009. At the same time, traders said that a steadying of market sentiment in recent weeks likely means Treasury repo failures will fall when the next round of data are released. Write to Katy Burne at katy.burne@wsj.com Credit: By Katy Burne
Subject: Interest rates; Central banks; Federal Reserve monetary policy; Funding; Treasuries
Company / organization: Name: Barclays PLC; NAICS: 522110, 523110, 551111; Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: Federal Reserve Bank of New York; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774574954
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774574954?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
OPEC Official Says Some Members May Not Attend Doha Freeze Meeting; Qatar hosting April gathering of oil producers including OPEC, non-OPEC members
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2016: n/a.
Abstract:
Some members of the Organization of the Petroleum Exporting Countries may not attend a meeting in Qatar next month at which oil producers plan to discuss a global pact to freeze production to support prices, OPEC's secretary-general Abdalla Salem el-Badri said Monday.
Full text: Some members of the Organization of the Petroleum Exporting Countries may not attend a meeting in Qatar next month at which oil producers plan to discuss a global pact to freeze production to support prices, OPEC's secretary-general Abdalla Salem el-Badri said Monday. "I hear that about 15 countries are going to attend. Maybe some of our members will not attend. Some of non-OPEC members will not attend but 15 or 16 countries are major producers and are not a bad number," Mr. Badri said at a news conference in Vienna. Related * Saudis Open to Oil-Production Freeze Without Iran (March 16, 2016) * Iran Balks at Committing to Capping Its Oil Production (Feb. 17, 2016) * Saudi Arabia, Russia, Qatar, Venezuela Agree to Freeze Oil Output (Feb. 16, 2016) Qatar said last week that it would host a meeting on April 17 in Doha for oil producers both inside and outside OPEC, the cartel that controls a third of the world's crude production. The meeting would be a follow-up to a Feb. 16 pact among Saudi Arabia, Russia, Qatar and Venezuela to freeze their output at January levels in a bid to bring oil supply back in line with demand and raise prices that hit 12-year lows this year. On any given day, global oil supply of about 96 million barrels outstrips demand by almost two million barrels. Mr. Badri said that the freeze talks have already positively affected prices, but it was too early to say whether producers could decide on other actions in the future to stabilize prices at a later stage. "Let us now go step by step. Let us now go to the freeze and see what will happen, and then we will talk about other steps in the future," he said. "I hope it will be a successful meeting. I hope that the prices have bottomed (out) now. I don't expect prices will go high but I think they will go to a moderate level," Mr. Badri said. An agreement would have limited effect if it didn't include Iran. The world's seventh-largest oil producer is trying to ramp up its output now that international sanctions have ended. Iran's oil minister, Bijan Zanganeh, has said his country won't consider joining until its production reaches four million barrels a day, up from about 3.2 million barrels a day currently. Mr. Zanganeh had initially expressed support for the freeze without committing to it. But after Saudi oil minister Ali al-Naimi appeared to insist at a Houston conference last month that Iran join the cap, Mr. Zanganeh publicly attacked the deal as "a joke" and said other producers should "leave us alone." Mr. Badri said it is up to Iran whether it participates in the oil freeze, and it may join the plan in the future. "They are not objecting to the meeting, but they have some conditions for the production and maybe in the future they will join the group," he said. The comments come after Persian Gulf OPEC officials said last week that Saudi Arabia, the world's largest oil exporter, Kuwait and their allies would limit their oil output even if Iran doesn't follow suit, a change in tone that paves the way for curbs on crude production to be set next month. Saudi Arabia and its allies still want Iran to put the brakes on its output, but no longer want its opposition to stand in the way of a deal seen as helping the kingdom during dark economic times. Mr. Badri added that "at this time, the only problem I see is the overhang above five-year average of stocks, about 300 million barrels." "If we are able to get rid of this 300 million barrels, the overhang, then the price will come back to normal," he said. Write to Summer Said at summer.said@wsj.com Credit: By Summer Said
Subject: Petroleum industry; Cartels; Petroleum production
Location: Iran Russia Qatar Saudi Arabia
People: Naimi, Ali I
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publicationsubject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774578356
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774578356?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Magnum Hunter Learns From Sabine Ruling; The influence of a New York court's closely watched ruling on the fate of an oil and gas company's pipeline agreements is starting to be felt in Delaware.
Author: Palank, Jacqueline
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2016: n/a.
Abstract:
Earlier this month, Judge Shelley Chapman of the U.S. Bankruptcy Court in Manhattan ruled that Sabine Oil & Gas Corp., a portfolio company of First Reserve Corp., could scrap pipeline agreements it struck before commodity prices sank.
Full text: The influence of a New York court's closely watched ruling on the fate of an oil and gas company's pipeline agreements is starting to be felt in Delaware. Earlier this month, Judge Shelley Chapman of the U.S. Bankruptcy Court in Manhattan ruled that Sabine Oil & Gas Corp., a portfolio company of First Reserve Corp., could scrap pipeline agreements it struck before commodity prices sank. However, her ruling wasn't binding for procedural reasons. She said an adversary proceeding was needed to address "the substantive legal disputes" related to Sabine's request. Those disputes include the pipeline operators' arguments that the agreements "run with the land"--that is, that they're inextricably linked to the land where Sabine operates and therefore can't be rejected in chapter 11. Magnum Hunter Resources, which is under chapter 11 protection in Wilmington, Del., cites the Sabine ruling in connection with a newly filed (and heavily redacted) request to exit a gas-purchase agreement with Oneok Rockies Midstream. In addition to the rejection motion that Magnum Hunter filed, the typical way companies in bankruptcy seek to get out of burdensome deals, it has also filed an adversary proceeding asking the court to rule that the Oneok agreement doesn't "run with the land." Of course, the Delaware court doesn't have to follow the New York court's ruling, but Magnum Hunter's lawyers at Kirkland & Ellis LLP (which also represents Sabine) said it can take note of the decision. Magnum Hunter, which sought chapter 11 protection in December, recently reached a settlement on a separate request to tear up its pipeline agreement with Texas Gas Transmission LLC. The deal, which is subject to court approval at an upcoming hearing, would give Texas Gas a $15 million claim in Magnum Hunter's bankruptcy. http://www.sabineoil.com http://www.firstreserve.com Write to Jacqueline Palank at jacqueline.palank@wsj.com. Follow her on Twitter at @PalankJ Write to Jacqueline Palank at jacqueline.palank@wsj.com Credit: By Jacqueline Palank
Subject: Agreements; Bankruptcy reorganization; Pipelines; Bankruptcy; Litigation
Location: Delaware New York
Company / organization: Name: Kirkland & Ellis; NAICS: 541110; Name: First Reserve Corp; NAICS: 523920; Name: Sabine Oil & Gas Corp; NAICS: 211111, 211112; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 21, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774578358
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/doc view/1774578358?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil and Gas Company Venoco Seeks Chapter 11 Protection; Venoco Inc. on Friday became the latest oil and gas exploration company to file for chapter 11 protection, citing the "tempest in the energy market" that has prompted dozens of its peers to enter bankruptcy.
Author: Palank, Jacqueline
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2016: n/a.
Abstract:
"Having extensively explored other alternatives, the debtors carefully determined that the transactions negotiated under the [restructuring agreement] represent the best alternative for the debtors to deleverage their balance sheets and emerge from chapter 11 with a new capital structure and appropriate leverage, to the benefit of all stakeholders," Venoco Chief Financial Officer and Chief Restructuring Officer Scott Pinsonnault said in court papers.
Full text: Venoco Inc. on Friday became the latest oil and gas exploration company to file for chapter 11 protection, citing the "tempest in the energy market" that has prompted dozens of its peers to enter bankruptcy. Court papers show Venoco reached a deal with funds affiliated with Apollo Global Management and MAST Capital Management, which hold Venoco secured bond debt, on a restructuring plan that would slash nearly $1 billion in debt off the Denver company's books. Venoco said it has been exploring restructuring possibilities since 2014 as oil prices began to fall and it struggled to cut costs, reduce capital expenditures and manage its cash along with a heavy debt load. Similar pressures have caused 51 other North American oil and gas producers to seek bankruptcy protection since 2015, according to law firm Haynes and Boone. Under the deal Venoco reached with the bondholders, it will seek broad creditor support and court approval for a chapter 11 plan of reorganization that court papers show proposes to swap $195 million in secured first-lien bond debt with 90% of the new common shares in the restructured company. The holders of secured second-lien bonds, owed $172 million, and the holders of senior unsecured bonds, owed about $308 million, would get warrants to purchase the remaining shares. Unsecured creditors would receive cash under the plan, while current shareholders would be wiped out. The bondholder agreement requires Venoco to secure court approval for its restructuring plan within the next five months and exit chapter 11 soon thereafter. "Having extensively explored other alternatives, the debtors carefully determined that the transactions negotiated under the [restructuring agreement] represent the best alternative for the debtors to deleverage their balance sheets and emerge from chapter 11 with a new capital structure and appropriate leverage, to the benefit of all stakeholders," Venoco Chief Financial Officer and Chief Restructuring Officer Scott Pinsonnault said in court papers. To fund the costs of the chapter 11 case and allow the company to continue operating, Venoco is seeking court approval for up to $35 million in bankruptcy from funds affiliated with New York firm Apollo. MAST Capital was supposed to have joined the financing, but Venoco said it pulled out this month. Venoco said it reached the restructuring deal after electing not to make a $13.7 million interest payment that came due Feb. 16 on its senior unsecured bonds. It had a 30-day grace period to make the payment and avoid default, but the bankruptcy filing gives the company breathing space. The Denver company reported assets of $100 million to $500 million and debts of $500 million to $1 billion in its chapter 11 petition, filed with the U.S. Bankruptcy Court in Wilmington, Del. Six affiliated companies joined Venoco in filing for bankruptcy, court papers show. Founded in 1992, Venoco primarily explores for oil in locations offshore and onshore in southern California. About 160 full-time employees work for the company. http://www.agm.com http://www.venocoinc.com Write to Jacqueline Palank at jacqueline.palank@wsj.com Write to Jacqueline Palank at jacqueline.palank@wsj.com Credit: By Jacqueline Palank
Subject: Bankruptcy reorganization; Bankruptcy; Litigation; Capital expenditures; Energy industry; Debt restructuring
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 21, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774578367
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774578367?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Brazil's Petrobras Hit by Lower Oil Prices; State-run oil company posts fourth-quarter loss of 36.94 billion reais
Author: Kiernan, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2016: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--Petróleo Brasileiro SA reported its biggest quarterly loss on Monday after lower oil prices and higher borrowing costs forced the Brazilian state-run oil company to write off 49.75 billion reais ($13.79 billion) in assets and investments for last year. Petrobras posted a fourth-quarter loss of 36.94 billion reais, 39% bigger than a year earlier, when its earnings were hit by write-downs related to a vast bid-rigging-and-bribery scheme. Revenue edged up 0.1% from the fourth quarter of 2014 to 85.1 billion reais. The large losses, in back-to-back years, deepen the uncertainty surrounding Petrobras' ability to pay off its significant debt burden, the largest in the global oil industry. Inflated by a stronger dollar, Petrobras' gross debt swelled to 799.25 billion reais at the end of 2015, 10% more than a year earlier, even as the company slashed investment spending and spent the last six months of the year trying--with limited success--to sell off assets. Lower oil prices had been expected to hit Petrobras' balance sheet and force write-downs. Credit Suisse analysts Andre Natal and Regis Cardoso said in a Feb. 23 note that their base-case estimate was that the company would post an annual impairment loss of 7 billion reais in the fourth quarter, based on a recovery in oil prices from $40 a barrel to around $60. Most of the impairment charges came on assets in Petrobras' exploration and production division, reflecting the reduced value of oil and gas fields at current prices. But the company also wrote off 5.28 billion reais on its Comperj refinery, a hulking complex on the outskirts of Rio de Janeiro that Petrobras poured billions of dollars into in recent years before halting work on it. The company is now looking for a partner to help finish the refinery. Petrobras' operating results also deteriorated. Earnings before interest, taxes, depreciation and amortization, a measure of cash flow known as Ebitda, fell 15% to 17.06 billion reais, after adjusting for nonrecurring impacts. Write to Paul Kiernan at paul.kiernan@wsj.com Credit: By Paul Kiernan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 21, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774652286
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774652286?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Permanent Restrictions Put on Oil-Sands Site; Canadian Natural Resources Ltd.'s Primrose East site can use steam only at specified volumes and pressure
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Mar 2016: n/a.
Abstract:
Primrose is one of several production facilities operated by oil-sands producers on the grounds of the Cold Lake Air Weapons Range, the largest air-force fighter base in Canada.
Full text: CALGARY, Alberta--Canadian Natural Resources Ltd. will have to operate indefinitely under restrictions on the pressure and volumes of steam used to extract heavy crude at a troubled oil-sands site in northern Alberta, the province's chief regulator said Monday. The limits imposed by the Alberta Energy Regulator stem from an investigation into a series of unexplained oil leaks at five separate locations at the Canadian Natural site, known as Primrose East. The watchdog said the surface leaks--the first of which was detected in 2009--were caused by excessive amounts of steam injected to leach out crude embedded in sandy deposits under a military base in a remote area about 217 miles northeast of the provincial capital, Edmonton. "The AER concludes that the flow-to-surface events were caused by excessive steam volumes, along with open conduits such as well bores, natural fractures and faults, and hydraulically induced fractures," it said in a statement. The finding represents a setback for Canadian Natural, one of the country's largest oil and gas producers, which initially blamed abandoned wells as the most likely cause. The AER concluded that was a possible contributor to only one of the leaks, and instead highlighted the probability of newer steam-induced vertical fractures. The company said it wouldn't contest the restrictions, which make permanent measures designed to prevent future leaks. "Canadian Natural accepts the AER requirement of low-pressure steaming within one kilometer [0.6 mile] of the flow to surface sites and anticipates continuing to work together with the AER as these areas are evaluated for future operations," spokeswoman Julie Woo said in a statement. In addition to the volume and pressure limits, the AER ordered Canadian Natural to enhance its monitoring system and remediate "any fluid-flow pathways associated with well bores." The company has confined itself to low-pressure steam floods at Primrose East since September 2014 when the AER lifted a ban on all injections imposed in mid-2013. That ban came in the immediate aftermath of the most-recent leaks, which totaled about 6,650 barrels of oil. Before the discovery of the leaks, Canadian Natural used high-pressure injections of steam at the site and boasted it generated returns "amongst the highest in the company's portfolio." The AER said Canadian Natural didn't violate any rules, but could face punishment if it doesn't abide by the restrictions. Canadian Natural's Primrose site uses one of two major types of steam-based extraction techniques to access oil too deep for surface mining. Called cyclic steam stimulation, or CSS, it involves injecting steam into underground oil deposits embedded in rock, typically at high pressure, creating fissures for petroleum to seep out. Primrose is one of several production facilities operated by oil-sands producers on the grounds of the Cold Lake Air Weapons Range, the largest air-force fighter base in Canada. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Petroleum industry; Oil sands
Company / organization: Name: Canadian Natural Resources Ltd; NAICS: 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 21, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774652297
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774652297?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Brazil's Petrobras Hit by Lower Oil Prices; State-run oil company posts fourth-quarter loss of 36.94 billion reais
Author: Kiernan, Paul; Connors, Will
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Mar 2016: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--Brazil's troubled state-run oil company, Petróleo Brasileiro SA, reported its biggest quarterly loss ever Monday after lower oil prices and higher borrowing costs forced it to write off 49.75 billion reais ($13.79 billion) in assets and investments for last year. Petrobras posted a fourth-quarter loss of BRL36.94 billion, or $10.19 billion, 39% bigger than a year earlier, when its earnings were decimated by write-downs related to a vast bid-rigging and bribery scheme . Revenue edged up 0.1% from the fourth quarter of 2014 to BRL85.1 billion. The massive losses, in back-to-back years, deepen the uncertainty surrounding Petrobras' ability to pay off its debt burden, the largest in the global oil industry. Inflated by a stronger dollar, Petrobras's gross debt swelled to BRL799.25 billion at the end of 2015, 10% more than a year earlier, even as the company slashed investment spending and spent the last six months of the year trying--without much success--to sell off assets. Petrobras Chief Executive Aldemir Bendine said Monday that the company's poor results "could cause some apprehension" among investors, but that the company "showed strong resilience" in the face of low oil prices. Mr. Bendine said negotiations for asset sales are continuing at "an intense pace," but he declined to provide details. The company said earlier this year that it aimed to divest $15.1 billion in assets in 2015-16, a number it hasn't yet updated. Low oil prices had been expected to hit Petrobras's balance sheet and force write-downs , but the results surpassed many analysts' predictions. Credit Suisse analysts Andre Natal and Regis Cardoso said in a note Feb. 23 that their base-case estimate was that the company would post an impairment loss of BRL7 billion, based on a recovery in oil prices from $40 a barrel to around $60. Most of the impairment charges came on assets in Petrobras's exploration and production division, reflecting the reduced value of oil and gas fields at current prices. But the company also wrote off BRL5.28 billion on its Comperj refinery, a hulking complex on the outskirts of Rio de Janeiro that Petrobras poured roughly $14 billion into in recent years only to halt work because it ran out of money. The company is now looking for a partner to help finish the refinery. On Monday, the company said that refinery would now be delayed until 2023. "We worked hard" to find a partner for the refinery, Mr. Bendine said, but by the end of 2015 the company hadn't found one. Petrobras's operating results also deteriorated. Earnings before interest, taxes, depreciation and amortization, a measure of cash flow known as Ebitda, fell 15% to BRL17.06 billion, after adjusting for nonrecurring impacts. Petrobras shares were down nearly 5% in after-hours trading in New York. Write to Paul Kiernan at paul.kiernan@wsj.com and Will Connors at william.connors@wsj.com Credit: By Paul Kiernan and Will Connors
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 22, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774 657097
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774657097?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Futures Slip in Asia Trade as Supply Questions Remain; Futures have been hovering around the $40-a-barrel mark in the last week
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Mar 2016: n/a.
Abstract:
While China's economic growth has been slowing, oil consumption has remained strong thanks to the government's aggressive effort to fill up its strategic petroleum reserves and robust demand from local independent refineries known as teapot refiners.
Full text: Oil futures slipped in early Asia trading Tuesday, as uncertainty over global oil supplies remained in focus. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $41.44 a barrel, down eight cents in the Globex electronic session. May Brent crude on London's ICE Futures exchange fell 12 cents to $41.42 a barrel. Futures have been hovering around the $40-a-barrel mark in the last week as traders await further clarity on the status of global supply. The prospect of a production freeze by major exporters helped fuel a run up in prices earlier in the month, but that was halted by indications of resurgent output in the U.S. Analysts say oil prices stand to fall sharply if global exporters fail to reach an agreement to freeze output. On the demand front, Chinese trade data showed the world's second-largest oil consumer imported about 8 million barrels a day of oil last month, the highest daily average on record and an increase of 24% from a year earlier. While China's economic growth has been slowing, oil consumption has remained strong thanks to the government's aggressive effort to fill up its strategic petroleum reserves and robust demand from local independent refineries known as teapot refiners. "Despite the fact that U.S. production has dropped significantly since January, the declines are not sufficiently large to prevent the global surplus from growing," wrote Bart Melek, head of global commodity strategy at TD Securities. "Iran is sure to be very resistant to keeping its production levels at the current sanction-induced lows," Mr. Melek added. A meeting of members and nonmembers of the Organization of the Petroleum Exporting Countries to discuss freezing output at January levels is scheduled for April 17 in Qatar. Big cuts to bearish bets by speculators have helped stabilize the oil market in recent weeks, analysts said. Net bullish bets on oil prices are now at their highest level since June, according to U.S. regulatory data. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--rose six points to $1.4595 a gallon, while April diesel traded at $1.2370, four points lower. ICE gas oil for April changed hands at $369.25 a metric ton, down $1 from Monday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Petroleum industry; Futures; Crude oil prices
Location: United States--US Asia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774682287
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774682287?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Edge Lower Amid Uncertainty on Global Supply; Russia says it will attend a producers' meeting next month
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Mar 2016: n/a.
Abstract:
Prices recovered from early losses Tuesday after reports said Russia confirmed it would attend a meeting among members of the Organization of the Petroleum Exporting Countries and non-OPEC members planned for April 17.
Full text: Oil futures wavered Tuesday amid uncertainty about global oil supplies ahead of a meeting among major producers next month to discuss freezing production. Light, sweet crude for May delivery settled down 7 cents, or 0.2%, at $41.45 a barrel on the New York Mercantile Exchange. The May contract is the new front-month contract as of Tuesday, and Tuesday's settlement price is the highest front-month closing price since Dec. 1. Brent, the global benchmark, rose 25 cents, or 0.6%, to $41.79 a barrel on ICE Futures Europe, the highest settlement since Dec. 4. Prices have surged in recent weeks due to supply outages in Nigeria and Iraq, talk among major oil-producing nations about an agreement to freeze output and expectations of continued declines in U.S. production. However, some analysts have warned that the rally could halt at around $40 a barrel, because that is a level at which some U.S. producers could bring new wells online. Drilling data released Friday showed that the number of rigs drilling for oil in the U.S. rose by one last week , reinforcing this viewpoint. Prices recovered from early losses Tuesday after reports said Russia confirmed it would attend a meeting among members of the Organization of the Petroleum Exporting Countries and non-OPEC members planned for April 17. The news supported the notion that some major state producers, including Russia as well as Saudi Arabia and others, intend to move forward with an output freeze even if Iran and Libya decline to participate until they restore their production levels. Abdalla Salem el-Badri, secretary-general of the Organization of the Petroleum Exporting Countries, said Monday that about 15 producing nations will attend a meeting on April 17 to discuss freezing production, but some OPEC members may not attend. While the prospects of such an output-freeze deal have boosted prices in recent weeks, some analysts caution that the market might be disappointed. U.S. crude is up more than 20% so far this month. "The expectations ahead of the Doha meeting in April are hopelessly excessive," said analysts at Commerzbank. London consulting firm Energy Aspects said in a research note that the oil-price gains in recent weeks have been led by a change in sentiment, rather than a shift in the supply-demand balance. "The market has gotten a bit too carried away," the firm said. Gasoline futures settled up 3.82 cents, or 2.6%, at $1.4971 a gallon, the highest settlement since Aug. 31. Diesel futures rose 1.47 cents, or 1.2%, to $1.2521 a gallon. The American Petroleum Institute, an industry group, said in a report late Tuesday that U.S. crude supplies jumped by 8.8 million barrels in the latest week, according to market participants. The report also showed a 4.3-million-barrel decrease in gasoline stocks and a 391,000-barrel decline in distillate inventories, according to the market participants. Georgi Kantchev and Christian Berthelsen contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry
Location: Russia United States--US Iraq Nigeria
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774739918
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774739918?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Finance: Oil-Loan Review Urged in Canada
Author: Trichur, Rita
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Mar 2016: C.3.
Abstract:
Some analysts are skeptical about the lenders' reserving practices in part because U.S. banks, including J.P. Morgan Chase & Co. and Wells Fargo & Co., have set aside millions more for their reserves as they brace for bigger energy-related losses.
Full text: TORONTO -- Canada's banking regulator is urging the country's major banks to review their accounting practices to ensure they have sufficient reserves as the commodity-price collapse takes a toll on the economy. The Office of the Superintendent of Financial Institutions wants the lenders to examine their collective allowances, reserve funds that act as cushions to absorb potential future loan losses, the regulator's chief said in an interview. "We want them to take a good look at their accounting practices," saidSuperintendent of Financial Institutions Jeremy Rudin. "They should support loss-absorbing capacity and the ability to manage through difficult times in general," he added. The regulator is giving the country's six biggest banks this guidance on their accounting as they face mounting criticism from some analysts that they haven't amassed enough reserves to cover soured loans to the energy sector. That criticism was a recurring theme during calls following their fiscal first-quarter results, in which many banks warned of rising provisions for credit losses but assured investors their rainy-day cushions were adequate. Canadian bank shares have tumbled over the past year as the price of oil has collapsed, but the S&P/TSX Composite Bank Index is now up about 16.77% from its low in February, reflecting a rebound in oil. Still, oil prices remain an overhang for banks, underscoring the size of the energy industry in the Canadian economy and concerns that lenders eventually will be stung by higher loan losses. Energy loans totaled 49.7 billion Canadian dollars ($38.2 billion) for the country's six biggest banks during the November-January quarter, according to a report by TD Securities Inc. Bank of Nova Scotia, Canada's third-largest bank by assets, has the biggest direct oil and gas exposure at 3.6% of total loans. Some analysts are skeptical about the lenders' reserving practices in part because U.S. banks, including J.P. Morgan Chase & Co. and Wells Fargo & Co., have set aside millions more for their reserves as they brace for bigger energy-related losses. Mr. Rudin declined to say whether Canadian banks are underreserved compared with their U.S. peers. Nor did he offer an opinion on whether analysts voicing such criticisms were misinformed. Most banks declined to comment, including on how they have responded to the regulator's guidance. "We have no comment on this specifically, but are confident in our current provisioning practices," Ali Duncan Martin, a spokeswoman for Toronto-Dominion Bank, Canada's No. 2 lender by assets, said in an email. A spokeswoman for an industry group representing the lenders, the Canadian Bankers Association, said that Canadian banks aren't underreserved. Bank executives have stressed that accounting differences between Canadian and U.S. banks affect how lenders build reserves in each country. Canadian banks use an "incurred-loss model" which means they generally take provisions once a loan loss is identified. U.S. banks have moved toward an "expected loss" model that involves taking more proactive provisions. Canadian banks plan to move toward an expected-loss model over the coming years to conform with global norms. Diminishing the gap between the two accounting systems "seems like a sensible thing to do," Mr. Rudin said. Canadian banks tend to disclose their energy exposures as a percentage of total loans, but it is difficult to make a direct comparison with U.S. lenders. Canada's banks also have been faulted by analysts for providing varying degrees of detail about their energy lending books and their "stress testing" of loan portfolios.
Credit: By Rita Trichur
Subject: Financial institutions; Bank reserves; Banking industry; Accounting procedures
Location: Canada
Company / organization: Name: Office of the Superintendent of Financial Institutions-Canada; NAICS: 926130
Classification: 8110: Commercial banking services; 9172: Canada
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: Mar 22, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774741288
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774741288?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Vitol Group Says 2015 Revenue Fell as Oil Prices Tumbled; Current market conditions described as 'challenging' by oil trader's chief executive
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Mar 2016: n/a.
Abstract:
Related News * Heard on the Street: How Iran Could Quickly Send Oil Prices Even Lower (Jan. 19, 2016) * Banks Slash Oil-Price Forecasts Again (Jan. 12, 2016) * Banks Rip Up Oil Forecasts (Jan. 28, 2016) "Current market conditions are challenging," Vitol Chief Executive Ian Taylor said in comments the company published.
Full text: LONDON--Oil trader Vitol Group said Tuesday that its oil- and fuel-trading volumes grew in 2015 from a year earlier, but revenue fell 38% due to plummeting crude prices. Privately-held Vitol didn't include any profit details in the figures published Tuesday. It said it achieved a "solid performance across all major business lines." Traders such as Vitol make money by moving vast quantities of oil, gas, coal and other commodities around the world, taking advantage of price discrepancies at different times and in different regions. When prices fall, trading revenues tend to suffer. But for trading houses, lower revenue doesn't automatically mean lower profits, since a volatile market can create trading opportunities that boost profit margins. Related News * Heard on the Street: How Iran Could Quickly Send Oil Prices Even Lower (Jan. 19, 2016) * Banks Slash Oil-Price Forecasts Again (Jan. 12, 2016) * Banks Rip Up Oil Forecasts (Jan. 28, 2016) "Current market conditions are challenging," Vitol Chief Executive Ian Taylor said in comments the company published. He said that "absolute price levels and market volatility are causes for caution," although he added that the current structure of the market can favor traders Vitol is the world's largest independent oil merchant, trading more than six million barrels of oil a day, or roughly 6% of daily oil consumption. It has expanded in recent years through a series of acquisitions, including refineries in Australia and Europe. Oil prices fell more than 30% in 2015 due to oversupply that is responsible for a near-two-year slump. Vitol's traded volumes in its core oil business rose 13% in 2015 to 303 million tons. Sales of gas, coal and power declined. The company said its refining business performed well last year, as weak crude prices helped boost profits across the sector. Mr. Taylor warned of a "challenging" year ahead for the oil sector and said the company is increasingly vigilant about credit risks presented by its trading partners, suppliers and customers. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Petroleum industry; Corporate profits; Prices; Profit margins
Location: Iran
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774766833
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774766833?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Eni Plans More Than $14B in Cost Cuts, Asset Sales; Eni SpA announced plans for 13 billion euros ($14.71 billion) in cost cuts and asset sales, as the Italian oil and gas company continues to adjust its strategy to the enduring low crude oil prices.
Author: Sylvers, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Mar 2016: n/a.
Abstract: None available.
Full text: Eni SpA announced plans for 13 billion euros ($14.71 billion) in cost cuts and asset sales, as the Italian oil and gas company continues to adjust its strategy to the enduring low crude oil prices. Eni said it would sell EUR7 billion in assets by 2019, with a portion of that coming from stakes in recently discovered oil and gas fields. The company also plans EUR6 billion in cost cuts, including EUR3.5 billion derived from renegotiating existing contracts. The company said it would pay a dividend of 80 euro cents on its 2016 earnings, the same level as last year. http://www.eni.com Write to Eric Sylvers at eric.sylvers@wsj.com Credit: By Eric Sylvers
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 22, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774834522
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774834522?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Trivest Gets Green Light to Sell Stake in Take 5 to Roark Capital; Trivest Partners has been given regulatory approval to sell its stake in fast lube chain Take 5 Oil Change Inc. to Roark Capital Group, according to a filing with the Federal Trade Commission.
Author: Cumming, Chris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Mar 2016: n/a.
Abstract:
Trivest Partners has been given regulatory approval to sell its stake in fast lube chain Take 5 Oil Change Inc. to Roark Capital Group, according to a filing with the Federal Trade Commission.
Full text: Trivest Partners has been given regulatory approval to sell its stake in fast lube chain Take 5 Oil Change Inc. to Roark Capital Group, according to a filing with the Federal Trade Commission. Neither firm responded to calls for further details, and the sale hasn't yet been announced. However, the Federal Trade Commission has approved it under the premerger notification program, by which it reviews transactions before they are consummated to determine if they run afoul of antitrust laws. Trivest bought Take 5 in 2011 out of its $325 million Trivest Fund IV LP. Take 5 offers oil change service, air filter replacement, automatic transmission service, and wiper blades inspection and replacement. The company is based in Metairie, La., and has 34 locations in south Louisiana, the Mississippi Gulf Coast, North and South Carolina, and coastal Alabama, according to its website. Last July, it made its first add-on acquisition, acquiring Johns Creek Emission LLC, a chain of lube and emission-inspection businesses in Atlanta. Founded in 1981, Trivest focuses on family-owned companies in the U.S. and Canada in the niche manufacturing, business services, distribution and consumer sectors. The Coral Gables, Fla.-based firm makes investments of $20 million to $250 million and closed its fifth fund, Trivest Fund V LP, at $415 million in 2012. In February, Trivest invested in IDMWorks Inc., an identity and access management services provider. That same month, the firm sold seafood products distributor North Star Seafood LLC to Sysco Corp. Roark would be acquiring Take 5 from its third fund, Roark Capital Partners III LP, which closed at $1.5 billion in 2012. The Atlanta-based firm generally makes investments of $15 million to more than $1 billion in franchises, consumer products, business services and environmental services companies with revenue between $20 million and more than $5 billion and earnings before interest, taxes, depreciation and amortization of $10 million to more than $500 million, the firm's website said. In February, Roark bought a stake in fitness franchise Ultimate Fitness Group LLC. http://www.take5oilchange.com http://www.roarkcapital.com http://www.trivest.com Write to Chris Cumming at chris.cumming@wsj.com. Credit: By Chris Cumming
Subject: Acquisitions & mergers; Seafoods; Regulatory approval
Location: Louisiana
Company / organization: Name: Federal Trade Commission--FTC; NAICS: 926150; Name: Roark Capital Group; NAICS: 523999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 22, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774847677
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774847677?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Traders Book Profits Amid Low Prices; One bright spot in energy: Trading businesses enjoyed record earnings in 2015
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Mar 2016: n/a.
Abstract:
The volatile market created new and profitable trading opportunities for Gunvor and other merchants, including Trafigura Group PTE, which said 2015 was its strongest trading year on record , as well as the trading arms of big oil companies like Royal Dutch Shell PLC. Earlier Coverage * After Years Outperforming Oil Companies, BG Ends Trading (Feb. 12, 2016) * Commodities Trader Trafigura Benefits From Volatility (Dec. 14, 2015) * Commodity Traders Feel Unusual Pain of a Market Rout (Aug. 25, 2015) Trading houses are famously secretive, and the big oil companies give little detail on their trading operations.
Full text: LONDON--There is one chunk of the energy industry that stands to benefit from today's low oil prices: The traders who make money moving oil, gasoline and other petroleum products around the globe. Switzerland-based Gunvor Group Ltd on Tuesday reported record profits for 2015, even though the privately held company's revenue fell on low prices. The volatile market created new and profitable trading opportunities for Gunvor and other merchants, including Trafigura Group PTE, which said 2015 was its strongest trading year on record , as well as the trading arms of big oil companies like Royal Dutch Shell PLC. Earlier Coverage * After Years Outperforming Oil Companies, BG Ends Trading (Feb. 12, 2016) * Commodities Trader Trafigura Benefits From Volatility (Dec. 14, 2015) * Commodity Traders Feel Unusual Pain of a Market Rout (Aug. 25, 2015) Trading houses are famously secretive, and the big oil companies give little detail on their trading operations. Gunvor's privately held rival Vitol Group--the world's biggest independent oil trader--reported a decrease in its annual revenue Tuesday in line with the slide in oil prices, but didn't say how it affected profits. Vitol did say it experienced "solid performance across all major business lines" and the volume of oil and fuel it traded rose 13%. A big drop in oil prices lasting nearly two years has thrown the oil sector into turmoil, hammering profits at companies that get most of their income from producing and selling oil and natural gas. But traders like Gunvor and Vitol are much more susceptible to variations in market volatility than to the price itself. That is, they can benefit from big price changes regardless of whether that price is going up or down. Oil traders make money by taking advantage of price discrepancies at different times and in different regions. Though a drop in prices has dented revenue for traders, market fluctuations can create the opportunity to make high-profit trades. For instance, last year the spot price for oil fell below the cost of crude for later delivery. That allowed large traders with access to storage to make money by stockpiling barrels and selling them in the futures market. Gunvor's net profit leapt to $1.3 billion last year from $267 million in 2014, boosted by a 10% increase in gross profit at its trading and refining businesses and proceeds from a string of asset sales. Earnings before interest, taxes, depreciation and amortization rose 14% from 2014 to $860 million. "I think we can say that in 2015 the group did well," said Chief Financial Officer Jacques Erni. "Underlying trading profitability increased and refining did very well and we're very happy with that." In a statement emailed to journalists, Vitol CEO Ian Taylor noted that current market conditions "favor" traders, though overall he said that the situation for the sector is challenging. In December, Trafigura said its oil division saw a 50% increase in gross earnings in 2015, helping to boost net profit nearly 7% to $1.1 billion. Chief financial officer Christophe Salmon said at the time that the company's core trading business is "completely immune against price risk." Trading has also helped Shell and BP PLC cushion the impact of weakening prices on the companies' core exploration-and-production business. BP's chief financial officer said in February that 2015 was "a good year for supply and trading." In its annual report published this month, Shell said that its trading business contributed to a sharp increase in profits in its refining and marketing arm. Glencore PLC said earlier this month that earnings before interest, taxes, depreciation and amortization in its energy market division rose nearly 50% in 2015 to $826 million. But there are still downsides to traders from an overall slump in commodity prices, since many invested in physical assets like mines and terminals in recent years. Despite its trading arm's success, Glencore reported a large annual loss due largely to its mine holdings. Though Glencore started life as a privately held trading firm, it is now one of the world's largest diversified miners after listing publicly in 2011 and then swallowing up coal giant Xstrata two years later. Gunvor said its profits last year were dented by impairments it took on coal interests the company holds in the U.S. and South Africa, and Trafigura's impairment charges on its nonfinancial assets amounted to $407 million last year. The market rout has also spooked investors, forcing Glencore to embark on a program to reduce debt and sell off assets to reassure its shareholders last year. The company declined to comment. Singapore-listed Noble Group has also faced investor concerns, compounded by allegations of accounting irregularities by anonymous research firm Iceberg Research. Noble declined to comment Tuesday. The company has defended its accounting practices , and an independent review by PricewaterhouseCoopers found the company had complied with accounting rules and industry standards. The trading companies themselves are increasingly warning of credit risks presented by their trading partners, suppliers and customers. "Whilst opportunities in the physical market continue to exist, we are increasingly vigilant in respect of counterparty risk as current price levels will inevitably test some market participants" Vitol's Mr. Taylor said. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Petroleum industry; Profits; Prices; Profitability; Energy industry
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774868105
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774868105?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude-Oil Stockpiles Seen Up in Week; Analysts expect 2.9 million-barrel rise in oil inventories
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Mar 2016: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed an 8.8-million-barrel increase in crude supplies, a 4.3-million-barrel decrease in gasoline stocks and a 391,000-barrel decline in distillate inventories, according to market participants.
Full text: NEW YORK--U.S. crude-oil stocks are expected to show an increase in data due Wednesday from the Department of Energy, according to a survey of analysts by The Wall Street Journal. Estimates from 12 analysts surveyed showed that U.S. oil inventories are projected to have risen by 2.9 million barrels, on average, in the week ended March 18. All 12 analysts expect stockpiles to rise. Forecasts range from a gain of 1.25 million barrels to 4.7 million barrels. The closely watched survey from the Energy Information Administration is due at 10:30 a.m. EDT Wednesday. Gasoline stockpiles are expected to fall by 2 million barrels, according to analysts. Eleven analysts expect a drop, with one expecting no change. Estimates range from a decline of 3 million barrels to no change. Stocks of distillates, which include heating oil and diesel, are expected to fall by 800,000 barrels. Nine analysts expect a decline, while three see a rise. Forecasts range from a drop of 3 million barrels to a rise of 600,000 barrels. Refinery use is seen falling 0.1 percentage point to 88.9% of capacity, based on EIA data. Five analysts expect a decline, while four expect a rise, one expects no change and two didn't provide an estimate. Forecasts range from a fall of 1.2 points to an increase of 0.5 point. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed an 8.8-million-barrel increase in crude supplies, a 4.3-million-barrel decrease in gasoline stocks and a 391,000-barrel decline in distillate inventories, according to market participants. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Inventory
Location: United States--US
Company / organization: Name: Department of Energy; NAICS: 926130; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774902351
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774902351?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Venezuelan Oil Contractor Pleads Guilty to Bribery; Prosecutors say Abraham Jose Shiera Bastidas used bribes to obtain PDVSA contracts
Author: Ailworth, Erin; Kurmanaev, Anatoly
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Mar 2016: n/a.
Abstract: None available.
Full text: HOUSTON--A Venezuelan oil contractor pleaded guilty to bribery in a U.S. court, the latest development in a wide-ranging Justice Department probe of state-run Petróleos de Venezuela. Abraham Jose Shiera Bastidas admitted bribing foreign officials and committing wire fraud on Tuesday before a U.S. District Court judge in Houston. Mr. Shiera Bastidas, 52 years old, is the owner of Emea Venezuela and Vertix Instrumentos, two oil-equipment providers based in Maracaibo, Venezuela. Mr. Shiera Bastidas is scheduled to be sentenced July 8. His lawyer declined to comment. The plea comes as U.S. prosecutors intensify investigation of drug trafficking, money laundering and other crimes by members of the Venezuelan government, armed forces and public-sector executives. Prosecutors said Mr. Shiera Bastidas used bribes - including money, recreational travel, meals and entertainment - to obtain PDVSA contracts between 2009 and 2014. A PDVSA spokeswoman declined to comment. Mr. Shiera Bastidas admitted to wiring $25,000 to a U.S. bank account of an unnamed PDVSA official. That account was based in Texas, which is part of the reason Mr. Shiera Bastidas, a resident of Coral Gables, Fla., faced trial in Houston. Prosecutors plan to dismiss the remaining accusations against Mr. Shiera Bastidas, who faces a maximum five-year prison sentence on each count. U.S. District Judge Gray Miller said the sentence could be reduced if the businessman substantially assists the wider PDVSA probe. Prosecutors said Mr. Shiera Bastidas worked with businessman Roberto Rincón, who has also been detained in connection with the bribery case . Mr. Rincón's lawyer Gary Siller didn't return request for comment. A spokesman for the Justice Department declined to provide additional details. Mr. Rincón had supplied PDVSA with as much as $500 million a year worth of oil equipment in the past 10 years, becoming one of the state oil firm's most important contractors, according to former senior executives of the oil firm. His trial is scheduled to begin April 25. U.S. prosecutors across multiple jurisdictions have been investigating PDVSA and its former officials, including former President Rafael Ramírez, and contractors. The officials and contractors are accused of receiving kickbacks, over-invoicing and scamming currency controls and then moving the profits through U.S. banks. U.S. investigators, who are also investigating whether PDVSA was used to launder drug money, are interested in Mr. Rincón's relationship with a retired general and pro-government lawmaker, Hugo Carvajal, who once directed Venezuelan military intelligence. Mr. Carvajal has been indicted in New York and Miami for his alleged involvement in drug trafficking. In a brief interview in January following Mr. Rincón's arrest, Mr. Carvajal said the businessman "remains my good friend." He added that Mr. Rincón faces "grave bribery charges¨ in the U.S., without elaborating. Mr. Carvajal didn't respond to request for comment Tuesday. Write to Erin Ailworth at Erin.Ailworth@wsj.com and Anatoly Kurmanaev at Anatoly.kurmanaev@wsj.com Credit: By Erin Ailworth and Anatoly Kurmanaev
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 22, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1774983084
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1774983084?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Futures Slide in Asia Trade Ahead of Inventory Data; May Brent crude on London's ICE Futures exchange fell 40 cents to $41.39 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Mar 2016: n/a.
Abstract:
In refined product markets, Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--rose 89 points to $1.5060 a gallon, while April diesel traded at $1.2417, 104 points lower.
Full text: Oil futures eased in early Asia trading Wednesday, as traders looked ahead to U.S. data on oil stockpiles and an upcoming meeting of major oil suppliers. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $41.02 a barrel, down 43 cents in the Globex electronic session. May Brent crude on London's ICE Futures exchange fell 40 cents to $41.39 a barrel, pulling back from its highest settlement level since Dec. 4, reached on Tuesday. Crude prices have wavered around the $40-a-barrel mark in recent sessions, as traders await further clarity on the outlook for global oil production. Early data from the American Petroleum Institute, an industry group, showed U.S. oil inventories rose 8.8 million barrels last week. The big increase suggests U.S. output remains resilient, while official data on stockpiles from the U.S. Department of Energy is due Wednesday eastern time. "U.S. crude production should receive cuts in order for the global oversupply to ease," wrote Daniel Ang, investment analyst at Phillip Futures, in a note to clients. "We believe further drops to [production] would be one of the signals for higher oil prices." Next month, several major oil producers, including those outside the Organization of the Petroleum Exporting Countries, are set to meet to discuss a freeze in supply at January levels. OPEC's secretary-general said Monday that about 15 producing nations will attend a meeting on April 17 to discuss freezing production, though some OPEC members may not attend. Still, some analysts say a freeze won't be enough to boost prices meaningfully. Mr. Ang said a freeze "isn't going to cut it," adding that he expects prices through the first half of 2016 to average around $35 a barrel. In refined product markets, Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--rose 89 points to $1.5060 a gallon, while April diesel traded at $1.2417, 104 points lower. ICE gas oil for April changed hands at $370.50 a metric ton, down $3.50 from Tuesday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Petroleum industry; Crude oil prices; Petroleum production
Location: United States--US Asia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 23, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775044687
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775044687?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Emerald Oil Files for Chapter 11 Bankruptcy Protection; Denver company has interests in about 100 oil and gas sites
Author: Fitzgerald, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Mar 2016: n/a.
Abstract:
The company said last month it had hired law firm Kirkland & Ellis along with financial adviser Opportune LLP and investment banker Intrepid Partners, LLC, to advise its management and the board of directors concerning debt-restructuring talks with its lenders and bondholders.
Full text: Oil and gas exploration company Emerald Oil Inc. filed for bankruptcy protection Tuesday night, the latest victim of stubbornly low oil prices. The Denver-based company, along with four affiliates, filed for chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., listing assets of $405.4 million and debts of $361.1 million. Oil prices have rebounded from a February low of under $30 a barrel, but that hasn't been enough to save many oil and natural gas drillers. More than 50 oil and gas companies have sought bankruptcy protection since the beginning of 2015, according to law firm Haynes & Boone. That number is expected to rise this year. Emerald's business operations are located primarily in North Dakota. The company operates or has interests in about 100 oiI and gas production sites. White Deer Energy owns 100% of the company's preferred shares. The company said last month it had hired law firm Kirkland & Ellis along with financial adviser Opportune LLP and investment banker Intrepid Partners, LLC, to advise its management and the board of directors concerning debt-restructuring talks with its lenders and bondholders. Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com Credit: By Patrick Fitzgerald
Subject: Bankruptcy; Bankruptcy reorganization
Location: North Dakota
Company / organization: Name: Emerald Oil Inc; NAICS: 211111; Name: Bankruptcy Court-US; NAICS: 922110; Name: White Deer Energy LP; NAICS: 523910; Name: Kirkland & Ellis; NAICS: 541110; Name: Haynes & Boone; NAICS: 541110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 23, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775044725
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775044725?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Finance: Oil Price Crashed? Traders Don't Care --- Businesses that move oil and gasoline are benefiting from the volatility in crude
Author: Kent, Sarah
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Mar 2016: C.3.
Abstract:
The volatile market created new and profitable trading opportunities for Gunvor and other merchants, including Trafigura Group PTE, which said 2015 was its strongest trading year on record, as well as the trading arms of big oil companies such as Royal Dutch Shell PLC. Trading houses are famously secretive, and the big oil companies give little detail on their trading operations.
Full text: LONDON -- There is one chunk of the energy industry that stands to benefit from today's low oil prices: The traders who make money moving oil, gasoline and other petroleum products around the globe. Switzerland-based Gunvor Group Ltd. reported record profit for 2015 on Tuesday, even though the privately held company's revenue fell because of low oil prices. The volatile market created new and profitable trading opportunities for Gunvor and other merchants, including Trafigura Group PTE, which said 2015 was its strongest trading year on record, as well as the trading arms of big oil companies such as Royal Dutch Shell PLC. Trading houses are famously secretive, and the big oil companies give little detail on their trading operations. Gunvor's privately held rival Vitol Group -- the world's biggest independent oil trader -- reported a drop in its annual revenue on Tuesday in line with the slide in oil prices, but didn't say how it affected profit. Vitol did say it experienced "solid performance across all major business lines" and the volume of oil and fuel it traded rose 13%. A big drop in oil prices lasting nearly two years has thrown the oil sector into turmoil, hammering profits at companies that get most of their income from producing and selling oil and natural gas. But traders such as Gunvor and Vitol are much more susceptible to variations in market volatility than to the price itself. That is, they can benefit from big price changes regardless of whether that price is going up or down. Oil traders make money by taking advantage of price discrepancies at different times and in different regions. Though a drop in prices has dented revenue for traders, market fluctuations can create the opportunity to make high-profit trades. For instance, last year the spot price for oil fell below the cost of crude for later delivery. That allowed large traders with access to storage to make money by stockpiling barrels and selling them in the futures market. Gunvor's net profit climbed to $1.3 billion last year from $267 million in 2014, boosted by a 10% increase in gross profit at its trading and refining businesses and proceeds from a string of asset sales. Earnings before interest, taxes, depreciation and amortization rose 14% from 2014 to $860 million. "I think we can say that in 2015 the group did well," Chief Financial Officer Jacques Erni said. "Underlying trading profitability increased and refining did very well and we're very happy with that." In a statement emailed to journalists, Vitol CEO Ian Taylor noted that current market conditions favor traders, although he said that overall the situation for the sector is challenging. In December, Trafigura said its oil division recorded a 50% increase in gross earnings in 2015, helping to boost net profit nearly 7% to $1.1 billion. Chief Financial Officer Christophe Salmon said at the time that its core trading business is "completely immune against price risk." Trading also has helped Shell and BP PLC cushion the impact of weakening prices on the companies' core exploration-and-production business. BP's chief financial officer said in February that 2015 was "a good year for supply and trading. "In its annual report published this month, Shell said that its trading business contributed to a sharp increase in profit in its refining-and-marketing arm. Glencore PLC said this month that earnings before interest, taxes, depreciation and amortization in its energy market division rose nearly 50% in 2015 to $826 million. But there still are downsides to traders from an overall slump in commodity prices, because many invested inphysical assets such as mines in recent years.Despite its trading arm's success, Glencore reported a large annual loss, largely attributable to its mine holdings. Gunvor said its profit last year was dented by impairments it took on coal interests the company holds in the U.S. and South Africa. Trafigura's impairment charges on its nonfinancial assets amounted to $407 million last year. Credit: By Sarah Kent
Subject: Energy industry; Gasoline; Petroleum industry; Commodities trading; Crude oil
Location: United States--US
Company / organization: Name: Guvnor Group Ltd; NAICS: 523130
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: Mar 23, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775086521
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775086521?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distri bution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
PetroChina Net Profit Plunged Nearly 70% in 2015; China's largest oil company by output warns of further troubles this year
Author: Spegele, Brian; Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Mar 2016: n/a.
Abstract:
The cuts are more modest than the minimum 10% cut announced by Chinese oil rival Cnooc Ltd. The belt-tightening comes as PetroChina reported falling earnings, with net profit dropping 67% on year in 2015 to 35.5 billion yuan, as sustained low oil prices and asset impairments worth the equivalent of several billion dollars took their tolls.
Full text: BEIJING--Chinese state-owned oil giant PetroChina Co. on Wednesday said it was bracing for a turbulent 2016 after reporting plummeting profit, and said the company will slash production and investment this year. China's largest oil-and-gas company by production said it would trim capital expenditures by 5% to 192 billion yuan this year ($30 billion). The cuts are more modest than the minimum 10% cut announced by Chinese oil rival Cnooc Ltd. The belt-tightening comes as PetroChina reported falling earnings, with net profit dropping 67% on year in 2015 to 35.5 billion yuan, as sustained low oil prices and asset impairments worth the equivalent of several billion dollars took their tolls. The earnings were in line with earlier guidance that annual profit would fall 60%-70%. Sales fell 24% to 1.73 trillion yuan, PetroChina said, adding it was expecting little reprieve this year, and was focused on cost-cutting as a result. Surging production growth and rising investment by PetroChina once symbolized China's economic rise, and the government's vision of state-led capitalism. Today, as President Xi Jinping demands greater efficiency in China's sagging economy, the company is under more pressure than ever to turn a profit. "PetroChina is at a critical point in paring costs and ushering in the future," said company chairman Wang Yilin at a media briefing in Hong Kong. He provided few details on plans. He added that the deep slide in oil prices to below $30 barrel this year was "irrational" and said international prices would average in the range of $40-$50 this year, before possibly returning to $80 by 2020. The company is cutting production nonetheless. It said Wednesday that crude oil output will fall around 5% this year to 924.7 million barrels. Total oil and gas production for 2015 rose 3% over 2014 to 1.5 billion barrels of oil equivalent. While the company has been under pressure from leaders in Beijing not to undertake the sort of widespread job cuts seen elsewhere in the industry, executives said they have been trimming employee compensation costs. For example, Vice Chairman Wang Dongjin told reporters unprofitable subsidiaries would likely see employees either moved to other parts of the company or pushed into early retirement. PetroChina said employee compensation costs fell 2.3% in 2015, as it limited numbers of new hires. The company's aggressive overseas expansion in recent years is today one of its big challenges, as international oil prices hover around $40, compared with more than $110 a barrel in June 2014. When prices were high, the company scooped up expensive assets from Australia to Canada. Today many of those assets are worth far less as the outlook for prices remains tepid. PetroChina said its international operations delivered a loss of 8.3 billion yuan before taxes last year, which it blamed largely on one-time asset impairment charges. In all, PetroChina reported asset impairment losses of about 25 billion yuan last year, more than five times 2014. Analysts are similarly expecting large impairment charges at other Chinese oil giants, in particular at Cnooc, which is due to release earnings Thursday. Write to Brian Spegele at brian.spegele@wsj.com and Dan Strumpf at daniel.strumpf@wsj.com Credit: By Brian Spegele and Dan Strumpf
Subject: Petroleum industry; Corporate profits; Costs
Location: China
People: Xi Jinping
Company / organization: Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 23, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775104308
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775104308?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Takes Biggest Losses in a Month as Stockpiles Keep Growing; Market losses being limited by continued talk about a production freeze
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Mar 2016: n/a.
Abstract:
[...]gasoline stockpiles fell by 4.6 million barrels, double analysts' expectations and larger than the three-million-barrel declines that are common during this time of year as driving season typically starts, according to investment bank Tudor, Pickering, Holt & Co. Gasoline helped support the market, settling down just 2.9% at $1.4541 a gallon. [...]the fact that Cushing grew took a little bit of the pressure off. .. Because it's a big number doesn't mean it's a trend.
Full text: Oil prices took some of their biggest losses of the last month on Wednesday as data showed U.S. stockpiles keep rising and production is holding strong, which thwarted recent bets that those trends may be winding down. Light, sweet crude for May delivery settled down $1.66, or 4%, at $39.79 a barrel on the New York Mercantile Exchange, the worst percentage loss since Feb. 23. Brent, the global benchmark, lost $1.32, or 3.2%, to $40.47 a barrel on ICE Futures Europe. Total commercial stocks of oil and refined fuels rose by 9.9 million barrels to 1.354 billion barrels as of Friday, the U.S. Energy Information Administration said. It is a record high, buoyed almost solely by crude, which added 9.4 million barrels for the week. That addition was more than three times the size of analysts' expectations, and also outpaced industry estimates and a strong draw from gasoline stockpiles. More * Heard: Big Oil's Next Big Energy Problem * Crude Price Crashed? Traders Don't Care * Commodity Volatility to Continue: Citi The size of total combined stockpiles has taken on growing importance in recent weeks as traders around the world await the moment when high stockpiles start to decline. Both crude and refined fuel stockpiles have hit historic highs and they need to start falling before prices can rise substantially, according to several analysts. Total oil storage levels have now grown 10 out of the last 13 weeks, and the latest record dates back to 1990. Crude stocks alone hit 532 million barrels, a record of its own. In monthly data, which don't line up exactly with the weekly data, inventories last exceeded 500 million barrels in 1930. "Production is still the same," said John Macaluso, vice president at Tyche Capital Advisors LLC, which manages about $6 million in assets. "Nothing's really changed. The supply issue is going to continue to get worse." Oil futures have spent more than a month going steadily upward, with total gains of more than 50%, their biggest rally in years. Much of that came from tightening markets in Europe, and talk of a coordinated output freeze from Russia, Saudi Arabia and some of the world's other large exporters. But many traders have also been anticipating output cuts from U.S. producers, which have been slow to come despite prices being down about 35% from last year's highs. U.S. production fell last week by only 30,000 barrels, according to EIA data. That was more than canceled out by imports--a factor that often confounds forecasters--which increased by 691,000 barrels. Analysts had expected only a 2.9-million-barrel addition in crude, and the heavy imports probably helped that forecast to turn out so far off, a broker and analysts said. The losses could have been worse, traders and brokers said. Many had anticipated a large stockpile increase because the American Petroleum Institute, an industry group, reported late Tuesday that oil stockpiles would have a big increase, 8.8 million barrels. EIA data also showed that stocks at Cushing, Okla., the delivery point for the West Texas Intermediate contract, fell by 1.3 million barrels. And gasoline stockpiles fell by 4.6 million barrels, double analysts' expectations and larger than the three-million-barrel declines that are common during this time of year as driving season typically starts, according to investment bank Tudor, Pickering, Holt & Co. Gasoline helped support the market, settling down just 2.9% at $1.4541 a gallon. Stocks of distillates, which include heating oil and diesel, added 917,000 barrels and diesel futures fell 3.8% to $1.2040 a gallon. "Gasoline should really lead the market this time of year," said Todd Gross, chief investment officer at QERI LLC. "And the fact that Cushing grew took a little bit of the pressure off. ... Because it's a big number doesn't mean it's a trend. If you saw production pick up, then I'd be concerned." Analysts have also not let up on their skepticism about an output freeze. Russia, Saudi Arabia and several other members of the Organization of the Petroleum Exporting Countries have a preliminary deal to stop increasing production, yet they are already producing at record levels and have not said they will back down from that. On Tuesday, Qatar said that OPEC's planned meeting on April 17 should attract the world's major producing nations. But two of the cartel's members, Iran and Libya--both with some of the biggest potential for ramping up production--appear not to be coming, and it could undermine the production freeze if they don't participate, analysts have said. Without Iran or Libya, the meeting is "turning more and more into a farce," Commerzbank said in a research note. Kevin Baxter contributed to this article. Corrections & Amplifications: Total commercial stocks of oil and refined fuels rose by 9.9 million barrels to 1.354 billion barrels as of Friday, the U.S. Energy Information Administration said Wednesday. An earlier version of the story incorrectly stated that those stocks rose by 9.9 barrels. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Petroleum industry; Stocks; Futures; Crude oil prices
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 23, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775117961
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775117961?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journa l
CenterGate Sells Oil and Gas Clearinghouse After Owning It for One Year; CenterGate Capital has sold the Oil & Gas Asset Clearinghouse, an advisory and auction company, to energy-focused merchant bank OFSCap LLC.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Mar 2016: n/a.
Abstract:
OFSCap is a boutique energy investment adviser and merchant bank that specializes in cross-border transactions, with offices in Houston and Rio de Janeiro and staff in 12 countries.
Full text: CenterGate Capital has sold the Oil & Gas Asset Clearinghouse, an advisory and auction company, to energy-focused merchant bank OFSCap LLC. The terms of the sale, which was announced Tuesday, weren't disclosed. The Oil & Gas Asset Clearinghouse advises clients on buying and selling oil and gas properties, holds live auctions and maintains a database of market participants, according to a news release. The Houston company has about 20 professionals on staff and has sold more than $13 billion worth of property since its founding in 1992, the release said. Austin, Texas, firm CenterGate bought the company in February 2015, using the executives' own capital, according to an LBO Wire report. It installed a new chief executive, Harrison Williams, two months later. OFSCap is a boutique energy investment adviser and merchant bank that specializes in cross-border transactions, with offices in Houston and Rio de Janeiro and staff in 12 countries. Company founder James Row said the timing of the purchase, coming as oil prices have begun ticking up, was ideal for his company. The number of bidders on energy transactions has begun to increase, and, even absent a rebound, "people have to start rebalancing their portfolios," he said. CenterGate was founded in 2014 by a group of former H.I.G. Capital executives led by Managing Directors Tiffany Kosch, Lewis Schoenwetter and Stenning Schueppert. CenterGate is currently seeking $300 million for its debut fund, according to a Securities and Exchange Commission filing. The firm invests in the business-services, industrials, energy, consumer and health-care sectors in North America, targeting companies with revenue of $20 million to $250 million and $20 million or less in earnings before interest, taxes, depreciation and amortization, according to its website. In January, it made its first investment from the fund it is raising, buying Vision Media Management & Fulfillment LLC, a California company that provides marketing and other services to entertainment companies. http://www.centergatecapital.com http://www.ogclearinghouse.com http://ofscap.com
Subject: Merchant banks; Executives
Location: California Texas
Company / organization: Name: HIG Capital LLC; NAICS: 523910; Name: Securities & Exchange Commission; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 23, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775188784
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775188784?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Big Oil's Next Big Energy Problem; The LNG market faces an even longer recovery than oil as spot prices crater, a major project in Australia is shelved and buyers start renegotiating long-term contracts
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Mar 2016: n/a.
Abstract:
Based only on LNG projects already completed or under construction, and before the Browse news, analysts at Citigroup estimated that the global market will be oversupplied by 28 million metric tons by 2018 and that it wouldn't reach equilibrium before 2021.
Full text: No worries, mate? The country that brought us the boomerang is playing a starring role in the next phase of the energy industry's washout. While oil prices have been the source of much angst, Woodside Petroleum's announcement Wednesday that it would shelve the $40 billion Browse liquefied-natural-gas project underscored the strain. While a step in the right direction in terms of taking out future production, it still won't bring the market into balance. The move came just days after the first shipment of gas from another huge Australian LNG field, Gorgon , which is led by Chevron with partners Shell and Exxon Mobil. Low prices are a risk for any commodity producer. They are especially problematic for those that have to spend massive sums up front that can then take decades to recoup. That is why the people who put up the equity and considerable debt for an LNG facility need to see long-term contracts, often linked to long-term crude oil prices, before committing. Last year, an analyst from the International Energy Agency warned that some $200 billion in Australian LNG projects, even at $60-a-barrel oil prices, wouldn't break even for investors. Just a couple of years ago, the stars seemed to be lining up for massive projects like Gorgon and Browse, which while led by Woodside also included Shell and BP as investors. LNG demand was growing like gangbusters, particularly in markets such as China and India. And the Fukushima disaster in 2011 caused a very tight market for spot cargoes--those excess cargoes that can go anywhere to the highest bidder. These touched $20 per million British thermal units at one point and still were at $14 two years ago. But so much capacity has come on stream at a time of slowing demand from China that the benchmark Japan/Korea Marker price has crashed to around $4.40. Based only on LNG projects already completed or under construction, and before the Browse news, analysts at Citigroup estimated that the global market will be oversupplied by 28 million metric tons by 2018 and that it wouldn't reach equilibrium before 2021. The entire global LNG market last year was 250 million tons. And those oversupply estimates don't include projects on the drawing board likely to proceed such as a handful in the U.S. where domestic prices are near a 17-year low. They also assume a fairly chunky increase in demand. For example, in the Pacific basin the analysts expect compound annual growth of 8% in the coming decade. If only the spot market and crude prices were the issue, then investors in LNG megaprojects wouldn't be in such trouble. Unfortunately, long-term contracts signed in flush times, once considered sacrosanct, are coming under pressure. Now that the market has recovered from post-Fukushima tightness, countries with rising import needs are starting to brandish their bargaining power. In December, for example, Indian importer Petronet LNG worked out a new pricing formula for an existing 25-year deal with Qatar's RasGas. This effectively cut the price it pays substantially. And just last month, the chairman of China National Petroleum said his company might renegotiate existing long-term contracts. Energy companies should have seen it coming. Tight conditions earlier this decade enabled owners of reserves to cut some sweet deals on paper. Now, the potent market weapon they wielded is flying back at them. Credit: By Spencer Jakab
Subject: LNG; Crude oil prices; Energy industry
Location: China
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Woodside Petroleum Ltd; NAICS: 211111; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 23, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775200515
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775200515?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Latium Group in Talks About Emerald Oil Bid; Emerald the latest in a long line of oil and gas companies to file for chapter 11 protection
Author: Brickley, Peg
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Mar 2016: n/a.
Abstract:
In court papers, Emerald blamed its financial woes on the same steep decline in oil and gas prices that meant bankruptcy for, among others, Magnum Hunter Resources Corp., Swift Energy Co., American Eagle Energy Corp., Quicksilver Resources Inc., Saratoga Resources Inc., Sabine Oil & Gas Corp., Energy and Exploration Partners LLC and Samson Resources Corp. The commodity price drop not only slashed revenues from oil and gas that was produced, but it also chopped into the value of reserves, particularly undeveloped reserves.\n
Full text: British businessman and rugby club owner Brian Kennedy's Latium Group is in talks about leading the bidding at a bankruptcy auction of Emerald Oil Inc., which develops oil and gas wells in North Dakota. Emerald filed for chapter 11 protection Tuesday night, the latest in a long string of oil and gas companies to crumble in the face of low oil prices. Court papers say Latium Group and Emerald signed a nonbinding term sheet for a deal that could set the pace for a bankruptcy competition over the business. "The Latium transaction would allow the business to continue to operate and would provide a sound path for potential recovery for company stakeholders," McAndrew Rudisill, Emerald's president and chief executive, said in a statement. The deal in the works would allow Mr. Kennedy to enter a new industry, following previous deals that has seen the owner of the Sale Sharks Rugby Union Club buy and sell businesses in the home-improvement and renewable energy sectors, among others. The Scotland-born businessman's previous connection to the Great Plains states was in the role of Barkeep Fitzpatrick in "The Homesman," which portrays the harsh reality of frontier life. He helped finance and produce the film, allowing him to make his screen debut in a speaking role opposite Tommy Lee Jones. "Life is short. Seize the moment and the opportunities," he said Wednesday in an interview. Right now, that means operations like Emerald's, which have been swept up in the widespread distress in the energy sector. "We are in renewable energy, but we saw the oil prices coming down, and we thought this would be a good opportunity," Mr. Kennedy said. Oil prices may never rebound to the $100-per-barrel level, he said, though he believes they will recover from the current lows. When that happens, he said there will be profit in owning proven energy reserves with operating wells that cost $7 million to build but much less to buy at a bankruptcy auction. "We're paying for the oil in the ground at today's value," he said. "We will have a cash-positive business provided we don't load it up with a lot of debt, cost and professional fees." But while Latium works toward "moving on a commodity at the right time, when the price is low," as Mr. Kennedy says, Emerald, the target, doesn't have much time. Existing lenders that have offered to finance Emerald's bankruptcy are demanding that the business be sold by July 22, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Del. The chapter 11 filing followed a long and fruitless effort to find new financing or reach a deal with creditors, according to court papers. Based in Denver, the independent exploration and production company acquires acreage and develops wells in the Williston Basin of North Dakota. Only about a quarter of the rigs in the once-booming area are operating today compared with a year ago, according to a filing by Emerald chief financial officer Ryan Smith. In court papers, Emerald blamed its financial woes on the same steep decline in oil and gas prices that meant bankruptcy for, among others, Magnum Hunter Resources Corp., Swift Energy Co., American Eagle Energy Corp., Quicksilver Resources Inc., Saratoga Resources Inc., Sabine Oil & Gas Corp., Energy and Exploration Partners LLC and Samson Resources Corp. The commodity price drop not only slashed revenues from oil and gas that was produced, but it also chopped into the value of reserves, particularly undeveloped reserves. Emerald filed for bankruptcy protection "rather than remaining under the constant threat of impending creditor remedies while hoping for an immediate turnaround in both the global commodities and capital markets," Mr. Smith wrote in court papers. As of Dec. 31, 2015, Emerald estimated its assets were worth about $291 million, a figure that includes only $28 million in current assets, Mr. Smith wrote. Liabilities add up to about $337 million, including funded debt of about $260.5 million. Emerald owes about $111 million on bank loans and is carrying about $148.5 million in bond debt, court papers say. The company also has nearly $5 million worth of responsibility for closing off shut down operations to avoid environmental damage, according to court papers. Patrick Fitzgerald contributed to this article. Write to Peg Brickley at peg.brickley@wsj.com Credit: By Peg Brickley
Subject: Oil reserves; Bankruptcy; Petroleum industry; Prices; Renewable resources; Energy industry; Natural gas utilities; Natural gas reserves; Rugby
Location: North Dakota
People: Jones, Tommy Lee
Company / organization: Name: Emerald Oil Inc; NAICS: 211111; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 23, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775201261
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775201261?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Turkish Media Tycoon, Bank Chairman Charged in Fuel-Smuggling Case; Indictment alleges Aydin Dogan, Ersin Ozince involved in organized smuggling at oil-products firm
Author: Candemir, Yeliz
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Mar 2016: n/a.
Abstract:
ISTANBUL--A court in Istanbul has accepted a prosecutor's indictment accusing a Turkish media tycoon and the chairman of Turkey's largest publicly traded bank of involvement in fuel smuggling, the state-run Anadolu news agency said Wednesday.
Full text: ISTANBUL--A court in Istanbul has accepted a prosecutor's indictment accusing a Turkish media tycoon and the chairman of Turkey's largest publicly traded bank of involvement in fuel smuggling, the state-run Anadolu news agency said Wednesday. The indictment charges 47 defendants--including Aydin Dogan, the founder and owner of Dogan Holding AS, a Turkish conglomerate with investments from media to energy, and Ersin Ozince, chairman of Turkiye Is Bankasi AS--with organized fuel smuggling between 2001 and 2008 when their companies were stakeholders in Petrol Ofisi, which is now known as OMV Petrol Ofisi AS, according to Anadolu. Dogan Holding and Isbank were stakeholders in the Istanbul-based fuel and oil products retailer until the Austrian gas and oil company OMV AG bought the company in 2010 . The prosecutor seeks jail terms of 8 1/2 to 24 1/2 years for Mr. Dogan and Mr. Ozince on the charges of establishing an organization for the purpose of criminal activity and violating the anti-smuggling law, according to Anadolu. The first hearing in the case is scheduled for July 13. Dogan Holding, in a statement, said that all the allegations were "baseless" and "slander." "We are strongly confident that the judicial process will prove that there is no legal ground of allegations regarding the Bank's Chairman and managers, and necessary legal actions will be taken to protect the legal rights of our Bank, the Chairman and managers of our Bank," Isbank said Wednesday in a statement to the stock exchange. Dogan Holding shares fell 3.6% and Isbank shares were down 3.3% on Wednesday, while Turkey's main BIST-100 stock index closed 1.7% lower. In 2009, Dogan Holding was fined 4.8 billion Turkish lira ($1.66 billion) on a charge related to tax irregularities. Mr. Dogan at the time said the charge was politically motivated , but the Finance Ministry refuted the allegation. For most of the AKP's nearly 14 years in power, the party has "been mindful of not crossing certain red lines" that would send a message that it interferes in Turkey's business environment, said Tim Ash, an emerging-markets economist at Nomura in London. "I think this case will be closely monitored in terms of the strength of the case and the fairness of the legal process involved." Write to Yeliz Candemir at yeliz.candemir@wsj.com Credit: By Yeliz Candemir
Subject: Indictments; Smuggling
Location: Turkey
Company / organization: Name: Isbank; NAICS: 522110; Name: Dogan Sirketler Grubu Holding AS; NAICS: 551112; Name: OMV AG; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 23, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775230498
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775230498?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil's Decline Takes Toll on Saudi Conglomerate; Saudi Binladin Group struggles with massive debt as government cuts funding for megaprojects
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Mar 2016: n/a.
Abstract:
[...]this is the government saying to them: you've become obscenely rich during the past 20 years but for the first time the kingdom has bigger problems to contend with," said a creditor of the Binladin group with a major regional bank. The government's response to dwindling oil revenues--cutting back oil and utilities subsidies to ease budgetary pressures as well as big ticket infrastructure projects--appears to have hit the construction industry particularly hard.
Full text: A construction conglomerate at the center of Saudi Arabia's petrodollar-fueled economic boom is teetering under billions of dollars of debt, bankers and financial advisers familiar with the matter said, showing the strain of cheap oil on the kingdom and its companies. The Saudi Binladin Group was once among the biggest beneficiaries of Saudi Arabia's massive spending at home, paid for by the kingdom's growing oil wealth. But in the past half year, it has hit hard times. An executive at one of SBG's subsidiaries said the parent company hadn't provided any funding to the unit for more than six months, triggering a funding crunch that has stalled longer-term plans. Several subcontractors and suppliers involved in Binladin projects also haven't been paid for months, according to the bankers and advisers who know about the company's finances. And at the end of February, hundreds of SBG workers took to the streets demanding unpaid wages for work in Islam's holiest city, Mecca, a rare episode of labor unrest in the Arab world's largest economy. Regional and international bankers say the group is sitting on more than $30 billion in debt. The Persian Gulf's biggest construction conglomerate has already defaulted on an unspecified number of debt repayments, said two creditors of the group. The main reason behind the defaults, the creditors and advisers say, is that the Saudi government has failed to make payments on time for completed or ongoing construction work. The country's finance ministry didn't respond to requests for comment by phone and email. Roughly three quarters of Saudi Arabia's budget stems from the sale of oil, and crude prices have declined since the middle of 2014, leaving the government with a gaping near-$100 billion budget deficit, according to the country's latest budget statement released in December. "In a way this is the government saying to them: you've become obscenely rich during the past 20 years but for the first time the kingdom has bigger problems to contend with," said a creditor of the Binladin group with a major regional bank. SBG has declined repeated requests, through emails and phone calls, to discuss its situation. SBG, a family-owned company, doesn't disclose its financial statements. The group hasn't made any public announcements on the labor unrest or its financial health. Some at SBG are playing down the troubles. Two executives, including a Gulf-based banker and a manager at one of the conglomerate's' subsidiaries, who recently met with leading members of SBG, said the construction firm's management remained confident it would weather current problems. "The very key message was: There is no crisis within Binladin," said one of the executives. The government's response to dwindling oil revenues--cutting back oil and utilities subsidies to ease budgetary pressures as well as big ticket infrastructure projects--appears to have hit the construction industry particularly hard. SBG accounts for about 70% of Saudi government construction contracts by value according to some industry estimates, making it the construction group most vulnerable to a slowdown in spending. The group has gone through turbulent times before. After the 9/11 attacks, the Binladin family name became associated with Osama bin Laden, the founder of al Qaeda. Back then, the group had to contend with lawsuits brought by family members of those killed in the attacks. Osama bin Laden, one of the SBG founder's many sons, never played a role in the company operations, and the lawsuits were eventually dismissed. The company managed to maintain its close ties with the Saudi leadership and continued to win large mandates, including contracts worth billions of dollars to expand the holy cities Mecca and Medina, as well as public infrastructure projects. The contracts cemented the Binladins' place among the kingdom's wealthiest, nonroyal families. In financing these megaprojects, the group has accumulated significant debt, several of the company's lenders said. Saudi banks, as well as international financial institutions, rushed to extend credit to a group that was considered the Saudi government's preferred contractor. That view dimmed in September last year when high winds knocked a company crane into Mecca's holy mosque, killing more than a hundred religious pilgrims. The deadly crane accident was a public-relations disaster for Saudi Arabia, whose king is also called the Custodian of the Two Holy Mosques. The accident also strained the relationship between SBG and the country's leadership, according to the bankers and advisers close to the group. After the crane accident, Saudi King Salman barred SBG from taking new projects and banned top executives from travel. An initial probe by the Saudi authorities found that strong winds caused the crane to collapse. But it also attributed part of the blame to SBG, saying the "crane was in a wrong position." SBG didn't comment on the findings. A full investigation has yet to be completed, and there is been no update from the government since September. The royal rebuke came as the company was trying to reel in costs and secure new lines of credit. The group decided last year to eliminate 15,000 jobs out of a workforce of approximately 200,000, while it failed to pay some of its employees and subsidiaries, according to the bankers and financial advisers close to SBG. SBG has also been in talks with some banks to raise new funding that would allow it to finish ongoing projects and cover some immediate loan repayments but the outcome of those discussions is still unclear, according to these people. The failure to pay some of its employees has stirred labor tensions in the kingdom where large demonstrations are rare. Hundreds of SBG workers took to the streets at the end of February to demand unpaid wages, according to a Saudi official and local media reports. Similar protests had taken place weeks before in Jeddah as well. After police intervened, and following meetings with company representatives, the protesters obtained a guarantee they would receive their unpaid wages and also the chance to leave the country or switch employer, the Saudi official said.. "Saudi Binladin Group has failed to pay their workers for months," said Khaled Abalkhail, a spokesman for the labor ministry. "They have been sanctioned according to regulations." SBG didn't comment on the unrest. In the absence of Western-style bankruptcy courts in Saudi Arabia, bankers warn that any sort of restructuring proceedings at SBG would be lengthy and complicated. The restructuring of another family conglomerate called Ahmad Hamad Algosaibi & Bros. is still continuing after it ran into trouble in 2009. A financial adviser familiar with the SBG situation said, "There will have to be a political solution." Bankers, executives and advisers close to the group say it is unlikely SBG will ever be allowed to go under, despite the severely strained relationship with the Saudi government following the crane accident. "It's too big to fail," said a creditor at a Persian Gulf bank company who is close to SBG. "It's an integral part of the Saudi system so they will find a solution," the person said. Ahmed Al Omran and Asa Fitch contributed to this article. Write to Nicolas Parasie at nicolas.parasie@wsj.com Credit: By Nicolas Parasie
Subject: Budget deficits; Construction; Funding; International finance; Project finance
Location: Saudi Arabia
People: Bin Laden, Osama
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 23, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775254322
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775254322?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Takes Biggest Losses in a Month as Stockpiles Keep Growing; Market losses being limited by continued talk about a production freeze
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
[...]gasoline stockpiles fell by 4.6 million barrels, double analysts' expectations and larger than the three-million-barrel declines that are common during this time of year as driving season typically starts, according to investment bank Tudor, Pickering, Holt & Co. Gasoline helped support the market, settling down just 2.9% at $1.4541 a gallon. [...]the fact that Cushing drew took a little bit of the pressure off. .. Because it's a big number doesn't mean it's a trend.
Full text: Oil prices took some of their biggest losses of the last month on Wednesday as data showed U.S. stockpiles keep rising and production is holding strong, which thwarted recent bets that those trends may be winding down. Light, sweet crude for May delivery settled down $1.66, or 4%, at $39.79 a barrel on the New York Mercantile Exchange, the worst percentage loss since Feb. 23. Brent, the global benchmark, lost $1.32, or 3.2%, to $40.47 a barrel on ICE Futures Europe. Total commercial stocks of oil and refined fuels rose by 9.9 million barrels to 1.354 billion barrels as of Friday, the U.S. Energy Information Administration said. It is a record high, buoyed almost solely by crude, which added 9.4 million barrels for the week. That addition was more than three times the size of analysts' expectations, and also outpaced industry estimates and a strong draw from gasoline stockpiles. More * Heard: Big Oil's Next Big Energy Problem * Crude Price Crashed? Traders Don't Care * Commodity Volatility to Continue: Citi The size of total combined stockpiles has taken on growing importance in recent weeks as traders around the world await the moment when high stockpiles start to decline. Both crude and refined fuel stockpiles have hit historic highs and they need to start falling before prices can rise substantially, according to several analysts. Total oil storage levels have now grown 10 out of the last 13 weeks, and the latest record dates back to 1990. Crude stocks alone hit 532 million barrels, a record of its own. In monthly data, which don't line up exactly with the weekly data, inventories last exceeded 500 million barrels in 1930. "Production is still the same," said John Macaluso, vice president at Tyche Capital Advisors LLC, which manages about $6 million in assets. "Nothing's really changed. The supply issue is going to continue to get worse." Oil futures have spent more than a month going steadily upward, with total gains of more than 50%, their biggest rally in years. Much of that came from tightening markets in Europe, and talk of a coordinated output freeze from Russia, Saudi Arabia and some of the world's other large exporters. But many traders have also been anticipating output cuts from U.S. producers, which have been slow to come despite prices being down about 35% from last year's highs. U.S. production fell last week by only 30,000 barrels, according to EIA data. That was more than canceled out by imports--a factor that often confounds forecasters--which increased by 691,000 barrels. Analysts had expected only a 2.9-million-barrel addition in crude, and the heavy imports probably helped that forecast to turn out so far off, a broker and analysts said. The losses could have been worse, traders and brokers said. Many had anticipated a large stockpile increase because the American Petroleum Institute, an industry group, reported late Tuesday that oil stockpiles would have a big increase, 8.8 million barrels. EIA data also showed that stocks at Cushing, Okla., the delivery point for the West Texas Intermediate contract, fell by 1.3 million barrels. And gasoline stockpiles fell by 4.6 million barrels, double analysts' expectations and larger than the three-million-barrel declines that are common during this time of year as driving season typically starts, according to investment bank Tudor, Pickering, Holt & Co. Gasoline helped support the market, settling down just 2.9% at $1.4541 a gallon. Stocks of distillates, which include heating oil and diesel, added 917,000 barrels and diesel futures fell 3.8% to $1.2040 a gallon. "Gasoline should really lead the market this time of year," said Todd Gross, chief investment officer at QERI LLC. "And the fact that Cushing drew took a little bit of the pressure off. ... Because it's a big number doesn't mean it's a trend. If you saw production pick up, then I'd be concerned." Analysts have also not let up on their skepticism about an output freeze. Russia, Saudi Arabia and several other members of the Organization of the Petroleum Exporting Countries have a preliminary deal to stop increasing production, yet they are already producing at record levels and have not said they will back down from that. On Tuesday, Qatar said that OPEC's planned meeting on April 17 should attract the world's major producing nations. But two of the cartel's members, Iran and Libya--both with some of the biggest potential for ramping up production--appear not to be coming, and it could undermine the production freeze if they don't participate, analysts have said. Without Iran or Libya, the meeting is "turning more and more into a farce," Commerzbank said in a research note. Kevin Baxter contributed to this article. Corrections & Amplifications: Total commercial stocks of oil and refined fuels rose by 9.9 million barrels to 1.354 billion barrels as of Friday, the U.S. Energy Information Administration said Wednesday. An earlier version of the story incorrectly stated that those stocks rose by 9.9 barrels. Also, Todd Gross, chief investment officer of QERI LLC, said, "And the fact that Cushing drew took a little bit of pressure off." An earlier version incorrectly stated that it grew. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Petroleum industry; Stocks; Futures; Crude oil prices
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775262218
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775262218?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journa l
U.S. Yields Hit Nearly 2-Week Low as Stocks, Oil Weaken
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
0320 GMT [Dow Jones] The bond market may be a better solution to address China's corporate debt and loan problems, while debt-equity swaps will do more harm than good, says ANZ.
Full text: US stocks opened lower, joining the weak tone from European equity markets and lower oil prices. That encouraged more buying in Treasury debt and sent the 10-year yield to the lowest level in nearly two weeks. Investors lightened up on riskier assets and parked cash in highly-liquid government debt ahead of Easter, traders say. "We have a general risk off tone in front of the holiday weekend," said Larry Milstein, managing director of government-debt trading at RW Pressprich. The US 10-year yield was 1.858% vs 1.873% Wednesday. Write to Min Zeng at min.zeng@wsj.com Credit: By Min Zeng
Subject: Banking industry; Corporate debt; Equity
Location: China
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775274031
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775274031?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Futures Pause in Asia Following Deep Rout; May Brent crude on London's ICE Futures exchange was flat at $40.47 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
"Profit-taking in the energy space, as stronger-than-expected U.S. crude oil inventories, and a relatively stronger dollar left crude oil prices falling back," OCBC analysts wrote to clients in a note.
Full text: Oil futures were little changed in early Asia trading Thursday, pausing after their biggest one-day rout in more than a month. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May eased 13 cents, or 0.4%, to $39.66 a barrel in the Globex electronic session. May Brent crude on London's ICE Futures exchange was flat at $40.47 a barrel. The lull followed a steep decline in prices overnight, with Nymex crude sinking 4% on Wednesday, while Brent crude shed 3.2%. Oil prices sank overnight after a report from the U.S. Department of Energy showed domestic crude stockpiles soared by 9.4 million barrels in the most recent week. The increase blew past analyst expectations and indicated supply continued to swamp demand in the world's biggest oil consumer. Analysts had expected only a 2.9 million-barrel rise in crude inventories. The report sent oil prices spiraling during U.S. trading hours. A firmer dollar continued to keep a lid on oil prices Thursday. A stronger greenback tends to weigh on crude by making the dollar-denominated commodity more expensive in other currencies. The WSJ Dollar Index, a trade-weighted measure of the currency, rose 0.2%. "Profit-taking in the energy space, as stronger-than-expected U.S. crude oil inventories, and a relatively stronger dollar left crude oil prices falling back," OCBC analysts wrote to clients in a note. Analysts pointed out that the sharp decline in U.S. gasoline stockpiles suggested demand for refined fuels remained strong. A sharp rise in oil imports to China in February indicated consumption of oil world-wide has been stoked by the deep selloff in oil prices. Still, gasoline futures lost ground on Wednesday, and continued to slide Thursday. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--fell 47 points to $1.4494 a gallon recently. Investors are now focusing on a planned meeting of major oil producers set for April 17, though analysts are increasingly skeptical that a firm agreement on freezing output will materialize. Iran and Libya, two key members of the Organization of the Petroleum Exporting Countries, appear unlikely to participate in any output freeze, likely blunting the impact of any potential agreement. April diesel traded at $1.2055, 15 points higher. ICE gas oil for April changed hands at $360.50 a metric ton, down $2.50 from Wednesday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Crude oil; Crude oil prices; Petroleum industry; Inventory
Location: United States--US Asia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775293528
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775293528?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil's Decline Takes Toll On Saudi Conglomerate
Author: Parasie, Nicolas
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Mar 2016: B.1.
Abstract:
[...]this is the government saying to them: you've become obscenely rich during the past 20 years but for the first time the kingdom has bigger problems to contend with," said a creditor of the Binladin group with a major regional bank. The government's response to dwindling oil revenues -- cutting back oil and utilities subsidies to ease budgetary pressures as well as big ticket infrastructure projects -- appears to have hit the construction industry particularly hard.
Full text: A construction conglomerate at the center of Saudi Arabia's petrodollar-fueled economic boom is teetering under billions of dollars of debt, bankers and financial advisers familiar with the matter said, showing the strain of cheap oil on the kingdom and its companies. The Saudi Binladin Group was once among the biggest beneficiaries of Saudi Arabia's massive spending at home, paid for by the kingdom's growing oil wealth. But in the past half year, it has hit hard times. An executive at one of SBG's subsidiaries said the parent company hadn't provided any funding to the unit for more than six months, triggering a funding crunch that has stalled longer-term plans. Several subcontractors and suppliers involved in Binladin projects also haven't been paid for months, according to the bankers and advisers who know about the company's finances. And at the end of February, hundreds of SBG workers took to the streets demanding unpaid wages for work in Islam's holiest city, Mecca, a rare episode of labor unrest in the Arab world's largest economy. Regional and international bankers say the group is sitting on more than $30 billion in debt. The Persian Gulf's biggest construction conglomerate has already defaulted on an unspecified number of debt repayments, said two creditors of the group. The main reason behind the defaults, the creditors and advisers say, is that the Saudi government has failed to make payments on time for completed or ongoing construction work. The country's finance ministry didn't respond to requests for comment by phone and email. Roughly three quarters of Saudi Arabia's budget stems from the sale of oil, and crude prices have declined since the middle of 2014, leaving the government with a gaping near-$100 billion budget deficit, according to the country's latest budget statement released in December. "In a way this is the government saying to them: you've become obscenely rich during the past 20 years but for the first time the kingdom has bigger problems to contend with," said a creditor of the Binladin group with a major regional bank. SBG has declined repeated requests, through emails and phone calls, to discuss its situation. SBG, a family-owned company, doesn't disclose its financial statements. The group hasn't made any public announcements on the labor unrest or its financial health. Some at SBG are playing down the troubles. Two executives, including a Gulf-based banker and a manager at one of the conglomerate's' subsidiaries, who recently met with leading members of SBG, said the construction firm's management remained confident it would weather current problems. "The very key message was: There is no crisis within Binladin," said one of the executives. The government's response to dwindling oil revenues -- cutting back oil and utilities subsidies to ease budgetary pressures as well as big ticket infrastructure projects -- appears to have hit the construction industry particularly hard. SBG accounts for about 70% of Saudi government construction contracts by value according to some industry estimates, making it the construction group most vulnerable to a slowdown in spending. The group has gone through turbulent times before. After the 9/11 attacks, the Binladin family name became associated with Osama bin Laden, the founder of al Qaeda. Back then, the group had to contend with lawsuits brought by family members of those killed in the attacks. Osama bin Laden, one of the SBG founder's many sons, never played a role in the company operations, and the lawsuits were eventually dismissed. The company managed to maintain its close ties with the Saudi leadership and continued to win large mandates, including contracts worth billions of dollars to expand the holy cities Mecca and Medina, as well as public infrastructure projects. The contracts cemented the Binladins' place among the kingdom's wealthiest, nonroyal families. In financing these megaprojects, the group has accumulated significant debt, several of the company's lenders said. Saudi banks, as well as international financial institutions, rushed to extend credit to a group that was considered the Saudi government's preferred contractor. That view dimmed in September last year when high winds knocked a company crane into Mecca's holy mosque, killing more than a hundred religious pilgrims. The deadly crane accident was a public-relations disaster for Saudi Arabia, whose king is also called the Custodian of the Two Holy Mosques. The accident also strained the relationship between SBG and the country's leadership, according to the bankers and advisers close to the group. After the crane accident, Saudi King Salman barred SBG from taking new projects and banned top executives from travel. An initial probe by the Saudi authorities found that strong winds caused the crane to collapse. But it also attributed part of the blame to SBG, saying the "crane was in a wrong position." SBG didn't comment on the findings. The group decided last year to eliminate 15,000 jobs out of a workforce of approximately 200,000. SBG has also been in talks with some banks to raise new funding that would allow it to finish ongoing projects and cover some immediate loan repayments but the outcome of those discussions is still unclear, according to these people. Hundreds of SBG workers took to the streets at the end of February to demand unpaid wages, according to a Saudi official and local media reports. Similar protests had taken place weeks before in Jeddah as well. After police intervened, and following meetings with company representatives, the protesters obtained a guarantee they would receive their unpaid wages and also the chance to leave the country or switch employer, the Saudi official said.. "Saudi Binladin Group has failed to pay their workers for months," said Khaled Abalkhail, a spokesman for the labor ministry. "They have been sanctioned according to regulations." SBG didn't comment on the unrest. Bankers, executives and advisers close to the group say it is unlikely SBG will ever be allowed to go under. "It's too big to fail," said a creditor at a Persian Gulf bank company who is close to SBG. "It's an integral part of the Saudi system so they will find a solution," the person said. --- Ahmed Al Omran and Asa Fitch contributed to this article. Credit: By Nicolas Parasie
Subject: Budget deficits; Construction; International finance; Project finance; Petroleum industry
Location: Saudi Arabia
Company / organization: Name: Saudi Binladen Group; NAICS: 551112
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Mar 24, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775302540
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775302540?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Stocks Snap Five Weeks of Advances; S&P 500 slips back into negative territory for the year; oil posts 4.1% weekly drop
Author: Kuriloff, Aaron
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
Federal Reserve Bank of St. Louis President James Bullard said Thursday that "the next rate increase may not be far off provided that the economy evolves as expected," adding to upbeat comments from Fed officials this week.
Full text: U.S. stocks ended five consecutive weeks of gains Thursday, as a rally that carried shares to their highest levels of the year petered out during a holiday-shortened week. The S&P 500 slid back into negative territory for the year, down 0.4%, while the Dow industrials clung to a small gain of 0.5% in a week that included the three lowest-volume trading days of 2016. Many global markets will be closed for Good Friday. The Dow Jones Industrial Average rose 13.14 points, or less than 0.1%, to 17515.73 Thursday, bringing its loss to 0.5% for the week. The S&P 500 declined 0.77, or less than 0.1%, Thursday to 2035.94, for a weekly fall of 0.7%. The Nasdaq Composite gained 4.64, or 0.1%, to 4773.50, shedding 0.5% for the week. U.S. oil prices also snapped a five-week winning streak after rising more than 50% since a low on Feb. 11. Crude fell 4.1% for the week to $39.46 a barrel as data showed U.S. supplies reaching all-time highs and the dollar strengthened. "Oil's tired of running higher and the dollar's tired of running lower, so we're getting this countertrend move that's taking the market with it," said Bob Doll, senior portfolio manager at Nuveen Asset Management. Hints that the Federal Reserve could raise interest rates sooner than expected fueled gains in the dollar. The WSJ Dollar Index, which measures the buck against a basket of 16 currencies, rose 0.1% Thursday to 87.89, its fifth trading day in a row of increases. Federal Reserve Bank of St. Louis President James Bullard said Thursday that "the next rate increase may not be far off provided that the economy evolves as expected," adding to upbeat comments from Fed officials this week. Related News * More Oil Fallout: Bad Energy Loans Set Soon to Outnumber the Good * Dissent Starts to Disappear at the Fed * A Strange Signal from the Markets: Stagflation? Federal-funds futures, used by investors and traders to bet on central-bank policy, showed a 12% likelihood of a rate increase from the Fed at its April policy meeting, according to data from CME Group. The odds were 2% a month ago. The probability of a rate increase at the Fed's June policy meeting was 41%, compared with 18% a month ago. U.S. government bonds pulled back Thursday as investors took some chips off the table ahead of a closed market on Friday, with traders saying lackluster volume exaggerated price swings. The yield on the 10-year Treasury note rose to 1.902%, from 1.873% Wednesday and 1.871% last Friday. Bond prices fall as yields rise. Mary Ann Hurley, vice president of trading in Seattle at D.A. Davidson & Co., said investors tilted their positioning toward bonds into "neutral" in case of an "unexpected surprise over the long weekend." Gold fell 2.6% this week to $1,221.40 an ounce. The Stoxx Europe 600 declined 1.5% Thursday. Japan's Nikkei Stock Average fell 0.6% Thursday after a summary of opinions from Bank of Japan policy makers showed rising tension over negative rates. Australia's commodity-heavy S&P/ASX 200 fell 1.1%. Stocks in Shanghai fell 1.6% amid concerns about increased short selling and after Chinese authorities guided the yuan weaker against the dollar in the biggest one-day depreciation since early January. Min Zeng contributed to this article. In the Markets * Dollar Continues to Strengthen * Oil Extends Fall as Stockpile Worries Resurface * Gold Dragged Down by Stronger Dollar * Treasurys Pull Back * Asia Shares Decline Write to Riva Gold at riva.gold@wsj.com and Aaron Kuriloff at aaron.kuriloff@wsj.com Credit: By Aaron Kuriloff
Subject: Interest rates; American dollar; Investments; Central banks; Dow Jones averages
Location: United States--US
People: Bullard, James
Company / organization: Name: D A Davidson & Co; NAICS: 523110, 523120; Name: CME Group; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775310628
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775310628?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
China's Oil Giants Get on a Fitness Regimen; PetroChina is strengthening itself by trimming production
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
[...]not only did operating cash flow pay for capital expenditure and dividends, it also left $6.6 billion of cash flow to spare .
Full text: In these difficult times of $40 oil, China's state oil majors are finally turning to religion. The biggest, PetroChina, reported results late Wednesday that had discipline written all over it. Start with its guidance that it would cut production of oil and gas by 2.7% in 2016. Fellow state producer Cnooc made a similar decision earlier this year, an extraordinarily difficult one for Chinese behemoths, who for so long appeared politically motivated to achieve size and growth. Trimming supply suggests these companies are following commercial logic. Since oil fields naturally decline in output, raising production next year would have required more spending this year--but with insufficient, perhaps even negative, returns at current oil prices. That makes PetroChina's second big sign of discipline important: Its 2015 capital spending came in 24% below what it had budgeted for the year, and 31% below 2014 levels. The company rightly reacted to oil prices staying stubbornly low last year. As a result, not only did operating cash flow pay for capital expenditure and dividends, it also left $6.6 billion of cash flow to spare . Net debt dropped to 30.7% of shareholder equity as of December, from 33.3% at the end of 2014. No other global supermajor finished 2015 with lower leverage than it began the year, Laban Yu at Jefferies says. PetroChina is also wisely holding out no hope for an oil rally this year. Despite last year's cuts, it is budgeting 5% less capital expenditure for 2016. Some investors may be concerned that PetroChina's proven oil and gas reserves fell, and at current rates of production will be exhausted in 14.6 years from 15.8 in 2014. Yet the company hasn't elaborated on how much reserves fell because low oil prices forced it to recalculate the viability of extracting its earlier discoveries, and how much was because of fewer new discoveries. This distinction matters. A technical revision means reserves could always rise alongside oil prices. On the other hand, discovering little new oil or gas, though understandable in today's environment, could leave wells dry down the road. Keep in mind, too, that reserve lives are falling across the industry. PetroChina's reserves will actually last it longer than most supermajors. Its 1.1-year drop last year is only slightly worse than Exxon Mobil's. With futures markets forecasting only a marginal rise in oil prices this year, PetroChina shareholders are still awaiting their salvation. But at least the company is gaining the strength to withstand pain. Write to Abheek Bhattacharya at abheek.bhattacharya@wsj.com Credit: By Abheek Bhattacharya
Subject: Petroleum industry; Oil reserves; Natural gas reserves; Capital expenditures; Budgets
Location: China
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775324654
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775324654?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Extend Losses; Falls coincide with low trading volumes ahead of Easter weekend
Author: Berthelsen, Christian; Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
[...]the market remained overshadowed by Wednesday's bearish report from the U.S. Energy Department showing U.S. crude supplies climbed by 9.4 million barrels last week, three times as high as the consensus estimate of analysts surveyed by The Wall Street Journal.
Full text: Oil prices extended losses Thursday after U.S. supply data a day earlier showed swelling stockpiles and stubbornly high production, further retreating from the $40-a-barrel range and dashing the view of bullish investors banking on the start of a reversal for the world's crude oversupply. The benchmark U.S. oil contract ended down 0.8% at $39.46 a barrel on the New York Mercantile Exchange--its third losing session in a row, now down nearly 5% from its 2016 peak set earlier in the week. The market fell early in the session and pared losses over the course of the day but never turned positive, coming on top of a 4% decline Wednesday. The global Brent contract fell 0.1% to $40.44 a barrel on the ICE Futures Europe exchange. The crude markets will be closed Friday in observance of the Good Friday holiday. Both contracts posted their first weekly loss after four weeks of gains, with the U.S. benchmark losing 4.1% and the Brent contract falling 1.8%. Part of the market's recovery off its lows Thursday was driven by new data from Baker Hughes Inc. showing the number of rigs drilling for oil in the U.S. fell by 15 this week, resuming a three-month decline interrupted last week by an increase of a single rig. The total number of oil rigs fell to a seven-year low of 372. Still, the market remained overshadowed by Wednesday's bearish report from the U.S. Energy Department showing U.S. crude supplies climbed by 9.4 million barrels last week, three times as high as the consensus estimate of analysts surveyed by The Wall Street Journal. And domestic production remained above nine million barrels a day. "We see limited bullish assistance to the [oil] complex from a fundamental vantage point despite today's reported decline in the oil rig count," research consultancy Ritterbusch and Associates said. "The crude market may be unable to balance before year's end." The oil markets rallied more than 50% since reaching multiyear nadirs in early February, as bearish traders closed out so-called short sales betting on further declines in the market, and bullish investors grew optimistic that the low prices would finally force producers to begin curtailing output. But the decline in U.S. production has been minimal, and stockpiles have swelled to all-time highs of 532 million barrels. Meanwhile, major foreign state producers including Russia, Saudi Arabia and other members and nonmembers of the Organization of the Petroleum Exporting Countries have scheduled a meeting in Doha, Qatar, on April 17 to discuss freezing output at January levels. Still, that pace of output is near a record high, with most countries producing at their maximum ability, and would do little to curtail the oversupply estimated to be growing at a rate of one million to two million barrels a day. "The fundamental picture after all remains weak," Commerzbank said in a note. "There are no viable arguments on the oil market for price rises." Analysts said some factors could begin to tighten supplies: a power crisis in Venezuela that could curtail the country's crude exports, and Brazilian oil major Petrobras closing 11 oil fields to cut costs. But another big issue for the crude market is refined products, according to London-based analysts Energy Aspects. Higher demand for products is often good news for the crude price because it means more stocks can be used up in refineries. Refined fuels are building at a rapid rate, even though demand for products such as gasoline is strong. The refinery maintenance period has begun in the U.S. and in Europe and that means that fuel production is significantly lower and less crude is being soaked up. In refined product markets, gasoline futures rose 0.8% to $1.4659 a gallon, and diesel futures fell 0.5% to $1.1979 a gallon. Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen and Miriam Malek
Subject: Petroleum industry; Supply & demand
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775341822
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775341822?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Chinese Oil Producer Cnooc Seeks Solace at Home; Cnooc is refocusing on domestic production after posting its weakest earnings in over a decade
Author: Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
[...]Cnooc said its oil-and-gas production would likely shrink this year, marking its first annual decline since before it listed in 2001.
Full text: BEIJING--After more than a decade of empire building in Canada, Africa and beyond, Chinese offshore oil-and-gas company Cnooc Ltd. is refocusing on its home front. China's third-largest producer of oil and gas on Thursday posted its weakest annual earnings in more than 10 years, hurt by a faltering array of overseas projects and low oil prices that show little sign of a quick recovery. In response, Chairman Yang Hua said state-controlled Cnooc is turning its attention to China after years of heavy spending to develop a global presence and tap unconventional energy reserves , such as the tar-like oil sands of Canada. "In the area of exploration, we will prioritize exploration work offshore China," Mr. Yang said in the earnings statement. Cnooc's new focus on core offshore operations at home follows years of struggles to increase production abroad, and underlines its desire to be the most aggressive cost cutter among China's oil giants. The challenges have been most evident in Canada, where Cnooc bought oil-sands producer Nexen in 2013 for $15 billion. The company has struggled with cost overruns and limited production there, as well as an oil spill and workers' deaths that have drawn regulatory scrutiny. Executives said Thursday that after a January explosion that killed two workers at the company's Long Lake oil-sands project in northern Alberta, it had cut production there to one-third of its original 50,000 barrel-a-day capacity during an investigation of the blast. In a briefing with reporters, Mr. Yang emphasized operational safety, saying Cnooc's efforts over the past few years to raise efficiency were succeeding "but safety absolutely cannot be slackened." Cnooc said in its earnings report that its overseas oil-and-gas production rose 5% last year to 172.3 million barrels of oil equivalent, lagging behind production growth of about 20% at home. Output in Canada fell 14%, the company said. Much of the domestic growth came from oil-and-gas blocks in the Bohai Bay, off China's northeast coast, and in the South China Sea. Analysts said such domestic projects were among the more profitable in Cnooc's portfolio. The company said operating expenses for its Chinese operations were about $8 per barrel of oil equivalent last year, compared with nearly $13 for overseas projects. Cnooc said its net profit in 2015 slumped 66% to 20.25 billion yuan ($3.11 billion), its worst tally since 2004. The results, however, beat the 18.1 billion yuan average forecast of analysts polled by S&P Global Market Intelligence. The company responded to the oil-price drop by pledging to cut capital spending by more than 10% this year. As a result, Cnooc said its oil-and-gas production would likely shrink this year, marking its first annual decline since before it listed in 2001. The steep drop in crude prices has hurt the bottom lines of oil producers world-wide, in particular China's state-owned oil companies that tend to be less efficient than their global peers. PetroChina Co., China's largest oil company by production, said on Wednesday that its 2015 profit plummeted 67% . However, Cnooc's setbacks best illustrate the complications Chinese oil companies have faced overseas, particularly as many scooped up assets in expensive deals when oil prices were near their peak a few years ago. Those challenges will persist if oil prices continue to hover around $40 a barrel. Cnooc said prices will likely remain depressed this year, but didn't provide a detailed forecast. PetroChina said Wednesday it expects international crude prices to remain in the $40-$50 range this year. Write to Brian Spegele at brian.spegele@wsj.com Credit: By Brian Spegele
Subject: Petroleum industry; Oil reserves; Corporate profits; Energy economics; Capital expenditures; Offshore; Crude oil prices; Oil sands
Location: China Africa Canada
Company / organization: Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775392673
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775392673?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or dist ribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Denham-Backed Covey Park Energy to Buy Assets in Louisiana's DeSoto, Bossier Parishes; Covey Park Gas LLC, a subsidiary of Denham Capital-backed oil and gas exploration and production company Covey Park Energy LLC, has agreed to pay $420 million for all of publicly traded EP Energy Corp.'s assets in the Haynesville and Bossier shales.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract: None available.
Full text: Covey Park Gas LLC, a subsidiary of Denham Capital-backed oil and gas exploration and production company Covey Park Energy LLC, has agreed to pay $420 million for all of publicly traded EP Energy Corp.'s assets in the Haynesville and Bossier shales. The assets, primarily located in Louisiana's DeSoto and Bossier parishes, consist of approximately 34,167 net acres with an average production of 113 million cubic feet per day in the fourth quarter of 2015, according to a news release. Pro forma for the sale, Covey Park will own approximately 137,000 net acres of leasehold in Texas and Louisiana. The transaction is expected to close in the second quarter. Formed in 2013 with an equity commitment from Denham Capital, Covey Park Energy, of Dallas, is focused on the acquisition and exploitation of long-life reserves in the Ark-La-Tex and Mid-Continent regions. Energy- and resources-focused firm Denham Capital has more than $8.4 billion of invested and committed capital across eight fund vehicles. The firm has offices in Houston, London, Boston, São Paulo and Perth, Australia. www.coveypark.com www.denhamcapital.com
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775427010
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775427010?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Coming to the Oil Patch: Bad Loans to Outnumber the Good; In response, several major banks are reducing their exposure to the energy sector
Author: Olson, Bradley; Glazer, Emily; Jarzemsky, Matt
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
About 1.5% to 3% of the loan portfolios of Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo were outstanding to the oil-and-gas sector in January, according to Goldman Sachs Group Inc. and Evercore ISI.
Full text: Bad loans are likely to outnumber good ones soon in the U.S. oil patch, an indication of the pressure on energy companies and their lenders from the crash in prices. The number of energy loans labeled as "classified," or in danger of default, is on course to extend above 50% this year at several major banks, including Wells Fargo & Co. and Comerica Inc., according to bankers and others in the industry. In response, several major banks are reducing their exposure to the energy sector by attempting to sell off souring loans, declining to renew them or clamping down on the ability of oil and gas companies to tap credit lines for cash, according to more than a dozen bankers, lawyers and others familiar with the plans. The pullback is curtailing the flow of money to companies struggling to survive a prolonged stretch of low prices, likely quickening the path to bankruptcy for some firms. Fifty-one North American oil-and-gas producers have already filed for bankruptcy since the start of 2015, cases totaling $17.4 billion in cumulative debt, according to law firm Haynes and Boone LLP. That trails the number from September 2008 to December 2009 during the global financial crisis, when there were 62 filings, but is expected to grow: About 175 companies are at high risk of not being able to meet loan covenants, according to Deloitte LLP. "This has the makings of a gigantic funding crisis" for energy companies, said William Snyder, head of Deloitte's U.S. restructuring unit. If oil prices, which closed at $39.79 a barrel Wednesday, remain at around $40 a barrel this year, "that's fairly catastrophic." While U.S. oil prices have rebounded from their February low of $26.21 , they remain down about 35% from last year's highs amid a global glut of supply and continuing strong production. The labeling of more loans as troubled started late last year with a push by the Office of the Comptroller of the Currency to get banks to be tougher in evaluating which oil and gas loans are likely to pay out. Earlier this month, the OCC published an updated manual for energy lending that establishes stricter guidelines for loans tied to future oil-and-gas production. One guideline banks use to classify loans as "substandard and worse" is if the creditor has debt generally more than four times greater than operating income, before depreciation and amortization expense. That high a ratio was rare when crude prices began to plunge in 2014 but will be the average across the sector by the end of the year, estimates energy investment bank Tudor, Pickering, Holt & Co. The updated manual follows a series of calls in recent weeks between the OCC and banks around energy lending guidelines, people familiar with the calls said. Many of the souring energy loans are revolving-credit facilities, backed by future barrels of oil and gas, which are typically used by companies for short-term needs. Usually, around a half dozen banks share the risk on the "revolvers," reducing exposure. Although some bank loans may be replaced by debt from hedge funds or private equity, many of those firms will invest with an eye toward eventually taking over assets, said bankers and potential buyers. The prices being discussed include a discount to the loan value in the range of 65 to 90 cents on the dollar, potential buyers said. Global oil-and-gas sector debt totaled $3 trillion in 2014, three times what it was at the end of 2006, according to the most recent figures from the Bank for International Settlements, a central-banking group based in Switzerland. The oil-price plunge has worsened the financial picture for energy borrowers and lenders around the world because it directly affects the value of oil reserves and other assets backing some of the debt. The situation is particularly acute in the U.S., where many small and midsize companies borrowed heavily to expand during the shale boom and are now weighed down with debt as low oil and gas prices have made their assets unprofitable to produce. Regional banks that lent heavily to energy companies have the most concentrated exposure. While the biggest U.S. banks have already set aside hundreds of millions of dollars for potential losses, their lending to the sector is a smaller part of their overall business. About 1.5% to 3% of the loan portfolios of Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo were outstanding to the oil-and-gas sector in January, according to Goldman Sachs Group Inc. and Evercore ISI. "I'm not worried about it bringing the industry down," said Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., in an interview. "We may have a bank failure but it should be one-off." However, the lending shakeout could be significant for U.S. oil-and-gas producers, which face a biannual review by banks of their reserves that is widely expected to curtail their revolving credit lines. That credit, which has been critical for capital flexibility in the downturn, may be cut 20% to 30%, analysts said. James J. Volker, chief executive of Whiting Petroleum Corp., one of the biggest producers in North Dakota's Bakken formation, said at a Denver conference this month that he expected the company's credit line to be reduced by $1 billion, or more than a third. Still, he said he was optimistic Whiting would weather the storm, adding that the company was "well within" all of its covenants with lenders. "Time is on our side at Whiting," Mr. Volker said. "We have over 6,000 drilling locations in the Williston basin...so basically a large treasure trove, if you will, of locations to drill." When Oasis Petroleum Inc., Denbury Resources Inc. and Clayton Williams Energy Inc. asked for amendments to their loans in recent weeks, banks negotiated "anti-cash-hoarding" provisions requiring the companies to use extra cash to repay the balance on their credit lines in exchange, according to regulatory filings. The trend follows a spate of oil-and-gas borrowers maxing out credit lines, in some cases weeks before they warned they may not be able to continue operating. Clayton Williams Energy secured an amendment to its credit line earlier this month that eased caps on indebtedness, before borrowing $350 million from asset-management firm Ares Management LP and others. In exchange, the company agreed to use any available cash in excess of $30 million to pay down its credit line, led by J.P. Morgan. The credit facility was reduced to $100 million from $450 million. But the loan has an interest rate of 12.5%, about four times the prevailing interest. It also came with the right to buy more than two million shares of Clayton Williams and appoint two people to the company's board. A spokeswoman for Clayton Williams declined to comment. Erin Ailworth, Rachel Louise Ensign and Selina Williams contributed to this article. Write to Bradley Olson at Bradley.Olson@wsj.com , Emily Glazer at emily.glazer@wsj.com and Matt Jarzemsky at matthew.jarzemsky@wsj.com Credit: By Bradley Olson, Emily Glazer and Matt Jarzemsky
Subject: Bankruptcy; Petroleum industry; Loans; Regional banks; Lines of credit; Crude oil prices; Energy industry; Natural gas utilities
Location: United States--US
Company / organization: Name: Comerica Inc; NAICS: 522110, 551111; Name: Tudor Pickering Holt & Co LLC; NAICS: 523110; Name: Wells Fargo & Co; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775448439
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775448439?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Latium Group in Talks About Emerald Oil Bid; British businessman and rugby club owner Brian Kennedy's Latium Group is in talks about leading the bidding at a bankruptcy auction of Emerald Oil Inc., which develops oil and gas wells in North Dakota.
Author: Brickley, Peg
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
In court papers, Emerald blamed its financial woes on the same steep decline in oil and gas prices that meant bankruptcy for, among others, Magnum Hunter Resources Corp., Swift Energy Co., American Eagle Energy Corp., Quicksilver Resources Inc., Saratoga Resources Inc., Sabine Oil & Gas Corp., Energy and Exploration Partners LLC and Samson Resources Corp. The commodity price drop not only slashed revenues from oil and gas that was produced, but it also chopped into the value of reserves, particularly undeveloped reserves.\n
Full text: British businessman and rugby club owner Brian Kennedy's Latium Group is in talks about leading the bidding at a bankruptcy auction of Emerald Oil Inc., which develops oil and gas wells in North Dakota. Emerald filed for chapter 11 protection Tuesday night, the latest in a long string of oil and gas companies to crumble in the face of low oil prices. Court papers say Latium Group and Emerald signed a nonbinding term sheet for a deal that could set the pace for a bankruptcy competition over the business. "The Latium transaction would allow the business to continue to operate and would provide a sound path for potential recovery for company stakeholders," McAndrew Rudisill, Emerald's president and chief executive, said in a statement. The deal in the works would allow Mr. Kennedy to enter a new industry, following previous deals that has seen the owner of the Sale Sharks Rugby Union Club buy and sell businesses in the home-improvement and renewable energy sectors, among others. The Scotland-born businessman's previous connection to the Great Plains states was in the role of Barkeep Fitzpatrick in "The Homesman," which portrays the harsh reality of frontier life. He helped finance and produce the film, allowing him to make his screen debut in a speaking role opposite Tommy Lee Jones. "Life is short. Seize the moment and the opportunities," he said Wednesday in an interview. Right now, that means operations like Emerald's, which have been swept up in the widespread distress in the energy sector. "We are in renewable energy, but we saw the oil prices coming down, and we thought this would be a good opportunity," Mr. Kennedy said. Oil prices may never rebound to the $100-per-barrel level, he said, though he believes they will recover from the current lows. When that happens, he said there will be profit in owning proven energy reserves with operating wells that cost $7 million to build but much less to buy at a bankruptcy auction. "We're paying for the oil in the ground at today's value," he said. "We will have a cash-positive business provided we don't load it up with a lot of debt, cost and professional fees." But while Latium works toward "moving on a commodity at the right time, when the price is low," as Mr. Kennedy says, Emerald, the target, doesn't have much time. Existing lenders that have offered to finance Emerald's bankruptcy are demanding that the business be sold by July 22, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Del. The chapter 11 filing followed a long and fruitless effort to find new financing or reach a deal with creditors, according to court papers. Based in Denver, the independent exploration and production company acquires acreage and develops wells in the Williston Basin of North Dakota. Only about a quarter of the rigs in the once-booming area are operating today compared with a year ago, according to a filing by Emerald chief financial officer Ryan Smith. In court papers, Emerald blamed its financial woes on the same steep decline in oil and gas prices that meant bankruptcy for, among others, Magnum Hunter Resources Corp., Swift Energy Co., American Eagle Energy Corp., Quicksilver Resources Inc., Saratoga Resources Inc., Sabine Oil & Gas Corp., Energy and Exploration Partners LLC and Samson Resources Corp. The commodity price drop not only slashed revenues from oil and gas that was produced, but it also chopped into the value of reserves, particularly undeveloped reserves. Emerald filed for bankruptcy protection "rather than remaining under the constant threat of impending creditor remedies while hoping for an immediate turnaround in both the global commodities and capital markets," Mr. Smith wrote in court papers. As of Dec. 31, 2015, Emerald estimated its assets were worth about $291 million, a figure that includes only $28 million in current assets, Mr. Smith wrote. Liabilities add up to about $337 million, including funded debt of about $260.5 million. Emerald owes about $111 million on bank loans and is carrying about $148.5 million in bond debt, court papers say. The company also has nearly $5 million worth of responsibility for closing off shut down operations to avoid environmental damage, according to court papers. http://www.emeraldoil.com http://www.latiumenterprises.com Write to Peg Brickley at peg.brickley@wsj.com Credit: By Peg Brickley
Subject: Bankruptcy; Oil reserves; Petroleum industry; Prices; Renewable resources; Energy industry; Natural gas utilities; Natural gas reserves; Rugby
Location: North Dakota
People: Jones, Tommy Lee
Company / organization: Name: Emerald Oil Inc; NAICS: 211111; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775448467
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775448467?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Oil-Rig Count Declines by 15; Gas rigs declined by 3 in the latest week
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs declined in the latest week by three to 92.
Full text: The U.S. oil-rig count fell by 15 to 372 in the latest week, according to Baker Hughes Inc., maintaining a trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the oil industry, has fallen sharply since oil prices began to fall. But it hasn't fallen enough to relieve the global glut of crude. There are now about 71% fewer rigs of all kinds from a peak of 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs declined in the latest week by three to 92. The U.S. offshore-rig count was 28 in the latest week, up one from the previous week and down six from a year earlier. Oil prices pared their losses Thursday after falling sharply when U.S. supply data a day earlier showed swelling stockpiles and stubbornly high production. Concern over growing oil stocks was triggered by U.S. Department of Energy data Wednesday showing U.S. crude supplies climbed by 9.4 million barrels last week, three times as high as the consensus estimate of analysts surveyed by The Wall Street Journal. U.S. production remained above 9 million barrels a day. Recently, U.S. crude oil fell 0.8% to $39.47 a barrel. Write to Ezequiel Minaya at ezequiel.minaya@wsj.com Credit: By Ezequiel Minaya
Subject: Petroleum industry; Oil service industry
Location: United States--US
Company / organization: Name: Department of Energy; NAICS: 926130; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775450218
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775450218?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Iraqi Oil Minister Hands Over Duties to Deputy; Adel Abdul Mahdi suspends participation in cabinet meetings as he asks to resign
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
Mr. Abdul Mahdi's move comes after Iraq, a member of the Organization of the Petroleum Exporting Countries, has said in recent weeks that it was willing to join a deal between members of the group and other major producers to freeze production to bolster oil crude prices.
Full text: Iraqi Oil Minister Adel Abdul Mahdi said Thursday he has suspended his participation in cabinet meetings and asked his deputy to carry out his duties at the ministry, pointing to "chaos" among government ministries. Mr. Abdul Mahdi said on his Facebook page that his decision was aimed at "confronting an atmosphere of anxiety and chaos dominating government ministers" ahead of the coming cabinet reshuffle. He also asked Parliament to vote on his resignation letter, submitted more than six months ago, The minister said he had handed over his responsibilities to Deputy Minister Fayyad Naama in the interim. Iraqi Prime Minister Haider al-Abadi said last month that he plans to curtail corruption by replacing current ministers with technocrats who aren't part of any political group. Iraq, which raised its output to record highs last year , is struggling to cope with plummeting oil prices. The government, which depends on oil sales for 95% of its revenue, has been already forced to cut its spending to 105.8 trillion dinars ($95.6 billion) in the 2016 budget, compared with a spending forecast of 119 trillion dinars in 2015. Mr. Abdul Mahdi's move comes after Iraq, a member of the Organization of the Petroleum Exporting Countries, has said in recent weeks that it was willing to join a deal between members of the group and other major producers to freeze production to bolster oil crude prices. Write to Summer Said at summer.said@wsj.com Credit: By Summer Said
Subject: Petroleum industry
Location: Iraq
People: al-Abadi, Haider
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775510218
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775510218?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Exxon Mobil in Talks to Buy Stake in Big Mozambique Gas Project From Eni SpA; Shows major oil companies are again hunting for deals after energy prices crashed in 2014
Author: Bradley Olson; Dana Mattioli; Shayndi Raice; Olson, Bradley; Mattioli, Dana; Shayndi Raice
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Mar 2016: n/a.
Abstract:
Exxon Mobil Corp. is in advanced talks to acquire a stake in a giant Mozambique natural gas development project from Italy's Eni SpA, a sign that major oil companies are again hunting for deals after energy prices crashed in 2014.
Full text: Exxon Mobil Corp. is in advanced talks to acquire a stake in a giant Mozambique natural gas development project from Italy's Eni SpA, a sign that major oil companies are again hunting for deals after energy prices crashed in 2014. The acquisition could be announced in coming weeks, according to people familiar with the matter. Terms of the deal aren't clear, but one person indicated Exxon is in talks to buy a stake of around 20% from Eni, which owns 50% of the development. As with all discussions over deals, timing could slip, talks could fall apart at the last minute or the size of the stake could change. Any such purchase likely would be a drop in the bucket for Exxon, which has a market value of around $350 billion. A 20% stake in the concession sold for more than $4 billion in 2013, before energy prices tumbled. The Mozambique Area 4 offshore development is expected to become a major global supplier of liquefied natural gas. Eni has said Area 4 may hold 85 trillion cubic feet of gas. The Italian company estimates it may hold enough gas to meet U.S. residential consumption for nearly two decades. For Exxon, the assets would represent an important move toward adding to oil and gas reserves with acquisitions during the downturn in oil prices, a step many analysts have estimated it would take as prices fell. Last year, the Irving, Texas-based company was only able to replace about two-thirds of the oil and natural gas it produced , the first time that has happened in 22 years. The Mozambique project involves separate giant natural gas discoveries in the Indian Ocean that a host of companies want to exploit. Eni and Anadarko Petroleum Corp. made the original discoveries in the area and agreed last year to coordinate development that is likely to cost in the tens of billions of dollars. Anadarko owns a 26.5% working interest in Area 1, which is a separate tract not included in the Eni deal under discussion with Exxon Mobil. Area 1 could hold as much as 75 trillion cubic feet of gas. Partners there include Japan's Mitsui & Co. Anadarko isn't a partner in Area 4. The projects come at a difficult time for Anadarko and Eni. As oil and gas prices have plunged, Anadarko has said it would cut spending by almost half, complicating its ability to advance the Mozambique development . Both companies have yet to make a final investment decision on the project. It is unclear how a potential Eni stake sale would impact the funding picture for Anadarko. The backing of Exxon, which has a AAA credit rating and recently sold $12 billion in bonds to build its acquisition war chest, could be a lifeline for Eni as it seeks to make the discovery viable. Exxon is said to have an interest in becoming an operator in the development, people familiar with the matter said. Energy deal making has been relatively muted because of the downturn in oil and gas prices . The largest energy deal so far this year is TransCanada Corp.'s agreement to buy Columbia Pipeline Group Inc. for $10.2 billion. Eric Sylvers contributed to this article. Write to Bradley Olson at Bradley.Olson@wsj.com , Dana Mattioli at dana.mattioli@wsj.com and Shayndi Raice at shayndi.raice@wsj.com Credit: By Bradley Olson, Dana Mattioli and Shayndi Raice
Subject: Natural gas reserves; Equity stake; Natural gas; Oil reserves; Petroleum industry
Location: Italy
Company / organization: Name: Eni SpA; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775510583
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775510583?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Stocks Stumble For Second Day; Price of Oil Slips
Author: Vaishampayan, Saumya
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Mar 2016: C.4.
Abstract:
Recent upbeat comments on the U.S. economy from Federal Reserve officials lifted the greenback, as did remarks Wednesday by St. Louis Federal Reserve Bank President James Bullard suggesting that an interest-rate increase in April remains a possibility.
Full text: U.S. stocks sputtered, further crimping a rally that had carried major indexes to their highest levels since December. The size of daily swings has diminished in recent sessions. The S&P 500 moved less than 1% for the eighth session in a row Wednesday, its longest such streak since August. "People are just emotionally spent," said Larry Peruzzi, managing director of international equity trading at Mischler Financial. "It's been a roller coaster, and now everybody is catching their breath and figuring out what the next move is here." On Wednesday, the Dow Jones Industrial Average lost 79.98 points, or 0.5%, to 17502.59. The S&P 500 fell 13.09, or 0.6%, to 2036.71 -- dropping back into negative territory for the year -- and the Nasdaq Composite lost 52.80, or 1.1%, to 4768.86. Even with the two-day pullback, the Dow industrials and S&P 500 have advanced more than 11% since their 2016 lows on Feb. 11. "It has been a fairly significant rebound," said Jim Dunigan, chief investment officer at PNC Wealth Management. "The picture has improved from an economic backdrop standpoint . . . but not enough necessarily to suggest that we can propel the rally from here." Few major economic or corporate events are scheduled this week, while several markets will be closed for the Good Friday holiday. Energy stocks led the S&P 500 lower, falling 2.1% as oil prices fell. U.S. crude oil tumbled 4% to $39.79 a barrel as U.S. government data confirmed a large rise in crude stockpiles, adding to the global glut of oil. The first quarter now has the most daily drops of at least 2% in the front-month Nymex crude contract since the first quarter of 2009. The dollar continued to gain against the euro and yen, recovering from last week's selloff. The euro fell 0.3% against the dollar to $1.1182. The pound, which fell sharply on Tuesday, extended its declines against the dollar; sterling declined 0.6% to $1.4117. Recent upbeat comments on the U.S. economy from Federal Reserve officials lifted the greenback, as did remarks Wednesday by St. Louis Federal Reserve Bank President James Bullard suggesting that an interest-rate increase in April remains a possibility. The yield on the 10-year Treasury note fell to 1.873%, from 1.935% on Tuesday, as prices rose. Gold fell 2% to $1,223.70 an ounce. Overseas, the Stoxx Europe 600 fell 0.1%. Stocks were down in the Asia/Pacific region early Thursday. The Shanghai Composite was down 1.1%, Australia's S&P ASX 200 was down 1.2%, Hong Kong's Hang Seng Index was down 0.8%, South Korea's Kospi was off 0.4% and Japan's Nikkei was down 0.3%. Credit: By Saumya Vaishampayan
Subject: Stock prices; Dow Jones averages; Daily markets (wsj)
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 24, 2016
column: Wednesday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775703125
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775703125?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Cnooc Seeks Solace at Home --- Chinese oil firm shifts its focus after years of heavy investment in expansion abroad
Author: Spegele, Brian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Mar 2016: B.2.
Abstract:
[...]Cnooc said its oil-and-gas production would likely shrink this year, marking its first annual decline since before it listed in 2001.
Full text: BEIJING -- After more than a decade of empire building in Canada, Africa and beyond, Chinese offshore oil-and-gas company Cnooc Ltd. is refocusing on its home front. China's third-largest producer of oil and gas on Thursday posted its weakest annual earnings in more than 10 years, hurt by a faltering array of overseas projects and low oil prices that show little sign of a quick recovery. In response, Chairman Yang Hua said state-controlled Cnooc is turning its attention to China after years of heavy spending to develop a global presence and tap unconventional energy reserves, such as the tar-like oil sands of Canada. "In the area of exploration, we will prioritize exploration work offshore China," Mr. Yang said in the earnings statement. Cnooc's new focus on core offshore operations at home follows years of struggles to increase production abroad, and underlines its desire to be the most aggressive cost-cutter among China's oil giants. The challenges have been most evident in Canada, where Cnooc bought oil-sands producer Nexen in 2013 for $15 billion. The company has struggled with cost overruns and limited production there, as well as an oil spill and workers' deaths that have drawn regulatory scrutiny. Executives said Thursday that after a January explosion that killed two workers at the company's Long Lake oil-sands project in northern Alberta, it had cut production there to one-third of its original 50,000 barrel-a-day capacity during an investigation of the blast. In a briefing with reporters, Mr. Yang emphasized operational safety, saying Cnooc's efforts over the past few years to raise efficiency were succeeding "but safety absolutely cannot be slackened." Cnooc said in its earnings report that its overseas oil-and-gas production rose 5% last year to 172.3 million barrels of oil equivalent, lagging behind production growth of about 20% at home. Output in Canada fell 14%, the company said. Much of the domestic growth came from oil-and-gas blocks in the Bohai Bay, off China's northeast coast, and in the South China Sea. Analysts said such domestic projects were among the more profitable in Cnooc's portfolio. The company said operating expenses for its Chinese operations were about $8 per barrel of oil equivalent last year, compared with nearly $13 for overseas projects. Cnooc said its net profit in 2015 slumped 66% to 20.25 billion yuan ($3.11 billion), its worst tally since 2004. The results, however, beat the 18.1 billion yuan average forecast of analysts polled by S&P Global Market Intelligence. The company responded to the oil-price drop by pledging to cut capital spending by more than 10% this year. As a result, Cnooc said its oil-and-gas production would likely shrink this year, marking its first annual decline since before it listed in 2001. The steep drop in crude prices has hurt the bottom lines of oil producers world-wide, in particular China's state-owned oil companies that tend to be less efficient than their global peers. PetroChina Co., China's largest oil company by production, said on Wednesday that its 2015 profit plummeted 67%. However, Cnooc's setbacks best illustrate the complications Chinese oil companies have faced overseas, particularly as many scooped up assets in expensive deals when oil prices were near their peak a few years ago. Those challenges will persist if oil prices continue to hover around $40 a barrel. Credit: By Brian Spegele
Subject: Petroleum industry; Oil reserves; Corporate profits; Energy economics; Capital expenditures; Offshore; Crude oil prices; Oil sands
Location: China Africa Canada
Company / organization: Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: Mar 25, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775581583
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775581583?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Rep roduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Bad Loans Hit the Oil Patch
Author: Olson, Bradley; Glazer, Emily; Jarzemsky, Matt
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Mar 2016: A.1.
Abstract:
About 175 companies are at high risk of not being able to meet financial stipulations in their loan agreements, according to Deloitte LLP. Since the start of last year, 51 North American oil-and-gas producers have filed for bankruptcy, cases totaling $17.4 billion in cumulative debt, according to law firm Haynes and Boone LLP.
Full text: Bad loans in the U.S. oil patch are on pace to soon outnumber good ones, an indication of the pressure on energy companies and their lenders from the crash in prices. The number of energy loans labeled as "classified," or in danger of default, is on course to extend above 50% this year at several major banks, including Wells Fargo & Co. and Comerica Inc., according to bankers and others in the industry. In response, several major banks are reducing their exposure to the energy sector by attempting to sell off souring loans, declining to renew them or clamping down on the ability of oil and gas companies to tap credit lines for cash, according to more than a dozen bankers, lawyers and others familiar with the plans. The pullback is curtailing the flow of money to companies struggling to survive a prolonged stretch of low prices, likely quickening the path to bankruptcy for some firms. About 175 companies are at high risk of not being able to meet financial stipulations in their loan agreements, according to Deloitte LLP. Since the start of last year, 51 North American oil-and-gas producers have filed for bankruptcy, cases totaling $17.4 billion in cumulative debt, according to law firm Haynes and Boone LLP. That trails the number from September 2008 to December 2009 during the global financial crisis, when there were 62 filings of oil and gas producers, but it is expected to grow. "This has the makings of a gigantic funding crisis" for energy companies, said William Snyder, head of Deloitte's U.S. restructuring unit. If oil prices, which closed at $39.46 a barrel Thursday, remain at around $40 a barrel this year, "that's fairly catastrophic." While U.S. oil prices have rebounded from their February low of $26.21, they remain down about 36% from last year's highs amid a global glut of supply. Since late last year, regulators have been leaning on banks to be tougher in their labeling of bad loans. That has also been a factor in driving up the rate of troubled debt, bankers said. Earlier this month, the Office of the Comptroller of the Currency published an updated manual for energy lending that establishes stricter guidelines for loans tied to future oil-and-gas production. One guideline banks use to classify loans as "substandard and worse" is if the creditor has debt generally more than four times greater than operating income, before depreciation and amortization expense. That high a ratio was rare when crude prices began to plunge in 2014 but will be the average across the sector by the end of the year, estimates energy investment bank Tudor, Pickering, Holt & Co. The updated manual follows a series of calls in recent weeks between the OCC and banks around energy lending guidelines, people familiar with the calls said. Many of the souring energy loans are revolving-credit facilities, backed by future barrels of oil and gas, which are typically used by companies for short-term needs. Usually, around a half dozen banks share the risk on the "revolvers," reducing exposure. But as oil prices remain low there is less profitable work the energy firms can do, which makes their loans riskier for the banks who must hold more capital against them. Although some bank loans may be replaced by debt from hedge funds or private equity, many of those who step in to fill the void left by banks will do so seeking more control over the companies with an eye toward taking over if the companies aren't able to turn things around. That's different from banks, which were key enablers of drillers in recent years, and have worked to keep companies afloat and avoid foreclosure. The prices being discussed include a discount to the loan value in the range of 65 to 90 cents on the dollar, potential buyers said. Global oil-and-gas sector debt totaled $3 trillion in 2014, three times what it was at the end of 2006, according to the most recent figures from the Bank for International Settlements, a central-banking group based in Switzerland. The oil-price plunge has worsened the financial picture for energy borrowers and lenders around the world because it directly affects the value of oil reserves and other assets backing some of the debt. The situation is particularly acute in the U.S., where many small and midsize companies borrowed heavily to expand during the shale boom and are now weighed down with debt as low oil and gas prices have made their assets unprofitable to produce. Regional banks that lent to energy companies have the most concentrated exposure. While the biggest U.S. banks have already set aside hundreds of millions of dollars for potential losses, their lending to the sector is a smaller part of their overall business. About 1.5% to 3% of the loan portfolios of Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo were outstanding to the oil-and-gas sector in January, according to Goldman Sachs Group Inc. and Evercore ISI. "I'm not worried about it bringing the industry down," said Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., in an interview. "We may have a bank failure but it should be one-off." However, the lending shakeout could be significant for U.S. oil-and-gas producers, which face a biannual review by banks of their reserves that is widely expected to curtail their revolving credit lines. That credit, which has been critical for capital flexibility in the downturn, may be cut 20% to 30%, analysts said. James J. Volker, chief executive of Whiting Petroleum Corp., one of the biggest producers in North Dakota's Bakken formation, said at a Denver conference this month that he expected the company's credit line to be reduced by $1 billion, or more than a third. Still, he said he was optimistic Whiting would weather the storm, adding that the company was "well within" the rules established by its lenders. "We have over 6,000 drilling locations in the Williston basin . . . so basically a large treasure trove, if you will, of locations to drill," Mr. Volker said. --- Erin Ailworth, Rachel Louise Ensign and Selina Williams contributed to this article. Credit: By Bradley Olson, Emily Glazer and Matt Jarzemsky
Subject: Crude oil prices; Nonperforming loans; Default; Bankruptcy; Petroleum industry; Bank loans
Location: United States--US
Classification: 3100: Capital & debt management; 8510: Petroleum industry; 9190: United States; 8100: Financial services industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Mar 25, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775708271
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775708271?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Exxon Explores Taking Stake in Gas Project
Author: Bradley Olson; Dana Mattioli; Shayndi Raice; Olson, Bradley; Mattioli, Dana; Shayndi Raice
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Mar 2016: B.3.
Abstract:
Exxon Mobil Corp. is in advanced talks to acquire a stake in a large Mozambique natural-gas project from Italy's Eni SpA, a sign that major oil companies are again hunting for deals after energy prices crashed in 2014.
Full text: Exxon Mobil Corp. is in advanced talks to acquire a stake in a large Mozambique natural-gas project from Italy's Eni SpA, a sign that major oil companies are again hunting for deals after energy prices crashed in 2014. The acquisition could be announced in coming weeks, according to people familiar with the matter. Terms of the deal aren't clear, but one person indicated Exxon is in talks to buy a stake of around 20% from Eni, which owns 50% of the development. As with all discussions over deals, timing could slip, talks could fall apart at the last minute or the size of the stake could change. A 20% stake in the concession sold for more than $4 billion in 2013, before energy prices tumbled, would be a drop in the bucket for Exxon, which has a market value of around $350 billion. The Mozambique Area 4 offshore development is expected to become a major global supplier of liquefied natural gas. Eni has said Area 4 may hold 85 trillion cubic feet of gas. The Italian company estimates it may hold enough gas to meet U.S. residential consumption for nearly two decades. For Exxon, the assets would represent an important move toward adding to oil-and-gas reserves with acquisitions during the downturn in oil prices, a step many analysts have expected it would take as prices fell. Last year, the Irving, Texas-based company was only able to replace about two-thirds of the oil and natural gas it produced, the first time that has happened in 22 years. The Mozambique project involves separate natural-gas discoveries in the Indian Ocean that a host of companies want to exploit. Eni and Anadarko Petroleum Corp. made the original discoveries in the area and agreed last year to coordinate development that is likely to cost in the tens of billions of dollars. Anadarko owns a 26.5% working interest in Area 1, which is a separate tract not included in the Eni deal under discussion with Exxon Mobil. Area 1 could hold as much as 75 trillion cubic feet of gas. Partners there include Japan's Mitsui & Co. Anadarko isn't a partner in Area 4. The projects come at a difficult time for Anadarko and Eni. As oil and gas prices have plunged, Anadarko has said it would cut spending by almost half, complicating its ability to advance the Mozambique development. Both companies have yet to make a final investment decision on the project. It is unclear how a potential Eni stake sale would impact the funding picture for Anadarko. The backing of Exxon, which has a AAA credit rating and recently sold $12 billion in bonds to build its acquisition war chest, could be a lifeline for Eni as it seeks to make the discovery viable. Exxon is said to have an interest in becoming an operator in the development, people familiar with the matter said. Deal making in the energy industry has been relatively muted because of the downturn in oil and gas prices. The largest energy deal so far this year is TransCanada Corp.'s agreement to buy Columbia Pipeline Group Inc. for $10.2 billion. --- Eric Sylvers contributed to this article. Credit: By Bradley Olson, Dana Mattioli and Shayndi Raice
Subject: Acquisitions & mergers; Equity stake; Petroleum industry; Natural gas; Energy industry
Location: Italy
Company / organization: Name: Eni SpA; NAICS: 324110, 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Mar 25, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775709048
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775709048?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Stocks Snap Five Weeks Of Advances --- Rallies by shares, oil sputter ahead of a long weekend; gold posts 2.6% weekly fall
Author: Kuriloff, Aaron
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Mar 2016: C.4.
Abstract:
Federal Reserve Bank of St. Louis President James Bullard said Thursday that "the next rate increase may not be far off provided that the economy evolves as expected," adding to upbeat comments from Fed officials this week.
Full text: U.S. stocks ended five consecutive weeks of gains, as a rally that carried shares to their highest levels of the year petered out during a holiday-shortened week. The S&P 500 slid back into negative territory for the year, down 0.4%, while the Dow industrials clung to a small gain of 0.5% in a week that included the three lowest-volume trading days of 2016. Many global markets will be closed for Good Friday. The Dow Jones Industrial Average rose 13.14 points, or less than 0.1%, to 17515.73 Thursday, bringing its loss to 0.5% for the week. The S&P 500 declined 0.77, or less than 0.1%, Thursday to 2035.94, for a weekly fall of 0.7%. The Nasdaq Composite gained 4.64, or 0.1%, to 4773.50, shedding 0.5% for the week. U.S. oil prices also snapped a five-week winning streak after rising more than 50% since a low on Feb. 11. Crude fell 4.1% for the week to $39.46 a barrel as data showed U.S. supplies reaching all-time highs and the dollar strengthened. "Oil's tired of running higher and the dollar's tired of running lower, so we're getting this countertrend move that's taking the market with it," said Bob Doll, senior portfolio manager at Nuveen Asset Management. Hints that the Federal Reserve could raise interest rates sooner than expected fueled gains in the dollar. The WSJ Dollar Index, which measures the buck against a basket of 16 currencies, rose 0.1% Thursday to 87.89, its fifth trading day in a row of increases. Federal Reserve Bank of St. Louis President James Bullard said Thursday that "the next rate increase may not be far off provided that the economy evolves as expected," adding to upbeat comments from Fed officials this week. Federal-funds futures, used by investors and traders to bet on central-bank policy, showed a 12% likelihood of a rate increase from the Fed at its April policy meeting, according to data from CME Group. The odds were 2% a month ago. The probability of a rate increase at the Fed's June meeting was 41%, compared with 18% a month ago. U.S. government bonds pulled back Thursday as investors took some chips off the table ahead of a closed market on Friday, with traders saying lackluster volume exaggerated price swings. The yield on the 10-year Treasury note rose to 1.902%, from 1.873% Wednesday and 1.871% last Friday. Bond prices fall as yields rise. Mary Ann Hurley, vice president of trading in Seattle at D.A. Davidson & Co., said investors tilted their positioning toward bonds into "neutral" in case of an "unexpected surprise over the long weekend." Gold fell 2.6% this week to $1,221.40 an ounce. The Stoxx Europe 600 declined 1.5% Thursday. Japan's Nikkei Stock Average fell 0.6% after a summary of opinions from Bank of Japan policy makers showed rising tension over negative rates. Early Friday, the Nikkei was up 0.6%. Stocks in Shanghai fell 1.6% Thursday amid concerns about increased short selling and after Chinese authorities guided the yuan weaker against the dollar in the biggest one-day depreciation since early January. Early Friday, the index was up 0.2%. --- Min Zeng contributed to this article. Credit: By Aaron Kuriloff
Subject: Stock prices; Dow Jones averages; Daily markets (wsj)
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Mar 25, 2016
column: Thursday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775709060
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775709060?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: EIG Drops Bid to Buy Oil Firm Pacific
Author: Gleason, Stephanie
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Mar 2016: B.4.
Abstract:
Investment firm EIG Global Energy Partners has pulled its buyout offer for Pacific Exploration & Production Corp., one of a few possible deals that the Canadian-Colombian oil company was hoping would stave off a bankruptcy filing.
Full text: Investment firm EIG Global Energy Partners has pulled its buyout offer for Pacific Exploration & Production Corp., one of a few possible deals that the Canadian-Colombian oil company was hoping would stave off a bankruptcy filing. Pacific Exploration, which is listed on the Toronto Stock Exchange but has most of its assets in Colombia, has been hit hard by falling oil prices and a lack of new discoveries. EIG Pacific Holdings, the entity formed by Washington, D.C.-based EIG Global to acquire Pacific, said Friday it had ended its offer for $4.1 billion worth of Pacific's senior bonds. The tender offer expired Thursday, and EIG said all tendered bonds have been returned. EIG had offered the bondholders 16 cents on the dollar and had promised an overhaul of Pacific's management and the sale of assets. As Pacific worked to complete the deal with EIG in February, 40% of the bondholders agreed to take no action against the company before March 31, despite a missed interest payment. Bondholders could agree to give Pacific more time to arrange a deal. But as it stands, Pacific is down to only a few days before bondholders can demand immediate payment or force the company to file for bankruptcy protection. Earlier this month, The Wall Street Journal reported that the EIG deal was one of six options the company was considering. The other deals, which included one from Pacific's management and a debt-for-equity swap that would include $500 million in fresh financing, were due Wednesday. A company spokesman declined to comment on EIG's withdrawal or any pending offers. Founded by a trio of Venezuelan and Italian oil and mining executives in 2003, Pacific focused on the Colombia's mineral-rich eastern savanna as the Colombian army pushed insurgents from the region. The company grew to be the country's second largest by revenue. Last year, it pumped an average of 156,000 barrels of oil equivalent a day. But the company's market capitalization has since shrunk to about $200 million, from more than $7 billion dollars in early 2012. In January, the firm said it would skip $66 million in interest payments in the hope it could restructure its $5.4 billion in debt amid collapsing oil prices. EIG and its subsidiary Harbour Energy first approached the company's noteholders in January, offering 17.5 cents on the dollar. EIG later lowered the offer, citing low oil prices and Pacific Exploration's deteriorating financial condition. The investment firm, which has about $14 billion in assets under management, has invested in other energy companies, including Breitburn Energy Partners LP and Chesapeake Energy Corp. --- Anatoly Kurmanaev and Sara Schaefer Munoz contributed to this article. Credit: By Stephanie Gleason
Subject: Acquisitions & mergers; Petroleum industry
Location: Canada
Company / organization: Name: EIG Global Energy Partners; NAICS: 523910; Name: Pacific Exploration & Production Corp; NAICS: 211111
Classification: 8510: Petroleum industry; 9172: Canada
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Mar 26, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778087529
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778087529?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Want to Bet on Oil Companies? It's All About the ZIP Code; Bonds of companies with low credit ratings have held up best for producers in west Texas and Canada
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Mar 2016: n/a.
Abstract:
In south Texas, the difference between wells with initial flows greater than the equivalent of 800 barrels of oil a day, compared with those that produce less than 600 barrels a day, is the difference between profits and losses, according to energy consultants RBN Energy LLC. [...]lately, drilling productivity, or lack of it, had been masked by high prices.
Full text: For energy investors, it is all about location, location, location. That is the message that emerges in the prices of bonds of oil-and-gas companies operating across North America. Bonds of companies with below-investment-grade credit ratings, or junk bonds, have held up best for producers in west Texas, Canada and parts of Oklahoma, as producers in those regions have proven relatively resilient to low commodity prices, according to data from Citi Research, part of Citigroup Inc. Meanwhile, bond prices of producers operating in east Texas, North Dakota and the Gulf of Mexico have dipped to distressed levels, indicating bond investors--focused on a company's financial strength--aren't keen on drilling properties in those areas. The are a few reasons for the divergence, including terrain and the costs of transporting oil and gas to market. But the biggest factor is simply how much fuel is yielded by wells in certain areas, versus other areas for relatively similar costs. In south Texas, the difference between wells with initial flows greater than the equivalent of 800 barrels of oil a day, compared with those that produce less than 600 barrels a day, is the difference between profits and losses, according to energy consultants RBN Energy LLC. Until lately, drilling productivity, or lack of it, had been masked by high prices. "When crude was at $100 it didn't matter," said RBN President Rusty Braziel. "Everything was good at $100." At around $40 a barrel, though, it is a lot harder to cover costs. The sharp decline in prices since mid-2014 has forced producers to drill only their best prospects. With many investors and energy executives expecting prices to remain at these levels for some time, companies that can't profit drilling their best properties aren't being given strong odds of survival by debt investors. Consider east Texas, which Citi defines to include the Haynesville, Bossier and Barnett shales. The unweighted average price for the longest-dated unsecured junk bonds of companies with primary operations there has plummeted to less than 12 cents on the dollar, the bank said. Goodrich Petroleum Corp., which drills mostly in the region and has bonds that trade at around 1 cent on the dollar, said earlier this month it expects to report a large loss for 2015 after writing down the value of its assets and that its auditors are likely to express substantial doubt about its ability to stay in business. It is a different story on the other side of the state. Companies drilling in the Permian Basin in west Texas have been among the industry's best performing, with stocks that have risen in some cases throughout the downturn. Several layers of oil- and gas-bearing rock are stacked in the Permian, giving producers more chances to hit pay dirt from each well. Meanwhile, these producers reap the same savings on drilling and supplies--which have fallen with oil prices--as competitors in other areas. The low costs, combined with individual wells that produce the equivalent of thousands of barrels of oil a day, result in a profit even at $30 oil for some producers, said Gabriele Sorbara, an analyst with Topeka Capital Markets. Citi's data peg the Permian as the most-profitable drilling area in North America, and average bond prices have held steady at about 80 cents on the dollar. To be sure, there is wide variance within the Permian. Diamondback Energy Inc.'s bonds trade at a premium to their issue price, yet debt sold by Approach Resources Inc., which drills one county south of Diamondback, trades at a big discount to face value. Varied fortunes such as those can be found within many drilling regions, said Citi credit analyst Marisa Moss. "Even in good areas, it's very county-by-county." Mr. Braziel's RBN Energy studied the Eagle Ford Shale in south Texas--where bond prices average about 50 cents on the dollar by Citi's methodology--examining production data and financial returns on individual wells. RBN found that a narrow band of land where wells produce initial flows greater than the equivalent of 800 barrels of oil a day are generally profitable at $38 a barrel. But just outside that area, wells likely won't produce enough to justify drilling at current prices, Mr. Braziel said. "It's the difference between having a bond yield of 8% versus 80%," he said. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Petroleum industry; Prices; Profits; Cost control; Natural gas utilities
Location: Canada Oklahoma Texas Gulf of Mexico North Dakota North America
Company / organization: Name: Goodrich Petroleum Corp; NAICS: 211111; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 27, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775918338
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775918338?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Firms Slow Exploration to Weather Low-Price Era; Major energy companies combined replaced 75% of their production in 2015
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Mar 2016: n/a.
Abstract:
In 2015, the seven biggest publicly traded Western energy companies, including Exxon Mobil Corp. and Royal Dutch Shell PLC, replaced just 75% of the oil and natural gas they pumped, on average, according to a Wall Street Journal analysis of company data. [...]those investments helped to fuel today's market glut. Because of accounting rules, there is another drain on the "proved reserves" that companies book and report to investors: low oil prices.
Full text: LONDON--The world's biggest oil companies are draining their petroleum reserves faster than they are replacing them--a symptom of how a deep oil-price decline is reshaping the energy industry's priorities. In 2015, the seven biggest publicly traded Western energy companies, including Exxon Mobil Corp. and Royal Dutch Shell PLC, replaced just 75% of the oil and natural gas they pumped, on average, according to a Wall Street Journal analysis of company data. It was the biggest combined drop in inventory that companies have reported in at least a decade. For Exxon, 2015 marked the first time in more than two decades it didn't fully replace production with new reserves, according to the company. It reported replacing 67% of its 2015 output. In the past, shrinking reserves could send investors and executives into a panic over a company's future prospects. These days, with ultralow oil prices , "it becomes less important" to replenish stockpiles, said Luca Bertelli, chief exploration officer at Italian oil producer Eni SpA. Eni has shifted spending away from high-risk, high-reward projects in favor of squeezing more out of fields that are already producing, he said. Related * Many Shale Companies Are Unable to Ramp Up Oil Output * Oil Loses Its Clout on U.K. Stock Index * Giant Indonesia Offshore Gas Project Sunk by Nationalist, Economic Pressure * Coming to the Oil Patch: Bad Loans to Outnumber the Good That shift shows how producers are responding to low prices by pulling back on new exploration in favor of maximizing profits. The risk is that cutting back on new projects now, when prices are low, could lead to shortages and price spikes in the future. Historically, energy companies spent heavily in the present to find resources for the future--new wells that would replace the barrels they pump every day. When they decide they can extract the oil and gas economically, firms book those resources as proved reserves, untapped inventories to be exploited at a profit down the road. The current oil glut has forced companies to cut spending wherever they can. So they have pulled back on exploratory drilling and spending on new projects. Across the oil sector last year, companies approved just six new developments, according to Morgan Stanley researchers. That is in contrast to the past decade, when high prices led energy firms to explore in far-flung regions. They spent billions of dollars on so-called megaprojects, in part to keep their inventories brimming for decades. And those investments helped to fuel today's market glut. Because of accounting rules, there is another drain on the "proved reserves" that companies book and report to investors: low oil prices. The U.S. Securities and Exchange Commission defines proved reserves as the volume of oil and natural gas that a company can expect to tap at a profit. Some of the reserves companies added are too expensive to extract profitably at today's prices. That has forced some companies to remove barrels from their books, and in some cases to write down the value of those assets. Shell wrote off billions of dollars from the value of its assets last year, and low prices contributed to a decision to cancel a project in Canada's high-cost oil sands. The company didn't replace any of the oil it pumped last year. Overall its reserves shrank by 20%. Despite lower reserves, big oil companies aren't about to run out of crude. Exxon, for instance, retains enough reserves to last 16 years at the current rate of production. And in addition to their still-considerable proved reserves, the companies have access to other resources that could become viable to pump if oil prices rise. Exxon Chief Executive Rex Tillerson told analysts earlier this month the company's failure to fully replace the oil and gas it produced last year reflects its focus on "deploying capital efficiently to create that long-term shareholder value, even if it means interrupting a 21-year trend." SEC rules require oil companies to report "proved" reserves based on an average price each year. On a year-to-year basis, proved reserves can be volatile based on oil-price swings. Last year's sharp price drop forced some companies to reduce their proved reserves, though falling costs helped offset the reductions. Some companies' reserves also benefited from contracts that grant them a larger share of production when prices are low. Among the largest oil companies, only Chevron Corp., Eni and France's Total SA last year added more new barrels than they pumped. BP PLC replaced 61% of its production last year--excluding the impact of sales and acquisitions--and Norway's Statoil ASA replaced 55%. While Shell's reserves fell, the company this year completed a roughly $50 billion acquisition of BG Group PLC that is expected to boost reserves by around 25% from their levels at the end of 2014. Companies' reserve volumes are facing other potential threats beyond low oil prices. Some investors have expressed concern recently that legislation to curb global warming--such as taxing carbon emissions--could hasten a shift to cleaner energy and make fossil fuels more expensive to burn. That could make some oil reserves impossible to pump profitably. Oil companies counter that the world will need large volumes of oil and gas for decades. In a sign of their focus on profitability over finding more oil, some investors have welcomed companies' spending cuts despite the falling reserves. "When the house is burning you're not worrying if you need to paint the outside," said Christopher Wheaton, a fund manager at Allianz Global Investors, which holds stock in several of the large oil companies including Shell, Total and BP. "It's crisis management at the moment." That attitude marks a shift from the early 2000s, when companies responded to investor pressure to grow with aggressive drilling and, in some cases, aggressive accounting. Shell in 2004 admitted to overstating its reserves by more than 20%. Its share price dropped, senior executives left, and the company paid hefty fines. Shell declined to comment. In the years after the Shell scandal, companies raced to find more crude and poured tens of billions of dollars into projects to increase production--helping fuel the current glut and prompting Shell to shift its strategy. In 2014 Shell stopped using growth in oil and gas production as a performance metric for executive bonuses, instead emphasizing return on capital. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Oil reserves; Natural gas reserves; Petroleum industry; Corporate profits; Prices; Investments; Inventory; Natural gas; Energy industry
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1775994828
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1775994828?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude Oil Futures Rise in Asia
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2016: n/a.
Abstract: None available.
Full text: 0524 GMT [Dow Jones] Crude oil futures rise in Asia--trade is thin--as investors eye potential output cuts ahead of a producers' meeting next month. Hedge funds have also unwound short positions as the near-term outlook for crude has turned more optimistic, says Gnanasekar Thiagarajan, director of Commtrendz Risk Management. A Morgan Stanley report said Nymex oil prices should continue to find support in the second quarter of 2016. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May rose 34 cents, to $39.80 a barrel in the Globex electronic session. May Brent crude on London's ICE Futures exchange was up 31 cents at $40.75 a barrel. Write to biman.mukherji@wsj.com
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 28, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776044508
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776044508?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.A.E. Banks Offer Debt Lifeline to Struggling Companies; Local lenders will allow SMEs to restructure their loans as low oil prices strain the region's economies
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2016: n/a.
Abstract:
Related News * UAE Energy Minister Sees Global Crude Markets Correcting Before Year-End * Royal Dutch Shell Quits Major UAE Gas Project (Jan. 18, 2016) * Oil Firms Slow Exploration to Weather Low-Price Era "I think what we put today on the table is a mini-insolvency law," said Abdulaziz Al Ghurair, chairman of the U.A.E. Banks Federation.
Full text: DUBAI--Banks in the United Arab Emirates have agreed to give the country's struggling small- to medium-size companies more breathing space to repay their debts as low oil prices strain the region's economies. Under a framework outlined on Monday by one of the country's top bankers, local lenders will allow SMEs experiencing financial difficulties to restructure their loans without facing immediate legal action. SMEs account for about 60% of the U.A.E.'s non-oil economy, according to some estimates. Many of them have been struggling since oil prices started to fall in the middle of 2014, resulting in some clients and governments cutting or deferring payments as regional economies are growing at a slower pace. Related News * UAE Energy Minister Sees Global Crude Markets Correcting Before Year-End * Royal Dutch Shell Quits Major UAE Gas Project (Jan. 18, 2016) * Oil Firms Slow Exploration to Weather Low-Price Era "I think what we put today on the table is a mini-insolvency law," said Abdulaziz Al Ghurair, chairman of the U.A.E. Banks Federation. "That's what really is insolvency: give the customer time and give the customer space as long as he is genuine," he said. He added that the U.A.E. banks are still lobbying the government for the insolvency law to be introduced. The U.A.E. doesn't have a fully-fledged insolvency law and expatriate company owners defaulting on debt in recent years have often fled the country to avoid criminal prosecution. Officials for years have said they're planning to introduce an insolvency law that would include specific bankruptcy provisions but those plans appeared to have been stalled. Mr. Al Ghurair, who also is chief executive of Dubai's Mashreq bank, said not a single member of the banking association which represents 49 lenders active in the U.A.E. opposed the idea, which also received the blessing of the country's central bank. "We want to show the world [that] banks themselves are proactively putting a solution on the table," he said. "This is a moral agreement that all the banks will abide by," he said. The protracted economic slowdown in the region and the fall in commodity prices have sparked an increase in defaults among SMEs, Mr. Al Ghurair said, without being more specific. Write to Nicolas Parasie at nicolas.parasie@wsj.com Credit: By Nicolas Parasie
Subject: Bankruptcy laws; Petroleum industry; Prices; Banks
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 28, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776091865
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776091865?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Firms Slow Exploration to Weather Low-Price Era; Major energy companies combined replaced 75% of their production in 2015
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2016: n/a.
Abstract:
In 2015, the seven biggest publicly traded Western energy companies, including Exxon Mobil Corp. and Royal Dutch Shell PLC, replaced just 75% of the oil and natural gas they pumped, on average, according to a Wall Street Journal analysis of company data. [...]those investments helped to fuel today's market glut. Because of accounting rules, there is another drain on the "proved reserves" that companies book and report to investors: low oil prices.
Full text: LONDON--The world's biggest oil companies are draining their petroleum reserves faster than they are replacing them--a symptom of how a deep oil-price decline is reshaping the energy industry's priorities. In 2015, the seven biggest publicly traded Western energy companies, including Exxon Mobil Corp. and Royal Dutch Shell PLC, replaced just 75% of the oil and natural gas they pumped, on average, according to a Wall Street Journal analysis of company data. It was the biggest combined drop in inventory that companies have reported in at least a decade. For Exxon, 2015 marked the first time in more than two decades it didn't fully replace production with new reserves, according to the company. It reported replacing 67% of its 2015 output. In the past, shrinking reserves could send investors and executives into a panic over a company's future prospects. These days, with ultralow oil prices , "it becomes less important" to replenish stockpiles, said Luca Bertelli, chief exploration officer at Italian oil producer Eni SpA. Eni has shifted spending away from high-risk, high-reward projects in favor of squeezing more out of fields that are already producing, he said. Related * Many Shale Companies Are Unable to Ramp Up Oil Output * Oil Loses Its Clout on U.K. Stock Index * Giant Indonesia Offshore Gas Project Sunk by Nationalist, Economic Pressure * Coming to the Oil Patch: Bad Loans to Outnumber the Good That shift shows how producers are responding to low prices by pulling back on new exploration in favor of maximizing profits. The risk is that cutting back on new projects now, when prices are low, could lead to shortages and price spikes in the future. Historically, energy companies spent heavily in the present to find resources for the future--new wells that would replace the barrels they pump every day. When they decide they can extract the oil and gas economically, firms book those resources as proved reserves, untapped inventories to be exploited at a profit down the road. The current oil glut has forced companies to cut spending wherever they can. So they have pulled back on exploratory drilling and spending on new projects. Across the oil sector last year, companies approved just six new developments, according to Morgan Stanley researchers. That is in contrast to the past decade, when high prices led energy firms to explore in far-flung regions. They spent billions of dollars on so-called megaprojects, in part to keep their inventories brimming for decades. And those investments helped to fuel today's market glut. Because of accounting rules, there is another drain on the "proved reserves" that companies book and report to investors: low oil prices. The U.S. Securities and Exchange Commission defines proved reserves as the volume of oil and natural gas that a company can expect to tap at a profit. Some of the reserves companies added are too expensive to extract profitably at today's prices. That has forced some companies to remove barrels from their books, and in some cases to write down the value of those assets. Shell wrote off billions of dollars from the value of its assets last year, and low prices contributed to a decision to cancel a project in Canada's high-cost oil sands. The company didn't replace any of the oil it pumped last year. Overall its reserves shrank by 20%. Despite lower reserves, big oil companies aren't about to run out of crude. Exxon, for instance, retains enough reserves to last 16 years at the current rate of production. And in addition to their still-considerable proved reserves, the companies have access to other resources that could become viable to pump if oil prices rise. Exxon Chief Executive Rex Tillerson told analysts earlier this month the company's failure to fully replace the oil and gas it produced last year reflects its focus on "deploying capital efficiently to create that long-term shareholder value, even if it means interrupting a 21-year trend." SEC rules require oil companies to report "proved" reserves based on an average price each year. On a year-to-year basis, proved reserves can be volatile based on oil-price swings. Last year's sharp price drop forced some companies to reduce their proved reserves, though falling costs helped offset the reductions. Some companies' reserves also benefited from contracts that grant them a larger share of production when prices are low. Among the largest oil companies, only Chevron Corp., Eni and France's Total SA last year added more new barrels than they pumped. BP PLC replaced 61% of its production last year--excluding the impact of sales and acquisitions--and Norway's Statoil ASA replaced 55%. While Shell's reserves fell, the company this year completed a roughly $50 billion acquisition of BG Group PLC that is expected to boost reserves by around 25% from their levels at the end of 2014. Companies' reserve volumes are facing other potential threats beyond low oil prices. Some investors have expressed concern recently that legislation to curb global warming--such as taxing carbon emissions--could hasten a shift to cleaner energy and make fossil fuels more expensive to burn. That could make some oil reserves impossible to pump profitably. Oil companies counter that the world will need large volumes of oil and gas for decades. In a sign of their focus on profitability over finding more oil, some investors have welcomed companies' spending cuts despite the falling reserves. "When the house is burning you're not worrying if you need to paint the outside," said Christopher Wheaton, a fund manager at Allianz Global Investors, which holds stock in several of the large oil companies including Shell, Total and BP. "It's crisis management at the moment." That attitude marks a shift from the early 2000s, when companies responded to investor pressure to grow with aggressive drilling and, in some cases, aggressive accounting. Shell in 2004 admitted to overstating its reserves by more than 20%. Its share price dropped, senior executives left, and the company paid hefty fines. Shell declined to comment. In the years after the Shell scandal, companies raced to find more crude and poured tens of billions of dollars into projects to increase production--helping fuel the current glut and prompting Shell to shift its strategy. In 2014 Shell stopped using growth in oil and gas production as a performance metric for executive bonuses, instead emphasizing return on capital. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Oil reserves; Natural gas reserves; Petroleum industry; Corporate profits; Prices; Investments; Inventory; Natural gas; Energy industry
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 28, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776101012
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776101012?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
ConocoPhillips CEO's Compensation Falls 23%; Company's performance has been challenged amid a slump in oil prices
Author: Jamerson, Joshua
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2016: n/a.
Abstract:
ConocoPhillips (COP) Chief Executive Ryan Lance's overall compensation declined about 23% from a year ago, as the oil and natural gas company's performance has been challenged amid a slump in oil prices.
Full text: ConocoPhillips (COP) Chief Executive Ryan Lance's overall compensation declined about 23% from a year ago, as the oil and natural gas company's performance has been challenged amid a slump in oil prices. Mr. Lance's overall compensation had a total value of $21.3 million last year, down from $27.6 million in 2014, according to a regulatory filing issued Monday. Mr. Lance's 2015 compensation includes $1.7 million in base salary, $6.6 million in stock awards and $5.8 million in option awards. His incentive plan declined to $2.5 million from $3.6 million in 2014. The change in pension value and nonqualified deferred compensation earnings fell to $4.4 million from $9.9 million a year ago. Faced with continually low energy prices, firms in the sector have been cutting costs and shedding assets. ConocoPhillips in February cut its dividend by two-thirds and reported a fourth-quarter loss of $3.45 billion, hurt by $2.7 billion in asset write-downs. Write to Joshua Jamerson at joshua.jamerson@wsj.com Credit: By Joshua Jamerson
Subject: Executive compensation; Deferred compensation; Financial performance; Wages & salaries; Natural gas utilities
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 28, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776101287
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776101287?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Edge Down Amid Little-Improved Supply Picture; Traders return to market after long holiday weekend
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2016: n/a.
Abstract:
The market was overshadowed last week by Wednesday's bearish report from the U.S. Energy Department showing that U.S. crude supplies climbed by 9.4 million barrels last week, three times as high as the consensus estimate of analysts surveyed by The Wall Street Journal.
Full text: Oil prices edged down Monday, extending last week's decline, as traders returned from a long holiday weekend to a market with little improvement in supply-and-demand conditions. The benchmark U.S. contract fell 0.2% to $39.39 a barrel on the New York Mercantile Exchange, while the Brent contract lost 0.4% to settle at $40.27 on the ICE Futures Europe exchange. European trading was light due to the extended Easter weekend holiday there. Analysts said the 50% surge in crude prices since early February hasn't been accompanied by a tandem improvement in market fundamentals, with some saying the market could be seeing the beginnings of a retreat from recent highs above $40 a barrel. The market suffered its fourth straight losing session, now off 5.1% from its 2016 high set a week ago. "Increasingly bearish fundamental balances are highly visible," research consultancy Ritterbusch and Associates said in a note. Much of the rally has been built on the expectation that major producers including Saudi Arabia, Russia and others would cap output at January levels when they meet next month in Qatar, but skepticism is growing that it would do little to alleviate the global supply glut estimated to be growing at one million barrels a day. Australian bank Macquarie said in a note that it sees crude prices falling back to $30 a barrel and noted a host of forthcoming risks weighing on the market, including increased exports from Iran, Iraq, Saudi Arabia and Nigeria, rising investor outflows from crude-linked exchange-traded funds, and a strengthening dollar. "The current oil price recovery has occurred against a backdrop of weak fundamentals," the firm said. The rise has also been accompanied by financial investors in the market such as hedge funds slashing so-called short bets that profit when prices fall, while only marginally increasing bullish bets that prices would rise. Data from the U.S. Commodity Futures Trading Commission released Friday showed bearish positions were cut 28% last week, but bullish positions increased just 2%. The market was overshadowed last week by Wednesday's bearish report from the U.S. Energy Department showing that U.S. crude supplies climbed by 9.4 million barrels last week, three times as high as the consensus estimate of analysts surveyed by The Wall Street Journal. Domestic production remained above nine million barrels a day, even as investors have banked on the falling number of rigs drilling for oil in the U.S. to start to curtail production. Baker Hughes Inc. said the U.S. rig count fell by 15 last week, resuming a three-month decline and falling to a seven-year low. In refined-product markets, gasoline futures rose 0.1% to $1.4680 a gallon, while diesel futures fell 1.5% to $1.1801 a gallon. Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen
Subject: Prices; Futures; Petroleum industry
Location: United States--US Saudi Arabia
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 28, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776109578
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776109578?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Why European Airline M&A Needs a Crisis; Lufthansa isn't alone in thinking Europe's budget airline industry needs consolidating, but with cheap oil buoying profits, sellers may be in short supply.
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2016: n/a.
Abstract:
The valuations merely show that investors think the companies will have to hand some of these profits back in the form of lower fares or, if the oil price continues to recover, higher fuel bills.
Full text: Consolidation has been credited with transforming the profitability of the U.S. airline industry . Some hope the trick can be repeated in Europe's scrappy low-cost sector, but don't hold your breath. Europe's budget operators can be split into two camps. Ryanair and EasyJet, large, profitable operations with impressive track records of organic growth, sit in one of them. Neither carrier has much to gain from risky takeover activity. In the other camp is a long tail of diminutive rivals with disparate strategies. This is where consolidation could be useful. The prize is an established third place after the two giants--"going for bronze", as HSBC analyst Andrew Lobbenberg puts it. Lufthansa Chief Executive Carsten Spohr has been particularly vocal about his ambitions for Eurowings, the German flag carrier's low-cost arm. He told analysts last week he thought Ryanair and EasyJet had "reached critical size," while Eurowings and its peers lacked the scale needed to compete properly. With its strong balance sheet, Lufthansa is therefore ready for the expected "wave of consolidation". But if the smaller operators are subscale, none is obviously distressed. That makes it a potentially expensive time to go deal-hunting. True, earnings multiples in the sector are low, averaging about 8.5 times. But this is mainly because cheap fuel has turbocharged profits. The valuations merely show that investors think the companies will have to hand some of these profits back in the form of lower fares or, if the oil price continues to recover, higher fuel bills. It is also hard to identify clear targets. Wizz Air, an ultralow-cost Hungarian airline, has carved out a successful niche in Eastern Europe. Both Lufthansa and Air France-KLM were rumored to be in talks to buy the company in 2014, but then the company floated in London. With passenger numbers booming and the shares up 42% since last year's debut, the takeover opportunity has passed. The other midsize operator is Norwegian Air Shuttle, which is pioneering low-cost long-haul flying. But the Oslo-listed company has ordered so many planes, with so much debt, that analysts view a deal as unlikely. There are also blockages on the bidding side. The flag carriers have most to gain from bulking up their budget businesses. But both Lufthansa and Air France-KLM have unresolved labor disputes. Splashing cash on a low-cost operator could make agreement with unions tougher. A more credible low-cost consolidator is International Airlines Group, which was set up as a vehicle for British Airways' purchase of Iberia in 2011. The group also now includes Vueling, a budget operator based in Barcelona. Chief executive Willie Walsh bought Irish flag carrier Aer Lingus last year and has said he sees further scope for acquisitions, if and when the time is right. In reality, bankruptcy prompted many of the U.S. airline mergers. Cheap fuel has revived European executives' animal spirits, but it has also raised the cost of consolidation. Eager deal makers may have to wait for the next crisis. Credit: By Stephen Wilmot
Subject: Airlines; Airline industry; Alliances; Corporate profits; Budgets
Location: United States--US Eastern Europe
Company / organization: Name: Eurowings; NAICS: 481111; Name: Ryanair Holdings PLC; NAICS: 481111, 492110; Name: Wizz Air; NAICS: 481111; Name: Norwegian Air Shuttle ASA; NAICS: 481111; Name: Air France-KLM; NAICS: 481111; Name: International Airlines Group; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 28, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776116899
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776116899?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Slowly, Painfully, Firms Recognize Losses From Oil and Gas Deals; A prolonged period of low oil prices finally has translated into write-downs for private equity fund portfolios, although differences in accounting methods have prompted some firms to take their hits sooner than others. However, pain in the oil and gas sector could trigger more investment opportunities in 2016.
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2016: n/a.
Abstract:
Amid deepening distress in the oil and gas sector, energy investors, including EIG Global Energy Partners, EnCap Investments, Pine Brook and Energy & Minerals Group, also have taken various steps to recognize and mitigate potential losses from their investments.
Full text: Oil prices began their steady decline in 2014, but many private equity firms, including Riverstone Holdings, are only beginning to register the pain. Riverstone affiliate Riverstone Energy Ltd. marked down the fourth-quarter value of certain portfolio companies, recognizing losses on paper for the first time since oil and gas prices began sliding in the summer of 2014. Amid deepening distress in the oil and gas sector, energy investors, including EIG Global Energy Partners, EnCap Investments, Pine Brook and Energy & Minerals Group, also have taken various steps to recognize and mitigate potential losses from their investments. These steps come in a variety of forms. Some firms have opted to pump more capital into their portfolio companies or sought alternative financing to buy time until oil prices recover. Others have walked away from money-losing investments, particularly if they do not have much equity committed to the companies. Accountants and investors said, however, there is no standardized approach to recognizing losses. Falling valuations for energy companies also are encouraging some buyers and sellers in the energy sector to start transacting, after a hiatus in deal activity driven by commodity price volatility. Should I Stay or Should I Go? The oil price slump has left few, if any, private equity investors in the sector unscathed, forcing some firms to make difficult choices. The most recent weekly restructuring watch list from S&P Capital IQ's Leveraged Commentary and Data unit features 44 distressed companies across all industries, and about half of the companies are in the energy sector. Of those energy companies, seven are backed by private equity firms. In mid-March, for example, natural gas processor Southcross Energy Partners LP said its private equity-backed holding company would seek chapter 11 protection. The collapse of the holding company, backed by EIG, Tailwater Capital and Charlesbank Capital Partners, signals distress in the energy industry has expanded beyond the exploration and production sector into the comparatively insulated midstream space. "We don't need to speculate," said Oleg Mikhailov, partner and managing director at the Boston Consulting Group. "We just need to look at how the debt of some of these companies has traded...We have a few walking dead out there." In the face of deepening distress, firms must sometimes decide whether to contribute more capital to their portfolio companies or, in some cases, walk away from them entirely. Some firms have taken advantage of the shrinking valuations of their own portfolio companies by increasing their stakes in those businesses. Riverstone Energy, which marked down the valuations of several of its portfolio companies, last year participated in a capital raise by its portfolio company Canadian International Oil Corp. by investing $68 million "on very attractive terms," bringing Riverstone Energy's stake in the company to 35% on a fully diluted basis. Pine Brook and EnCap, meanwhile, decided not to invest additional equity in oil and gas explorer and producer Common Resources III LLC as commodity prices remain consistently low, putting Common Resources in runoff mode. The firms and other investors committed $412.7 million to launch Common Resources III in 2012 to acquire both conventional and unconventional resources across a wide swath of U.S., including the Gulf Coast, West Texas and the midcontinent areas. People familiar with the situation said the company hasn't drawn down its entire line of equity. Commenting generally, Joseph D'Angelo, a partner at restructuring adviser Carl Marks Advisors, said companies in shale plays that feature higher production costs or are farther away from pipeline systems may face more difficult choices. "A private equity firm has to say 'should I put more money into this company now, or should I wait for oil prices to increase?'" said Mr. D'Angelo. "For every private equity firm that has a company with a production cost that's marginally higher than the cost of oil, how do you justify putting more money in if you can't increase enterprise value? It's also very difficult to sell the assets, because it's not likely that a strategic buyer will be able to reduce that production cost based on the geology." A Tale of Two Accounting Methods Many firms that continue to hold onto their portfolio companies have recognized losses, at least on paper. However, some have marked down assets more quickly than others. Riverstone Energy, which co-invests with Riverstone Holdings' private funds, marked down the values of four portfolio companies to below-cost levels during the fourth quarter. Meanwhile, EIG marked down the unrealized value in a 2007-vintage fund by 34% for the second quarter of 2015 from the same period in 2014. One reason firms may vary in timing the write-downs of oil and gas investments stems from the fact those investments are made over the course of a few years, Kelly DePonte, managing director responsible for research at placement agent Probitas Partners, wrote in an email. The fund's valuation, therefore, "combines different levels of purchase prices at different points in cycle - and importantly in the oil and gas sector, usually a range of projects with different costs of production," Mr. DePonte wrote. "The combined impacts mean that different firms have very different cost structures or revenue-sensitivity structures." In addition, Mr. DePonte wrote firms may base their valuations of companies on a forecast of what they believe are "longer-term equilibrium prices" of oil and gas, rather than spot prices for such commodities. Alan Stevens, a certified public accountant and a partner at consulting firm BDO, added the different accounting methods firms adopt, as well as the different commodity prices firms use to measure their valuations, lead to different ways of recognizing losses from oil and gas assets. Mr. Stevens said some firms follow what is commonly referred to as a full-cost accounting method, while others adopt a successful-efforts method. The two methods lead to, among other things, different ways firms recognize asset impairments. Firms that use the full-cost method would calculate impairments using the historic average prices of oil and gas, whereas those that adopt the successful-efforts method would use forward prices of such commodities, said Mr. Stevens. "It really all comes down to prices," he said. "That creates a divergence." Mr. Stevens added that in a declining-price environment like the current one, firms that adopt the successful-efforts method would recognize losses sooner than ones that use the full-cost method because forward prices would be lower than historical averages. Opportunity Amid Chaos Although the pain caused by low oil prices contributed to a steep drop in deals in 2015, some firms said they continue to find attractive opportunities and expect to see more in 2016, particularly for distressed investors. In 2015, private equity firms made eight majority investments worth a total of $1.54 billion in the U.S. oil and gas industry, down from 16 deals worth $4 billion in 2014, according to data provider Dealogic Ltd. Deals outside of the U.S. also experienced declines in 2015 over 2014 levels. Dealogic's data only include platform investments and don't include purchases of producing properties or lease acreages. In some cases, private equity firms said transacting is a bit easier for deals outside of the U.S. European asset manager Unigestion (US) Ltd., for instance, recently made a first investment out of the firm's direct investing fund, financing U.K. oil and gas company Zennor Petroleum Ltd.'s efforts to roll up assets in the North Sea. "The energy market has repriced more quickly outside the U.S. than in the U.S.," said Federico Schiffrin, a director in Unigestion's direct investing business. Mr. Schiffrin said he believes that is because the U.S. capital markets are deeper and more robust than those elsewhere, enabling companies to refinance their debt. Bank lenders to energy borrowers also don't want to foreclose on oil and gas assets and become operators themselves, making the banks more lenient to borrowers, said Mr. Schiffrin. There are some initial signs that even in the U.S., deals may be picking up, particularly for distressed plays or companies with overlevered balance sheets. Clearlake Capital Group in March recapitalized oilfield services outfit Global Energy Services LLC, which operates at 50 locations, primarily in the Permian basin. In a news release, Clearlake cited the Permian basin's "resilience" in the current commodity price environment as part of its investment thesis. Challenges remain for investors in the U.S. Blackstone Group's credit arm GSO Capital Partners, for instance, hasn't invested any capital into a joint venture with publicly traded LINN Energy LLC, said Donald "Dwight" Scott, a GSO senior managing director. After the joint venture was formed in June, LINN ran into liquidity issues, resulting in its announcement in March that LINN was skipping interest payments on certain bonds. LINN also said it isn't in compliance with the covenants of its credit facility, and that its auditor KPMG LLP has raised doubt about LINN's ability to continue as a going concern. "Everything has fallen out of bed during that period," said Mr. Scott. "It's been hard to get any assets into the joint venture." A LINN spokeswoman didn't return messages seeking comment. The deepening distress, meanwhile, has created new credit-investment opportunities. Such opportunity first emerged during the spring of 2015, though further declines in oil prices after that have raised questions about whether or not some investors jumped in too early. Now, amid diminishing liquidity, more companies have resorted to private equity firms for funding. Clayton Williams Energy Inc., for instance, in March announced a $340 million term loan from Ares Management. Although GSO's joint venture with LINN may be in limbo, the market dislocation is creating opportunity for GSO to provide structured credit to companies seeking liquidity, said Mr. Scott. "Our origination business will be very busy during the second half of 2016, as companies get their capital structures in place or position themselves for survival or to prosper," said Mr. Scott. -Laura Kreutzer contributed to this article. Write to Shasha Dai at asknewswires@wsj.com Credit: By Shasha Dai
Subject: Private equity; Venture capital companies; Petroleum industry; Prices; Portfolio management; Equity; Natural gas; Energy industry
Location: United States--US
Company / organization: Name: Boston Consulting Group; NAICS: 541611; Name: Southcross Energy Partners LP; NAICS: 211111; Name: Energy & Minerals Group; NAICS: 523910; Name: EIG Global Energy Partners; NAICS: 523910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 28, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776120721
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776120721?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
EIG Pulls Out of Pacific Exploration Deal; EIG Global Energy Partners has pulled its buyout offer for Pacific Exploration & Production Corp., one of a few possible deals that the Canadian-Colombian oil company was hoping would stave off the need to file for bankruptcy.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Mar 2016: n/a.
Abstract: None available.
Full text: EIG Global Energy Partners has pulled its buyout offer for Pacific Exploration & Production Corp., one of a few possible deals that the Canadian-Colombian oil company was hoping would stave off the need to file for bankruptcy. EIG Pacific Holdings, the entity formed by the Washington, D.C.-based energy investment firm to acquire Pacific, announced Friday that it had ended its offer for $4.1 billion worth of Pacific's senior bonds. The tender offer expired Thursday, and EIG said that all tendered bonds have been returned. EIG had offered the bondholders 16 cents on the dollar and had promised an overhaul of Pacific's management and to sell off assets. As Toronto-listed Pacific worked to complete the deal with EIG in February, 40% of the bondholders agreed to take no action against the company, despite a missed interest payment, until March 31. Bondholders could agree to an extension of that timeline, giving Pacific more time to put together another deal. But as it currently stands, Pacific is down to only a few days before bondholders can demand immediate payment or force the company to file for bankruptcy. Earlier this month, The Wall Street Journal reported that the EIG deal was one of six options the company was considering. The other deals, which included one from Pacific's management and a debt-for-equity swap that would include $500 million in fresh financing, were due Wednesday. A company spokesman didn't immediately respond to request for comment on EIG's withdrawal. Pacific Exploration, which is listed on the Toronto Stock Exchange but which has most of its assets in Colombia, has been hit hard by falling oil prices and a lack of new discoveries. Founded by three Venezuelan and Italian oil and mining executives in 2003, Pacific focused on the country's mineral-rich eastern savanna, opening up its virgin deposits for exploration as the Colombian army pushed insurgents from the region. The company grew to be Colombia's second largest by revenue. Last year, it pumped an average of 156,000 barrels of oil equivalent a day, more than any other private firm in Latin America. But the company's market capitalization has since shrunk to about $200 million from more than $7 billion in early 2012. In January, the firm said it would skip $66 million in interest payments in hopes it could restructure $5.4 billion in debt amid collapsing oil prices. EIG and its subsidiary Harbour Energy first approached the company's noteholders in January, offering 17.5 cents on the dollar. EIG later lowered the offer, citing low oil prices and Pacific Exploration's deteriorating financial condition. -Anatoly Kurmanaev and Sara Schaefer Muñoz contributed to this article. http://www.pacific.energy/en http://www.eigpartners.com
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 28, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776133833
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776133833?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Firms Slow Exploration To Weather Low-Price Era
Author: Kent, Sarah
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Mar 2016: A.1.
Abstract:
In 2015, the seven biggest publicly traded Western energy companies, including Exxon Mobil Corp. and Royal Dutch Shell PLC, replaced just 75% of the oil and natural gas they pumped, on average, according to a Wall Street Journal analysis of company data. [...]those investments helped to fuel today's market glut. Because of accounting rules, there is another drain on the "proved reserves" that companies book and report to investors: low oil prices.
Full text: LONDON -- The world's biggest oil companies are draining their petroleum reserves faster than they are replacing them -- a symptom of how a deep oil-price decline is reshaping the energy industry's priorities. In 2015, the seven biggest publicly traded Western energy companies, including Exxon Mobil Corp. and Royal Dutch Shell PLC, replaced just 75% of the oil and natural gas they pumped, on average, according to a Wall Street Journal analysis of company data. It was the biggest combined drop in inventory that companies have reported in at least a decade. For Exxon, 2015 marked the first time in more than two decades it didn't fully replace production with new reserves, according to the company. It reported replacing 67% of its 2015 output. In the past, shrinking reserves could send investors and executives into a panic over a company's future prospects. These days, with ultralow oil prices, "it becomes less important" to replenish stockpiles, said Luca Bertelli, chief exploration officer at Italian oil producer Eni SpA. Eni has shifted spending away from high-risk, high-reward projects in favor of squeezing more out of fields that are already producing, he said. That shift shows how producers are responding to low prices by pulling back on new exploration in favor of maximizing profits. The risk is that cutting back on new projects now, when prices are low, could lead to shortages and price spikes in the future. Historically, energy companies spent heavily in the present to find resources for the future -- new wells that would replace the barrels they pump every day. When they decide they can extract the oil and gas economically, firms book those resources as proved reserves, untapped inventories to be exploited at a profit down the road. The current oil glut has forced companies to cut spending wherever they can. So they have pulled back on exploratory drilling and spending on new projects. Across the oil sector last year, companies approved just six new developments, according to Morgan Stanley researchers. That is in contrast to the past decade, when high prices led energy firms to explore in far-flung regions. They spent billions of dollars on so-called megaprojects, in part to keep their inventories brimming for decades. And those investments helped to fuel today's market glut. Because of accounting rules, there is another drain on the "proved reserves" that companies book and report to investors: low oil prices. The U.S. Securities and Exchange Commission defines proved reserves as the volume of oil and natural gas that a company can expect to tap at a profit. Some of the reserves companies added are too expensive to extract profitably at today's prices. That has forced some companies to remove barrels from their books, and in some cases to write down the value of those assets. Shell wrote off billions of dollars from the value of its assets last year, and low prices contributed to a decision to cancel a project in Canada's high-cost oil sands. The company didn't replace any of the oil it pumped last year. Overall its reserves shrank by 20%. Despite lower reserves, big oil companies aren't about to run out of crude. Exxon, for instance, retains enough reserves to last 16 years at the current rate of production. And in addition to their still-considerable proved reserves, the companies have access to other resources that could become viable to pump if oil prices rise. Exxon Chief Executive Rex Tillerson told analysts earlier this month the company's failure to fully replace the oil and gas it produced last year reflects its focus on "deploying capital efficiently to create that long-term shareholder value, even if it means interrupting a 21-year trend." SEC rules require oil companies to report "proved" reserves based on an average price each year. On a year-to-year basis, proved reserves can be volatile based on oil-price swings. Last year's sharp price drop forced some companies to reduce their proved reserves, though falling costs helped offset the reductions. Some companies' reserves also benefited from contracts that grant them a larger share of production when prices are low. Among the largest oil companies, only Chevron Corp., Eni and France's Total SA last year added more new barrels than they pumped. BP PLC replaced 61% of its production last year -- excluding the impact of sales and acquisitions -- and Norway's Statoil ASA replaced 55%. While Shell's reserves fell, the company this year completed a roughly $50 billion acquisition of BG Group PLC that is expected to boost reserves by around 25% from their levels at the end of 2014. Companies' reserve volumes are facing other potential threats beyond low oil prices. Some investors have expressed concern recently that legislation to curb global warming -- such as taxing carbon emissions -- could hasten a shift to cleaner energy and make fossil fuels more expensive to burn. That could make some oil reserves impossible to pump profitably. Oil companies counter that the world will need large volumes of oil and gas for decades. In a sign of their focus on profitability over finding more oil, some investors have welcomed companies' spending cuts despite the falling reserves. "When the house is burning you're not worrying if you need to paint the outside," said Christopher Wheaton, a fund manager at Allianz Global Investors, which holds stock in several of the large oil companies including Shell, Total and BP. "It's crisis management at the moment." That attitude marks a shift from the early 2000s, when companies responded to investor pressure to grow with aggressive drilling and, in some cases, aggressive accounting. Shell in 2004 admitted to overstating its reserves by more than 20%. Its share price dropped, senior executives left, and the company paid hefty fines. Shell declined to comment. In the years after the Shell scandal, companies raced to find more crude and poured tens of billions of dollars into projects to increase production -- helping fuel the current glut and prompting Shell to shift its strategy. In 2014 Shell stopped using growth in oil and gas production as a performance metric for executive bonuses, instead emphasizing return on capital. Credit: By Sarah Kent
Subject: Oil reserves; Natural gas reserves; Corporate profits; Prices; Inventory; Natural gas; Energy industry; Petroleum industry; Oil exploration
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Mar 28, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776144686
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776144686?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Location Is King in the Oil Field
Author: Dezember, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Mar 2016: C.1.
Abstract:
In south Texas, the difference between wells with initial flows greater than the equivalent of 800 barrels of oil a day compared with those that produce less than 600 barrels a day is the difference between profits and losses, according to energy consultants RBN Energy LLC. [...]lately, drilling productivity, or lack of it, had been masked by high prices.
Full text: For energy investors, it is all about location, location, location. That is the message that emerges in the prices of bonds of oil-and-gas companies operating across North America. Bonds of companies with below-investment-grade credit ratings, or junk bonds, have held up best for producers in west Texas, Canada and parts of Oklahoma, as producers in those regions have proved relatively resilient to low commodity prices, according to data from Citi Research, part of Citigroup Inc. Meanwhile, bond prices of producers operating in east Texas, North Dakota and the Gulf of Mexico have fallen to distressed levels, indicating bond investors -- focused on a company's financial strength -- aren't keen on drilling properties in those areas. There are a few reasons for the divergence, including terrain and the costs of transporting oil and gas to market. But the biggest factor is simply how much fuel is yielded by wells in certain areas versus other areas for relatively similar costs. In south Texas, the difference between wells with initial flows greater than the equivalent of 800 barrels of oil a day compared with those that produce less than 600 barrels a day is the difference between profits and losses, according to energy consultants RBN Energy LLC. Until lately, drilling productivity, or lack of it, had been masked by high prices. "When crude was at $100 it didn't matter," said RBN President Rusty Braziel. "Everything was good at $100." At around $40 a barrel, though, it is a lot harder to cover costs. The sharp decline in prices since mid-2014 has forced producers to drill only their best prospects. With many investors and energy executives expecting prices to remain at these levels for some time, companies that can't profit drilling their best properties aren't being given strong odds of survival by debt investors. Consider east Texas, which Citi defines to include the Haynesville, Bossier and Barnett shales. The unweighted average price for the longest-dated unsecured junk bonds of companies with primary operations there has plummeted to less than 12 cents on the dollar, the bank said. Goodrich Petroleum Corp., which drills mostly in the region and has bonds that trade at around 1 cent on the dollar, said earlier this month it expects to report a large loss for 2015 after writing down the value of its assets and that its auditors are likely to express substantial doubt about its ability to stay in business. It is a different story on the other side of the state. Companies drilling in the Permian Basin in west Texas have been among the industry's best performing, with stocks that have risen in some cases throughout the downturn. Several layers of oil- and gas-bearing rock are stacked in the Permian, giving producers more chances to hit pay dirt from each well. Meanwhile, these producers reap the same savings on drilling and supplies -- which have fallen with oil prices -- as competitors in other areas. The low costs, combined with individual wells that produce the equivalent of thousands of barrels of oil a day, result in a profit even at $30 oil for some producers, said Gabriele Sorbara, an analyst with Topeka Capital Markets. Citi's data peg the Permian as the most-profitable drilling area in North America, and average bond prices have held steady at about 80 cents on the dollar. Still, there is wide variance within the Permian. Diamondback Energy Inc.'s bonds trade at a premium to their issue price, yet debt sold by Approach Resources Inc., which drills one county south of Diamondback, trades at a big discount to face value. Varied fortunes such as those can be found within many drilling regions, said Citi credit analyst Marisa Moss. "Even in good areas, it's very county by county." Mr. Braziel's RBN Energy studied the Eagle Ford Shale in south Texas -- where bond prices average about 50 cents on the dollar by Citi's methodology -- examining production data and financial returns on individual wells. RBN found that a narrow band of land where wells produce initial flows greater than the equivalent of 800 barrels of oil a day are generally profitable at $38 a barrel. But just outside that area, wells likely won't produce enough to justify drilling at current prices, Mr. Braziel said. "It's the difference between having a bond yield of 8% versus 80%," he said. Credit: By Ryan Dezember
Subject: Investors; Bond issues; Energy industry; Crude oil prices
Location: North America
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Mar 28, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776157804
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Futures Continue Slide In Asia as Crude Glut Weighs; May Brent crude on London's ICE Futures exchange fell 17 cents to $40.10 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
If this is successful and has the potential for production cuts prices will soon rise further as sentiment and technical indicators are being focused rather than fundamentals," according to Stuart Ive, private client manager at OM Financial.
Full text: Oil prices continued to ease in early Asia trading Tuesday, as traders awaited further details on the scale of the oil supply glut following a weeks-long price rally. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May fell 16 cents to $39.23 a barrel in the Globex electronic session. May Brent crude on London's ICE Futures exchange fell 17 cents to $40.10 a barrel. Prices slipped following the long Easter weekend, pulling back from a recent rally that has sent both Nymex and Brent crude back above $40 a barrel. Several data points from last week indicated the global glut of crude remains firmly in place despite the recent rally in prices, including a big increase in U.S. oil stockpiles and firm crude output. Much of the attention of oil market participants remains fixed on an upcoming meeting of major producer nations scheduled for next month in Qatar. Analysts say that if producers reach an agreement on a production freeze, as hoped-for by several big exporters, then prices could make a renewed push higher. "We are just over two weeks until the producer meeting in Doha to discuss a production freeze. If this is successful and has the potential for production cuts prices will soon rise further as sentiment and technical indicators are being focused rather than fundamentals," according to Stuart Ive, private client manager at OM Financial. Investors in commodities have been cutting their bets on lower crude prices recently. Bearish positions fell 28% last week, according to data from the U.S. Commodity Futures Trading Commission. Still, bullish bets only rose 2%, a sign that investors are taking a wait-and-see approach, according to Daniel Holder, commodity analyst at Schneider Electric. "The filled short positions have not been transformed into longs, but instead into wait-and-see positions," Mr. Holder wrote in a note to clients. "The market now enters a period of price uncertainty." Nymex reformulated gasoline blendstock for April, the benchmark gasoline contract, fell 27 points to $1.4653 a gallon, while April diesel traded at $1.1786, 15 points lower. ICE gasoil for April changed hands at $353.00 a metric ton, up $1 from Monday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Petroleum industry; Futures; Crude oil prices
Location: United States--US Asia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776242679
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776242679?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Oil Slips Below $39 as Rally Loses More Momentum; U.S. crude inventories stand at the highest level in more than 80 years
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
Hedge funds, pension funds and other money managers closed out more than 100,000 bets that oil prices would fall between Feb. 9 and March 22, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. But they added fewer bets on rising prices, highlighting their doubt that the price gains would continue. The number of rigs drilling for oil and natural gas in the U.S. has plunged to a record low, according to Baker Hughes Inc. data starting in 1948, an indicator that production is likely to keep declining.
Full text: Oil prices sank to a two-week low Tuesday on renewed concerns that the global market remains too awash in crude to support prices near $40 a barrel. U.S. prices dropped for a fifth session in a row, matching the market's longest losing streak since Feb. 11 when they hit a 13-year low at $26.21. Oil is down 7.6% from its recent peak on March 22. The buoyant market sentiment of only two weeks ago has reversed sharply, with an anticipated supply freeze now in doubt. More * Oil Explorers Struggle to Get Financing Kuwait provided the latest blow when the acting oil minister said that production could restart in the Khafji oil field. The 300,000 barrel-a-day field, which is jointly operated by state-owned oil companies Kuwait Gulf Oil Co. and Saudi Arabia's Aramco Gulf Operations Co., has been closed since October 2014. Traders said the announcement raises questions about an April 17 meeting of major producers in Doha, Qatar, to discuss a production freeze. Those talks had been a primary driver of the recent rally that boosted oil futures more than 50% in about six weeks. "How serious are they about freezing if they're going to come online with new production?" Dave Clayman, principal at Twelve Points Capital LLC, said of Saudi Arabia and Kuwait. Light, sweet crude for May delivery settled down $1.11, or 2.8%, at $38.28 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $1.13, or 2.8%, to $39.14 a barrel on ICE Futures Europe. Both contracts settled at their lowest levels since March 15. Numerous oil rallies have fizzled since a global oversupply of crude sent prices plunging below $100 a barrel in mid-2014. While companies have slashed spending in response to low prices and output has started to decline in the U.S., global production continues to exceed demand. Global oil inventories remain near records. U.S. crude stockpiles stand at the highest level in more than 80 years, and government inventory data due Wednesday are expected to show another increase, according to analysts surveyed by The Wall Street Journal. Stephen Schork, editor of industry newsletter the Schork Report, three weeks ago closed out a bet that oil prices would fall as the market moved against him. He placed a new bearish bet Monday. "The rally has run its course, and I think our next big move is another trip back below $30," Mr. Schork said. Hedge funds, pension funds and other money managers closed out more than 100,000 bets that oil prices would fall between Feb. 9 and March 22, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. But they added fewer bets on rising prices, highlighting their doubt that the price gains would continue. "There was a lot of skepticism," about the rally, said Ric Navy, senior vice president for energy futures at brokerage R.J. O'Brien & Associates LLC. "You just ran out of reasons...to keep buying into it." Even before Kuwait's announcement, many analysts were skeptical about next month's producer meeting in Doha because Iran and Libya haven't agreed to participate in a freeze. Any production growth from those two countries could offset a decline in output elsewhere, the analysts say. Twelve Points, which manages about $80 million, two weeks ago placed new wagers that oil prices would fall, Mr. Clayman said. "I would put odds at a deal less than 70% and if it even happens I think it's a meaningless deal," he said. "You need a cut for it to be meaningful and that's not going to happen." Other investors say the rally has further to run. U.S. production has dropped from 9.7 million barrels a day in April 2015 to 9.1 million barrels a day in February, according to the Energy Information Administration. The number of rigs drilling for oil and natural gas in the U.S. has plunged to a record low, according to Baker Hughes Inc. data starting in 1948, an indicator that production is likely to keep declining. "The worst has been seen, in my view," said Danilo Onorino, portfolio manager at Dogma Capital SA in Switzerland, who manages energy investments. Mr. Onorino invested in integrated oil companies in February based on his expectation that prices would rise from their lows, he said. Others aren't ready to count on a rebound. U.S. oil producers "are still...drilling new wells," said Jun Zhu, portfolio manager at Leuthold Weeden Capital Management, which manages $1.8 billion. "We need to see that activity come down even further to bring future production down." Ms. Zhu has no exposure to energy companies. Oil prices erased some of their losses after Federal Reserve Chairwoman Janet Yellen struck a cautious tone in a speech in New York. The dollar fell on the news. A weaker greenback makes oil, which is traded in dollars, more affordable to foreign buyers. Gasoline futures settled down 1.42 cents, or 1%, at $1.4538 a gallon. Diesel futures fell 2.46 cents, or 2.1%, to $1.1555 a gallon. Summer Said contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Crude oil prices
Location: Kuwait United States--US Saudi Arabia
Company / organization: Name: Intercontinental Exchange Inc; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Commodity Futures Trading Commission; NAICS: 926140, 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776353666
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776353666?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
EIG Pulls Out of Pacific Exploration Deal; EIG Global Energy Partners has pulled its buyout offer for Pacific Exploration & Production Corp., one of a few possible deals that the Canadian-Colombian oil company was hoping would stave off the need to file for bankruptcy.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract: None available.
Full text: EIG Global Energy Partners has pulled its buyout offer for Pacific Exploration & Production Corp., one of a few possible deals that the Canadian-Colombian oil company was hoping would stave off the need to file for bankruptcy. EIG Pacific Holdings, the entity formed by the Washington, D.C.-based energy investment firm to acquire Pacific, announced Friday that it had ended its offer for $4.1 billion worth of Pacific's senior bonds. The tender offer expired Thursday, and EIG said that all tendered bonds have been returned. EIG had offered the bondholders 16 cents on the dollar and had promised an overhaul of Pacific's management and to sell off assets. As Toronto-listed Pacific worked to complete the deal with EIG in February, 40% of the bondholders agreed to take no action against the company, despite a missed interest payment, until March 31. Bondholders could agree to an extension of that timeline, giving Pacific more time to put together another deal. But as it currently stands, Pacific is down to only a few days before bondholders can demand immediate payment or force the company to file for bankruptcy. Earlier this month, The Wall Street Journal reported that the EIG deal was one of six options the company was considering. The other deals, which included one from Pacific's management and a debt-for-equity swap that would include $500 million in fresh financing, were due Wednesday. A company spokesman didn't immediately respond to request for comment on EIG's withdrawal. Pacific Exploration, which is listed on the Toronto Stock Exchange but which has most of its assets in Colombia, has been hit hard by falling oil prices and a lack of new discoveries. Founded by three Venezuelan and Italian oil and mining executives in 2003, Pacific focused on the country's mineral-rich eastern savanna, opening up its virgin deposits for exploration as the Colombian army pushed insurgents from the region. The company grew to be Colombia's second largest by revenue. Last year, it pumped an average of 156,000 barrels of oil equivalent a day, more than any other private firm in Latin America. But the company's market capitalization has since shrunk to about $200 million from more than $7 billion in early 2012. In January, the firm said it would skip $66 million in interest payments in hopes it could restructure $5.4 billion in debt amid collapsing oil prices. EIG and its subsidiary Harbour Energy first approached the company's noteholders in January, offering 17.5 cents on the dollar. EIG later lowered the offer, citing low oil prices and Pacific Exploration's deteriorating financial condition. -Anatoly Kurmanaev and Sara Schaefer Muñoz contributed to this article. http://www.pacific.energy/en http://www.eigpartners.com
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776364946
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776364946?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Explorers Face Challenge to Secure Financing as Oil Prices Fall; Banks growing concerned about the growing debt taken on by oil companies with little or no profits
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
The stakes were underscored in February when First Oil Expro, a subsidiary of the largest privately owned U.K. North Sea oil producer, called in the administrators--a process similar to filing for chapter 11 bankruptcy in the U.S. First Oil Expro was unable to meet its share of costs on one big development and was unable to keep up payments on loans in excess of $150 million.
Full text: LONDON--Just a few years ago, when oil sold for about $100 a barrel, banks here were lining up to give international oil explorers access to billions of dollars to finance new drilling and projects. But as oil prices stay mired in a funk, the money is drying up. Senior executives from companies such as Tullow Oil PLC and Cairn Energy PLC have been meeting with their bankers for a biannual review of the loans that allow them to keep drilling and building out projects. For many European companies, it has been a nail-biting experience, as banks worry about the growing pile of debt taken on by oil companies with little or no profits. Several companies said they expect their ability to tap credit lines to be diminished after the reviews. Some lenders have brought in teams that specialize in corporate restructuring to scrutinize companies' balance sheets, spending and assets, though not at Tullow or Cairn, a person familiar with the matter said. In the past, the reviews were generally conducted solely by banks' energy specialists. The new scrutiny in Europe comes as oil-company debt emerges as an issue across the world with prices for crude near $40 a barrel--down more than 60% from June 2014. Globally, the net debt of publicly listed oil and gas companies has nearly tripled over the past decade to $549 billion in 2015, excluding state-owned oil companies, according to Wood Mackenzie, the energy consultancy. Reviews of these loans have high stakes. If a bank decides a company has already borrowed more than it can afford, the reviews could trigger a repayment, more cost cuts or even a fire sale of assets to raise cash. Related News * Coming to the Oil Patch: Bad Loans to Outnumber the Good * Oil Rout Crimps Sector's Presence on U.K.'s FTSE 100 * Midtier Oil Explorers Suffer With Price Drop (Dec. 21, 2014) * Oil Exploration Companies Scramble to Cut Costs (Aug. 27, 2015) Many of the reviews have concluded, or will soon, and the results could be known as soon as this week. "There isn't anyone in the oil independent sector that will be very relaxed at the moment," said Thomas Bethel, a partner specializing in energy finance at Herbert Smith Freehills LLP. Oil companies are facing a similar set of biannual reviews in the U.S., where many small and midsize companies borrowed heavily to expand during the shale boom. The number of energy loans deemed in danger of default is on course to breach 50% at several major U.S. banks, The Wall Street Journal reported last week. But some American firms have been able to raise cash by issuing new stock or selling new debt , while in recent years Europe-based explorers have come to rely more on bank lending as investors that once pumped up the industry are fleeing in droves. In Europe, the focus is on a specialized type of borrowing known as reserves-based lending that has mushroomed in recent years. Europe's top 10 non-state-owned oil companies have taken on over $12 billion in such loans, which are particularly exposed to energy prices as they are secured against the value of a company's petroleum reserves and future production. At Tullow, Chief Financial Officer Ian Springett said he thinks the company could lose some ability to draw on its $3.7 billion credit line with its banks. Cairn expects its banks will allow it access to only about $335 million of the $400 million in credit that was once available. "When oil was at $100 a barrel, debt was easy to get," Cairn Chief Executive Simon Thomson said in an interview. "What we're seeing today is a number of people suffering the hangover of having secured that debt and now possibly having trouble servicing it." The stakes were underscored in February when First Oil Expro, a subsidiary of the largest privately owned U.K. North Sea oil producer, called in the administrators--a process similar to filing for chapter 11 bankruptcy in the U.S. First Oil Expro was unable to meet its share of costs on one big development and was unable to keep up payments on loans in excess of $150 million. "The key issue around First Oil Expro's demise was the sharp fall in the oil price which led to a significant loss of confidence in the sector," said Jim Tucker, joint administrator of First Oil Expro and restructuring partner at KPMG. The oil-company debt reviews come at a tough time for oil explorers that aren't brand names but take risks to open up fields in risky regions that bigger companies such as Exxon Mobil Corp. often tap into later, such as Kurdistan in Iraq. Investors pulled back from these companies as oil prices fell, sending share prices into the basement. That crimped their ability to raise cash by issuing new stock or selling new debt, such as corporate bonds, analysts say. The explorers' revenues also fell, and many had to cut the value of their fields and reserves. Some factors are working in the energy companies' favor. Banks have an incentive not to turn the screws too tightly on oil companies, forcing them out of business and into default on loans. Several companies also have oil and gas fields that are set to begin production soon and provide a jolt of cash. At Tullow, Mr. Springett said the company was on firm ground because a large oil field in Ghana is due to begin pumping later this year. And Cairn is developing fields in the U.K. North Sea that are due to come onstream next year, Mr. Thomson said. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Subject: Petroleum industry; Prices; Lines of credit; Natural gas utilities
Location: Europe
Company / organization: Name: Herbert Smith Freehills LLP; NAICS: 541110; Name: Cairn Energy PLC; NAICS: 211111; Name: Tullow Oil PLC; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776376440
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776376440?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
PE Plays Texas Hold 'Em in the Oil & Gas Patch; If private equity investors in the oil and gas space had a theme song these days, it might be Kenny Rogers's 1970s classic "The Gambler" with its memorable hook, "You got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run."
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
[...]amid the doom and gloom, private equity investors in the oil patch also point out that investment opportunities, particularly distressed opportunities, finally may be starting to pick up.
Full text: PE Plays Texas Hold 'Em in the Oil & Gas Patch If private equity investors in the oil and gas space had a theme song these days, it might be Kenny Rogers's 1970s classic "The Gambler" with its memorable hook, "You got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run." Private equity investors certainly bet heavily on oil and gas over the past decade and, for a long time, many of those bets paid off handsomely. Today, however, as oil prices hover between $30 to $40 a barrel, more private equity firms will face their own hold 'em or fold 'em dilemma. This spring, oil and gas companies face another round of borrowing base redeterminations and, this time, many predict the industry will experience a fresh wave of pain. But amid the doom and gloom, private equity investors in the oil patch also point out that investment opportunities, particularly distressed opportunities, finally may be starting to pick up. Hopefully, the gambles private equity firms take on oil and gas deals in the current environment will ultimately pay off. MAR 29 -- Conference Board publishes March consumer confidence index 10:00am ET MAR 29 -- Fed's Yellen speaks on economic outlook and monetary policy in New York 12:20pm ET MAR 29 -- Dallas Fed's Kaplan takes part in question-and-answer session in Austin, Texas 1:00pm ET Send us your tips, suggestions and feedback. Write to: Yolanda Bobeldijk ; Laura Cooper ; Chris Cumming ; Shasha Dai ; Braden Kelner ; Laura Kreutzer ; Dawn Lim ; William Louch ; Mike Lucas ; Amy Or ; Becky Pritchard ; David Smagalla ; Chitra Vemuri . Follow us on Twitter: @YEBobeldijk , @LCooperReports , @ShashaDai1 , @bradenkelner , @LauraKreutzer , @dawnlim , @william_louch , @Lucastoons , @beckspritchard , @DSmagall_DJ
Subject: Private equity; Venture capital companies; Equity; Natural gas utilities
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776376475
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776376475?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Slowly, Painfully, Firms Recognize Losses From Oil and Gas Deals; A prolonged period of low oil prices finally has translated into write-downs for private equity fund portfolios, although differences in accounting methods have prompted some firms to take their hits sooner than others. However, pain in the oil and gas sector could trigger more investment opportunities in 2016.
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
Amid deepening distress in the oil and gas sector, energy investors, including EIG Global Energy Partners, EnCap Investments, Pine Brook and Energy & Minerals Group, also have taken various steps to recognize and mitigate potential losses from their investments.
Full text: Oil prices began their steady decline in 2014, but many private equity firms, including Riverstone Holdings, are only beginning to register the pain. Riverstone affiliate Riverstone Energy Ltd. marked down the fourth-quarter value of certain portfolio companies, recognizing losses on paper for the first time since oil and gas prices began sliding in the summer of 2014. Amid deepening distress in the oil and gas sector, energy investors, including EIG Global Energy Partners, EnCap Investments, Pine Brook and Energy & Minerals Group, also have taken various steps to recognize and mitigate potential losses from their investments. These steps come in a variety of forms. Some firms have opted to pump more capital into their portfolio companies or sought alternative financing to buy time until oil prices recover. Others have walked away from money-losing investments, particularly if they do not have much equity committed to the companies. Accountants and investors said, however, there is no standardized approach to recognizing losses. Falling valuations for energy companies also are encouraging some buyers and sellers in the energy sector to start transacting, after a hiatus in deal activity driven by commodity price volatility. Should I Stay or Should I Go? The oil price slump has left few, if any, private equity investors in the sector unscathed, forcing some firms to make difficult choices. The most recent weekly restructuring watch list from S&P Capital IQ's Leveraged Commentary and Data unit features 44 distressed companies across all industries, and about half of the companies are in the energy sector. Of those energy companies, seven are backed by private equity firms. In mid-March, for example, natural gas processor Southcross Energy Partners LP said its private equity-backed holding company would seek chapter 11 protection. The collapse of the holding company, backed by EIG, Tailwater Capital and Charlesbank Capital Partners, signals distress in the energy industry has expanded beyond the exploration and production sector into the comparatively insulated midstream space. "We don't need to speculate," said Oleg Mikhailov, partner and managing director at the Boston Consulting Group. "We just need to look at how the debt of some of these companies has traded...We have a few walking dead out there." In the face of deepening distress, firms must sometimes decide whether to contribute more capital to their portfolio companies or, in some cases, walk away from them entirely. Some firms have taken advantage of the shrinking valuations of their own portfolio companies by increasing their stakes in those businesses. Riverstone Energy, which marked down the valuations of several of its portfolio companies, last year participated in a capital raise by its portfolio company Canadian International Oil Corp. by investing $68 million "on very attractive terms," bringing Riverstone Energy's stake in the company to 35% on a fully diluted basis. Pine Brook and EnCap, meanwhile, decided not to invest additional equity in oil and gas explorer and producer Common Resources III LLC as commodity prices remain consistently low, putting Common Resources in runoff mode. The firms and other investors committed $412.7 million to launch Common Resources III in 2012 to acquire both conventional and unconventional resources across a wide swath of U.S., including the Gulf Coast, West Texas and the midcontinent areas. People familiar with the situation said the company hasn't drawn down its entire line of equity. Commenting generally, Joseph D'Angelo, a partner at restructuring adviser Carl Marks Advisors, said companies in shale plays that feature higher production costs or are farther away from pipeline systems may face more difficult choices. "A private equity firm has to say 'should I put more money into this company now, or should I wait for oil prices to increase?'" said Mr. D'Angelo. "For every private equity firm that has a company with a production cost that's marginally higher than the cost of oil, how do you justify putting more money in if you can't increase enterprise value? It's also very difficult to sell the assets, because it's not likely that a strategic buyer will be able to reduce that production cost based on the geology." A Tale of Two Accounting Methods Many firms that continue to hold onto their portfolio companies have recognized losses, at least on paper. However, some have marked down assets more quickly than others. Riverstone Energy, which co-invests with Riverstone Holdings' private funds, marked down the values of four portfolio companies to below-cost levels during the fourth quarter. Meanwhile, EIG marked down the unrealized value in a 2007-vintage fund by 34% for the second quarter of 2015 from the same period in 2014. One reason firms may vary in timing the write-downs of oil and gas investments stems from the fact those investments are made over the course of a few years, Kelly DePonte, managing director responsible for research at placement agent Probitas Partners, wrote in an email. The fund's valuation, therefore, "combines different levels of purchase prices at different points in cycle - and importantly in the oil and gas sector, usually a range of projects with different costs of production," Mr. DePonte wrote. "The combined impacts mean that different firms have very different cost structures or revenue-sensitivity structures." In addition, Mr. DePonte wrote firms may base their valuations of companies on a forecast of what they believe are "longer-term equilibrium prices" of oil and gas, rather than spot prices for such commodities. Alan Stevens, a certified public accountant and a partner at consulting firm BDO, added the different accounting methods firms adopt, as well as the different commodity prices firms use to measure their valuations, lead to different ways of recognizing losses from oil and gas assets. Mr. Stevens said some firms follow what is commonly referred to as a full-cost accounting method, while others adopt a successful-efforts method. The two methods lead to, among other things, different ways firms recognize asset impairments. Firms that use the full-cost method would calculate impairments using the historic average prices of oil and gas, whereas those that adopt the successful-efforts method would use forward prices of such commodities, said Mr. Stevens. "It really all comes down to prices," he said. "That creates a divergence." Mr. Stevens added that in a declining-price environment like the current one, firms that adopt the successful-efforts method would recognize losses sooner than ones that use the full-cost method because forward prices would be lower than historical averages. Opportunity Amid Chaos Although the pain caused by low oil prices contributed to a steep drop in deals in 2015, some firms said they continue to find attractive opportunities and expect to see more in 2016, particularly for distressed investors. In 2015, private equity firms made eight majority investments worth a total of $1.54 billion in the U.S. oil and gas industry, down from 16 deals worth $4 billion in 2014, according to data provider Dealogic Ltd. Deals outside of the U.S. also experienced declines in 2015 over 2014 levels. Dealogic's data only include platform investments and don't include purchases of producing properties or lease acreages. In some cases, private equity firms said transacting is a bit easier for deals outside of the U.S. European asset manager Unigestion (US) Ltd., for instance, recently made a first investment out of the firm's direct investing fund, financing U.K. oil and gas company Zennor Petroleum Ltd.'s efforts to roll up assets in the North Sea. "The energy market has repriced more quickly outside the U.S. than in the U.S.," said Federico Schiffrin, a director in Unigestion's direct investing business. Mr. Schiffrin said he believes that is because the U.S. capital markets are deeper and more robust than those elsewhere, enabling companies to refinance their debt. Bank lenders to energy borrowers also don't want to foreclose on oil and gas assets and become operators themselves, making the banks more lenient to borrowers, said Mr. Schiffrin. There are some initial signs that even in the U.S., deals may be picking up, particularly for distressed plays or companies with overlevered balance sheets. Clearlake Capital Group in March recapitalized oilfield services outfit Global Energy Services LLC, which operates at 50 locations, primarily in the Permian basin. In a news release, Clearlake cited the Permian basin's "resilience" in the current commodity price environment as part of its investment thesis. Challenges remain for investors in the U.S. Blackstone Group's credit arm GSO Capital Partners, for instance, hasn't invested any capital into a joint venture with publicly traded LINN Energy LLC, said Donald "Dwight" Scott, a GSO senior managing director. After the joint venture was formed in June, LINN ran into liquidity issues, resulting in its announcement in March that LINN was skipping interest payments on certain bonds. LINN also said it isn't in compliance with the covenants of its credit facility, and that its auditor KPMG LLP has raised doubt about LINN's ability to continue as a going concern. "Everything has fallen out of bed during that period," said Mr. Scott. "It's been hard to get any assets into the joint venture." A LINN spokeswoman didn't return messages seeking comment. The deepening distress, meanwhile, has created new credit-investment opportunities. Such opportunity first emerged during the spring of 2015, though further declines in oil prices after that have raised questions about whether or not some investors jumped in too early. Now, amid diminishing liquidity, more companies have resorted to private equity firms for funding. Clayton Williams Energy Inc., for instance, in March announced a $340 million term loan from Ares Management. Although GSO's joint venture with LINN may be in limbo, the market dislocation is creating opportunity for GSO to provide structured credit to companies seeking liquidity, said Mr. Scott. "Our origination business will be very busy during the second half of 2016, as companies get their capital structures in place or position themselves for survival or to prosper," said Mr. Scott. -Laura Kreutzer contributed to this article. Write to Shasha Dai at asknewswires@wsj.com Credit: By Shasha Dai
Subject: Private equity; Venture capital companies; Petroleum industry; Prices; Portfolio management; Equity; Natural gas; Energy industry
Location: United States--US
Company / organization: Name: Boston Consulting Group; NAICS: 541611; Name: Southcross Energy Partners LP; NAICS: 211111; Name: Energy & Minerals Group; NAICS: 523910; Name: EIG Global Energy Partners; NAICS: 523910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776405237
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776405237?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shares Fall in U.K. Oil Explorers After U.N. Commission Ruling on Falklands Waters; Latest flare up in long-running diplomatic row over the sovereignty of the islands
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
[...]the high costs of developing the remote offshore oil fields, which lie around 136 miles north of the Falklands, and the subsequent plunge in oil prices has delayed the companies' plans to commit to final investment in the project, known as Sea Lion.
Full text: LONDON--British oil companies with interests in the Falkland Islands suffered a blow on Tuesday when a U.N. commission said that the waters around the South Atlantic archipelago belong to Argentina. It is the latest flare up in the long-running diplomatic row over the sovereignty of the Falkland Islands that has engulfed oil and gas exploration companies, including U.K.-listed Premier Oil PLC and Rockhopper Exploration PLC, which are seeking to develop oil fields they discovered in disputed waters off the coast of the Falklands. Shares in the two companies fell more than 7% in London trade after the United Nations said on its website that its Commission on the Limits of the Continental Shelf had adopted Argentina's recommendations. The statement didn't give details on Argentina's recommendations and added that the commission had previously decided that it wasn't in a position to consider areas that were already subject to dispute. Premier and Rockhopper declined to comment. A spokeswoman for British Prime Minister David Cameron said the government had yet to receive details of the report. She added that the U.N. commission had an advisory role only and its recommendations are not legally binding. "The commission doesn't have jurisdiction to consider sovereignty issues," Mr. Cameron's spokeswoman said. The U.N. wasn't immediately able to provide comment. Argentina's government didn't respond to a request for comment. Argentina lays claim to the U.K. overseas territory in the South Atlantic, which are called Las Malvinas in Spanish, and has long called for talks to resolve the dispute over which the two countries fought a brief and bloody war in 1982. The prospect of large oil and gas developments off the coast of the islands has ratcheted up tensions between the two in recent years. The Falklands were once seen as the next frontier for oil discoveries and hopes of an oil-led boom were raised when Rockhopper Exploration and its partners made a major discovery in the North Falkland Basin. But the high costs of developing the remote offshore oil fields, which lie around 136 miles north of the Falklands, and the subsequent plunge in oil prices has delayed the companies' plans to commit to final investment in the project, known as Sea Lion. The companies have also scaled back the development. In April 2015, Argentina filed a criminal complaint with a government body--similar to the Attorney General's office in the U.S.--against several oil exploration companies, according to the Argentine government. The government said its complaint alleges the companies are breaking the law by engaging in offshore exploration without previously obtaining approval from Argentina's energy secretariat. Nicholas Winning contributed to this article. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Subject: Petroleum industry; Sovereignty; Oil fields
Location: Argentina United Kingdom--UK Falkland Islands
People: Cameron, David
Company / organization: Name: Rockhopper Exploration PLC; NAICS: 211111; Name: United Nations--UN; NAICS: 928120; Name: Premier Oil PLC; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776411980
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776411980?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
India's 3F Oil Palm to Boost Gabon's Palm Oil Industry With $200M Venture
Author: Tumanjong, Emmanuel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
With about 230,000 barrels of crude oil daily, oil accounts for about 50% of Gabon's GDP, according to government figures, which indicates that the country's economy has also been hit by recoiling crude oil prices.
Full text: YAOUNDE, Cameroon--India's commodity giant, 3F Oil Palm Agrotech Ltd. plans to invest $200 million on a giant palm oil project in plans to build in Gabon, a key swing to boost the tiny mineral-rich African nation facing the glut of plunging world oil prices. Gabon's Minister of Agriculture Mathieu Mboumba Nziengui said the Indian equity's Managing Director Sanjay Goenka held talks with Gabon's Premier Daniel Ona Ondo last weekend for negotiations toward inking an accord authorizing the company to secure 40,000 hectares of land for its palm oil project. "This accord would lead to the delivery of 40,000 hectares of land for the production and refining of palm oil, creation of 4,000 direct and indirect jobs--but most importantly--the investment of US$200 million," Minister Nziengui said, citing Mr. Goenka's commitment to the project. Palm oil is one of several economic segments Gabon's government is opening to diversify its economy and shrug off the weight of plunging global oil prices and its aging wells that is negatively impacting its economy. Gabon President Ali Bongo Ondimba had announced his government's strategy to diversify the nation's economy from mainly crude oil production, whose aging wells has caused output to plunge in recent years. With about 230,000 barrels of crude oil daily, oil accounts for about 50% of Gabon's GDP, according to government figures, which indicates that the country's economy has also been hit by recoiling crude oil prices. Credit: By Emmanuel Tumanjong
Subject: Crude oil; Petroleum industry; Vegetable oils; Crude oil prices
Location: Cameroon India Gabon United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776426836
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776426836?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Coming to the Oil Patch: Bad Loans to Outnumber the Good; Bad loans are likely to outnumber good ones soon in the U.S. oil patch, an indication of the pressure on energy companies and their lenders from the crash in prices.
Author: Olson, Bradley; Glazer, Emily; Jarzemsky, Matt
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
About 1.5% to 3% of the loan portfolios of Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo were outstanding to the oil-and-gas sector in January, according to Goldman Sachs Group Inc. and Evercore ISI.
Full text: Bad loans are likely to outnumber good ones soon in the U.S. oil patch, an indication of the pressure on energy companies and their lenders from the crash in prices. The number of energy loans labeled as "classified," or in danger of default, is on course to extend above 50% this year at several major banks, including Wells Fargo & Co. and Comerica Inc., according to bankers and others in the industry. In response, several major banks are reducing their exposure to the energy sector by attempting to sell off souring loans, declining to renew them or clamping down on the ability of oil and gas companies to tap credit lines for cash, according to more than a dozen bankers, lawyers and others familiar with the plans. The pullback is curtailing the flow of money to companies struggling to survive a prolonged stretch of low prices, likely quickening the path to bankruptcy for some firms. Fifty-one North American oil-and-gas producers have already filed for bankruptcy protection since the start of 2015, cases totaling $17.4 billion in cumulative debt, according to law firm Haynes and Boone LLP. That trails the number from September 2008 to December 2009 during the global economic downturn, when there were 62 filings, but is expected to grow: About 175 companies are at high risk of not being able to meet loan covenants, according to Deloitte LLP. "This has the makings of a gigantic funding crisis" for energy companies, said William Snyder, head of Deloitte's U.S. restructuring unit. If oil prices, which closed at $39.79 a barrel Wednesday, remain at roughly $40 a barrel this year, "that's fairly catastrophic." While U.S. oil prices have rebounded from their February low of $26.21, they remain down about 35% from last year's highs amid a global glut of supply and continuing strong production. The labeling of more loans as troubled started late last year with a push by the Office of the Comptroller of the Currency to get banks to be tougher in evaluating which oil and gas loans are likely to pay out. Earlier this month, the OCC published an updated manual for energy lending that establishes stricter guidelines for loans tied to future oil-and-gas production. One guideline directed banks to classify loans as "substandard and worse" if the creditor has debt generally more than four times greater than operating income. That high a ratio was rare when crude prices began to plunge in 2014 but will be the average across the sector by the end of the year, estimates energy investment bank Tudor Pickering Holt & Co. The updated manual follows a series of calls in recent weeks between the OCC and banks around energy lending guidelines, people familiar with the calls said. Many of the souring energy loans are revolving-credit facilities, backed by future barrels of oil and gas, which are typically used by companies for short-term needs. Usually, around a half dozen banks share the risk on the "revolvers," reducing exposure. Although some bank loans may be replaced by debt from hedge funds or private equity, many of those firms will invest with an eye toward eventually taking over assets, said bankers and potential buyers. The prices being discussed include a discount to the loan value in the range of 65 to 90 cents on the dollar, potential buyers said. Global oil-and-gas sector debt totaled $3 trillion in 2014, three times what it was at the end of 2006, according to the most recent figures from the Bank for International Settlements, a central-banking group based in Switzerland. The oil-price plunge has worsened the financial picture for energy borrowers and lenders around the world because it directly affects the value of oil reserves and other assets backing some of the debt. The situation is particularly acute in the U.S., where many small and midsize companies borrowed heavily to expand during the shale boom and are now weighed down with debt as low oil and gas prices have made their assets unprofitable to produce. Regional banks that lent heavily to energy companies have the most concentrated exposure. While the biggest U.S. banks have already set aside hundreds of millions of dollars for potential losses, their lending to the sector is a smaller part of their overall business. About 1.5% to 3% of the loan portfolios of Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo were outstanding to the oil-and-gas sector in January, according to Goldman Sachs Group Inc. and Evercore ISI. "I'm not worried about it bringing the industry down," said Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., in an interview. "We may have a bank failure but it should be one-off." However, the lending shakeout could be significant for U.S. oil-and-gas producers, which face a biannual review by banks of their reserves that is widely expected to curtail their revolving credit lines. That credit, which has been critical for capital flexibility in the downturn, may be cut 20% to 30%, analysts said. James J. Volker, chief executive of Whiting Petroleum Corp., one of the biggest producers in North Dakota's Bakken formation, said at a Denver conference this month that he expected the company's credit line to be reduced by $1 billion, or more than a third. Still, he said he was optimistic Whiting would weather the storm, adding that the company was "well within" all of its covenants with lenders. "Time is on our side at Whiting," Mr. Volker said. "We have over 6,000 drilling locations in the Williston basin...so basically a large treasure trove, if you will, of locations to drill." When Oasis Petroleum Inc., Denbury Resources Inc. and Clayton Williams Energy Inc. asked for amendments to their loans in recent weeks, banks negotiated "anti-cash-hoarding" provisions requiring the companies to use extra cash to repay the balance on their credit lines in exchange, according to regulatory filings. The trend follows a spate of oil-and-gas borrowers maxing out credit lines, in some cases weeks before they warned they may not be able to continue operating. Clayton Williams Energy secured an amendment to its credit line this month that eased caps on indebtedness, before borrowing $350 million from asset-management firm Ares Management and others. In exchange, the company agreed to use any available cash in excess of $30 million to pay down its credit line, led by J.P. Morgan. The credit facility was reduced to $100 million from $450 million. The loan has an interest rate of 12.5%, about four times the prevailing interest. It also came with the right to buy more than two million shares of Clayton Williams and appoint two people to the company's board. A spokeswoman for Clayton Williams declined to comment. -Erin Ailworth, Rachel Louise Ensign and Selina Williams contributed to this article. Credit: By Bradley Olson, Emily Glazer and Matt Jarzemsky
Subject: Bankruptcy; Petroleum industry; Banking industry; Loans; Regional banks; Lines of credit; Crude oil prices; Energy industry; Natural gas utilities
Location: United States--US
Company / organization: Name: Comerica Inc; NAICS: 522110, 551111; Name: Wells Fargo & Co; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economic s
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776426928
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776426928?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Where Oil Workers Have Job Security: China; Profits are plunging at China's largest oil companies but government concerns about unrest discourage layoffs
Author: Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
Both PetroChina and Exxon Mobil Corp., for example, run world-wide operations, with big refining arms and networks of retail gas stations that provide diverse sources of revenue. Exxon, Royal Dutch Shell PLC and Chevron Corp. all reported their weakest profits in more than a decade in 2015.
Full text: BEIJING--High on the Chinese government's priority list is building leaner, more competitive state companies. But the dismal earnings reported by national oil giants in recent days underscore the difficulties in meeting that goal. These companies are maintaining large workforces even as Western peers continue to slash payrolls in response to the collapse in oil prices . The listed units of China's big three oil companies reported sharply lower earnings for 2015. Net profit fell by 32% at China Petroleum & Chemical Corp., also known as Sinopec, 66% at Cnooc Ltd. and 67% at PetroChina Co., compared with 2014. Unlike many of their big global competitors, Chinese oil companies have been slower to trim costs to boost their profits. The firms have kept in step with the rest of the industry by reducing spending on exploration and other new investment to increase profits, but cost-cutting largely stopped when it came to payrolls with as many as hundreds of thousands of employees. The lower earnings combined with a dim outlook for 2016 illustrate the bind the Chinese government's demands is placing on large state-owned companies. On one hand, the government's economic agenda calls for the firms to restructure --and increase profits. At the same time, cutting jobs isn't an option, given the Chinese leadership's concerns about unrest as the economy continues to slow after years of high growth. "They're getting pressured on both sides," said Neil Beveridge, an analyst at Bernstein Research in Hong Kong. Evidence of the government's skittishness about layoffs has been on wide display. When workers at a large state-run coal company took to the streets to complain of unpaid wages earlier this month, the government rushed to make payments . A week before that, the Communist Party secretary of China's biggest oil field, Daqing, lamented to President Xi Jinping how cheap global oil prices had crushed profit. At a meeting during the legislature's annual session in Beijing, Jiang Wanchun reported that Daqing, which is owned by PetroChina, lost around $800 million in the first two months of 2016, according to an account in the official newspaper of Heilongjiang province where Daqing is located. He noted that Daqing produced oil at $45 per barrel. That is higher than international benchmarks that are hovering below $40 per barrel . In response, Mr. Xi expressed concern over employment at Daqing, home to tens of thousands of PetroChina employees. "Today's economic restructuring cannot come at the cost of workers' well-being," the newspaper reported Mr. Xi as telling Mr. Jiang. "We must guarantee the incomes and treatment of the front-line employees." Mr. Jiang assured the Chinese leader that PetroChina workers weren't at risk of getting fired. State companies dominate critical sectors, from energy to banking to telecommunications, and for decades the leadership has relied on them to balance profits with political interests. That remains paramount even as an overhaul plan unveiled last year calls for restructuring state firms so that they rely less on government support and improve their competitiveness overseas while maintaining their dominance in China. Leaders "made it quite clear that they want these companies to be policy tools if and when needed. They've indicated there aren't going to be more layoffs," said Michal Meidan, a China oil expert at consultancy Energy Aspects in London. While China's oil giants are among the most global of state companies, their role as job creators has led to workforces and operating expenditures that far exceed their international peers. Both PetroChina and Exxon Mobil Corp., for example, run world-wide operations, with big refining arms and networks of retail gas stations that provide diverse sources of revenue. Exxon and PetroChina both reported about $260 billion in operating revenue. Yet, Exxon's net profit of $16 billion in 2015 was roughly three times PetroChina's. When it comes to employees, PetroChina has more than 500,000, compared with the fewer than 75,000 at Exxon. The oil-price rout hasn't been pretty for big Western oil companies either. Exxon, Royal Dutch Shell PLC and Chevron Corp. all reported their weakest profits in more than a decade in 2015. BP PLC suffered a hefty $5.2 billion loss , comparable to the mammoth hit the U.K. oil giant took following its 2010 blowout in the Gulf of Mexico. This year alone, the four major oil companies between them have unveiled plans to slash spending by nearly $20 billion and committed to cutting more than 10,000 jobs, building on thousands of layoffs already announced last year. At a news conference last week to discuss earnings and assess the outlook for 2016, PetroChina executives said large-scale layoffs weren't in the plans, though some employees would be targeted for early retirement. In a written response to questions, Sinopec, which reported earnings Tuesday, said no employees have been laid off since late 2014 when global oil prices began to fall, and it had "no plan for any future layoffs." The company employs about 351,000 people. For the No. 3 oil producer, Cnooc, layoffs among its 15,000-strong workforce have mainly hit overseas personnel. While the company pared its workforce at its Canada-based Nexen unit, it added more than 1,000 new employees in China in 2015, company filings show. With layoffs off the table, analysts expect cost-cutting will likely focus on previously announced divestment of stakes in noncore assets--such as pipelines, in PetroChina's case. Such measures are only temporary fixes if China wants to build truly efficient and better-performing state-owned enterprises, said Ms. Meidan. "Ultimately if they want something more efficient, then some of these assets will have to be cut down," she said. So far, she said, that doesn't seem to be a priority for Mr. Xi. Sarah Kent contributed to this article. Write to Brian Spegele at brian.spegele@wsj.com Credit: By Brian Spegele
Subject: Profits; Petroleum industry; Energy economics; Layoffs
Location: China
Company / organization: Name: China Petroleum & Chemical Corp; NAICS: 211111; Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuestdocument ID: 1776426941
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776426941?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Judge Says Emerald Oil Can Tap Bankruptcy Loan; Emerald Oil Inc. can begin using its bankruptcy financing as it gears up for a coming sale process.
Author: Rizzo, Lillian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
Along with Emerald and Magnum, other oil and gas companies to recently file for chapter 11 after suffering from the oil price downturn include Swift Energy Co., Quicksilver Resources Inc., Sabine Oil & Gas Co., American Eagle Energy Corp. and Samson Resources Corp. On Thursday, the price for benchmark West Texas crude fell to $39.58 a barrel, following the release of U.S. supply data that showed increasing stockpiles and high production. http://www.emeraldoil.com http://www.latiumenterprises.com Write to Lillian Rizzo at Lillian.Rizzo@wsj.com Credit: By Lillian Rizzo
Full text: Emerald Oil Inc. can begin using its bankruptcy financing as it gears up for a coming sale process. The latest oil and gas company to file for chapter 11 won approval from Judge Kevin Gross in the U.S. Bankruptcy Court in Wilmington, Del., on Thursday to use $7.5 million of the proposed $130 million bankruptcy loan it lined up with its creditors before filing for chapter 11. "The [bankruptcy] financing will bridge us to a sale as a going concern," said Ryan Blaine Bennett, a lawyer for Emerald. Emerald's attorneys said during the hearing that the company had approximately $3 million in liquidity, with access to no other funds, and would use the $7.5 million to tide it over until the final hearing to fully access the bankruptcy loan. The $130 million financing includes $20 million in new capital from its lenders and the rest rolls up its pre-bankruptcy debt. Emerald owes it senior lenders about $111 million and about $148.5 million to bondholders, according to court filings. Emerald Oil filed for chapter 11 protection on Tuesday with plans to sell itself in a bankruptcy-run auction. The company is already in talks with British businessman Brian Kennedy's Latium Group as a potential stalking horse, or lead, bidder. On Wednesday, Latium and Emerald signed a nonbinding term sheet for a deal, according to court papers. The milestones set forth by the bankruptcy financing call for the company to be sold in four months, and Emerald's lawyers said they are already at work on nondisclosure agreements with potential buyers. The Denver-based company, which primarily has operations in North Dakota, estimated in court papers its assets are worth about $291 million, which includes only $28 million in current assets. Emerald, like many of its peers that have filed for bankruptcy, blamed its woes on the falling oil and gas prices. The company's lawyers pointed to Magnum Hunter Resources Corp., another oil and gas exploration company whose bankruptcy case is being overseen by Judge Gross. "As you're also aware from Magnum, oil and gas companies require a significant amount of capital raised, either from secured financing or bonds," said Mr. Bennett. "In this case the secured financing is backed up by the reserves. The value is tied to the commodity price, and that has suffered a sustained downturn." Along with Emerald and Magnum, other oil and gas companies to recently file for chapter 11 after suffering from the oil price downturn include Swift Energy Co., Quicksilver Resources Inc., Sabine Oil & Gas Co., American Eagle Energy Corp. and Samson Resources Corp. On Thursday, the price for benchmark West Texas crude fell to $39.58 a barrel, following the release of U.S. supply data that showed increasing stockpiles and high production. http://www.emeraldoil.com http://www.latiumenterprises.com Write to Lillian Rizzo at Lillian.Rizzo@wsj.com Credit: By Lillian Rizzo
Subject: Bankruptcy reorganization; Bankruptcy; Petroleum industry; Court hearings & proceedings
Company / organization: Name: Samson Resources Corp; NAICS: 211111; Name: American Eagle Energy Inc; NAICS: 211111, 211112; Name: Quicksilver Resources Inc; NAICS: 211111; Name: Swift Energy Co; NAICS: 211111; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776427001
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776427001?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Hastings Equity Acquires Cactus Fuel; Hastings Equity Partners invested in oil-field service provider Cactus Fuel LLC.
Author: Vemuri, Chitra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Mar 2016: n/a.
Abstract:
Hastings Equity Partners invested in oil-field service provider Cactus Fuel LLC.
Full text: Hastings Equity Partners invested in oil-field service provider Cactus Fuel LLC. Founded in 2012 and based in Midland, Texas, Cactus Fuel distributes fuel and lubricants to upstream and midstream customers in the Permian Basin. Hastings Equity's investment in Cactus Fuel is the firm's fifth platform investment from Hastings Equity Fund III LP, a $172 million fund closed in 2014. Additional financial terms of the deal weren't disclosed. PNC Financial Services Group provided financing for the transaction. Riveron Consulting LLC and Locke Lord LLP provided advisory services to Hastings. GulfStar Group advised Cactus Fuel shareholders. Hastings Equity, of Needham, Mass., makes equity investments of $5 million to $20 million in lower-midmarket energy services and equipment businesses with trailing earnings before interest, taxes, depreciation and amortization of $4 million to $15 million. The firm in 2015 acquired Hybrid Tool Solutions LLC, a provider of tools for drilling out fracking plugs to the oil and gas industry. http://www.hastingsequity.com Credit: By Chitra Vemuri
Subject: Acquisitions & mergers; Equity
Location: Texas Permian Basin
Company / organization: Name: PNC Financial Services Group Inc; NAICS: 522110, 522292, 523120, 523930, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 29, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776434854
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776434854?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission o f copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Where Oil Workers Have Job Security: China; Profits are plunging at China's largest oil companies but government concerns about unrest discourage layoffs
Author: Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
Both PetroChina and Exxon Mobil Corp., for example, run world-wide operations, with big refining arms and networks of retail gas stations that provide diverse sources of revenue. Exxon, Royal Dutch Shell PLC and Chevron Corp. all reported their weakest profits in more than a decade in 2015.
Full text: BEIJING--High on the Chinese government's priority list is building leaner, more competitive state companies. But the dismal earnings reported by national oil giants in recent days underscore the difficulties in meeting that goal. These companies are maintaining large workforces even as Western peers continue to slash payrolls in response to the collapse in oil prices . The listed units of China's big three oil companies reported sharply lower earnings for 2015. Net profit fell by 32% at China Petroleum & Chemical Corp., also known as Sinopec, 66% at Cnooc Ltd. and 67% at PetroChina Co., compared with 2014. Unlike many of their big global competitors, Chinese oil companies have been slower to trim costs to boost their profits. The firms have kept in step with the rest of the industry by reducing spending on exploration and other new investment to increase profits, but cost-cutting largely stopped when it came to payrolls with as many as hundreds of thousands of employees. The lower earnings combined with a dim outlook for 2016 illustrate the bind the Chinese government's priorities is placing on large state-owned companies. On one hand, the government's economic agenda calls for the firms to restructure --and increase profits. At the same time, cutting jobs isn't an option, given the Chinese leadership's concerns about unrest as the economy continues to slow after years of high growth. "They're getting pressured on both sides," said Neil Beveridge, an analyst at Bernstein Research in Hong Kong. Evidence of the government's skittishness about layoffs has been on wide display. When workers at a large state-run coal company took to the streets to complain of unpaid wages earlier this month, the government rushed to make payments . A week before that, the Communist Party secretary of China's biggest oil field, Daqing, lamented to President Xi Jinping how cheap global oil prices had crushed profit. At a meeting during the legislature's annual session in Beijing, Jiang Wanchun, Communist Party secretary of Daqing oilfield, reported that Daqing, which is owned by PetroChina, lost around $800 million in the first two months of 2016, according to an account in the official newspaper of Heilongjiang province where Daqing is located. He noted that Daqing produced oil at $45 per barrel. That is higher than international benchmarks that are hovering below $40 per barrel . In response, Mr. Xi expressed concern over employment at Daqing, home to tens of thousands of PetroChina employees. "Today's economic restructuring cannot come at the cost of workers' well-being," the newspaper reported Mr. Xi as telling Mr. Jiang. "We must guarantee the incomes and treatment of the front-line employees." Mr. Jiang assured the Chinese leader that PetroChina workers weren't at risk of getting fired. State companies dominate critical sectors, from energy to banking to telecommunications, and for decades the leadership has relied on them to balance profits with political interests. That remains paramount even as an overhaul plan unveiled last year calls for restructuring state firms so that they rely less on government support and improve their competitiveness overseas while maintaining their dominance in China. Leaders "made it quite clear that they want these companies to be policy tools if and when needed. They've indicated there aren't going to be more layoffs," said Michal Meidan, a China oil expert at consultancy Energy Aspects in London. While China's oil giants are among the most global of state companies, their role as job creators has led to workforces and operating expenditures that far exceed their international peers. Both PetroChina and Exxon Mobil Corp., for example, run world-wide operations, with big refining arms and networks of retail gas stations that provide diverse sources of revenue. Exxon and PetroChina both reported about $260 billion in operating revenue. Yet, Exxon's net profit of $16 billion in 2015 was roughly three times PetroChina's. When it comes to employees, PetroChina has more than 500,000, compared with the fewer than 75,000 at Exxon. The oil-price rout hasn't been pretty for big Western oil companies either. Exxon, Royal Dutch Shell PLC and Chevron Corp. all reported their weakest profits in more than a decade in 2015. BP PLC suffered a hefty $5.2 billion loss , comparable to the mammoth hit the U.K. oil giant took following its 2010 blowout in the Gulf of Mexico. This year alone, the four major oil companies between them have unveiled plans to slash spending by nearly $20 billion and committed to cutting more than 10,000 jobs, building on thousands of layoffs already announced last year. At a news conference last week to discuss earnings and assess the outlook for 2016, PetroChina executives said large-scale layoffs weren't in the plans, though some employees would be targeted for early retirement. In a written response to questions, Sinopec, which reported earnings Tuesday, said no employees have been laid off since late 2014 when global oil prices began to fall, and it had "no plan for any future layoffs." The company employs about 351,000 people. For the No. 3 oil producer, Cnooc, layoffs among its 15,000-strong workforce have mainly hit overseas personnel. While the company pared its workforce at its Canada-based Nexen unit, it added more than 1,000 new employees in China in 2015, company filings show. With layoffs off the table, analysts expect cost-cutting will likely focus on previously announced divestment of stakes in noncore assets--such as pipelines, in PetroChina's case. Such measures are only temporary fixes if China wants to build truly efficient and better-performing state-owned enterprises, said Ms. Meidan. "Ultimately if they want something more efficient, then some of these assets will have to be cut down," she said. So far, she said, that doesn't seem to be a priority for Mr. Xi. Sarah Kent contributed to this article. Write to Brian Spegele at brian.spegele@wsj.com Credit: By Brian Spegele
Subject: Profits; Petroleum industry; Energy economics; Layoffs; Political parties
Location: China
Company / organization: Name: China Petroleum & Chemical Corp; NAICS: 211111; Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776489530
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776489530?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Futures Snap Five-Day Losing Streak in Asian Trade; May Brent crude on London's ICE Futures exchange rose 32 cents, or 0.8%, to $39.46 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
A springtime slowdown in demand from refineries around the world is also likely to keep a cap on crude prices in the short term, said Virendra Chauhan, oil analyst at Energy Aspects in Singapore.
Full text: Oil futures rose in Asian trading hours Wednesday, as traders tapped the brakes on a five-day streak of losses in the crude market. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $38.69 a barrel, up 41 cents, or 1%, in the Globex electronic session. May Brent crude on London's ICE Futures exchange rose 32 cents, or 0.8%, to $39.46 a barrel. Wednesday's climb marked a reprieve from the steady decline in oil prices in recent days. Before Wednesday, Nymex crude shed 7.6% in the prior five sessions as market participants raised doubts about an April 17 meeting of major oil exporters in Qatar. The countries are set to discuss a supply freeze at January levels, but actions by Iran and Kuwait have raised questions about those countries' willingness to participate. A springtime slowdown in demand from refineries around the world is also likely to keep a cap on crude prices in the short term, said Virendra Chauhan, oil analyst at Energy Aspects in Singapore. "All the way through [the second quarter] you will get seasonally lower demand from refineries," he said. "We expect the downward pressure to remain." Looking ahead, the U.S. trading day will bring closely watched data on U.S. oil and fuel inventories from the Energy Information Administration. Global oil stockpiles are near record highs, and U.S. crude inventories are at the highest level in more than 80 years. Analysts surveyed by The Wall Street Journal expect the data to show a 3.5 million-barrel increase in U.S. stockpiles. The American Petroleum Institute, an industry group, projected inventories last week rose by 2.6 million barrels. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--rose 31 points to $1.4569 a gallon, while April diesel traded at $1.1716, 161 points higher. ICE gas oil for April changed hands at $349.75 a metric ton, up $8.25 from Tuesday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Petroleum refineries; Petroleum industry; Inventory; Crude oil prices
Location: Iran United States--US Kuwait Qatar
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776526736
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776526736?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Energy: Global Explorers Face Challenge To Secure Financing Amid Oil Rout --- Banks point to rising debt taken on by these companies as a cause for concern
Author: Williams, Selina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Mar 2016: B.7.
Abstract:
The stakes were underscored in February when First Oil Expro, a subsidiary of the largest privately owned U.K. North Sea oil producer, called in the administrators -- a process similar to filing for chapter 11 bankruptcy in the U.S. First Oil Expro was unable to meet its share of costs on one big development and was unable to keep up payments on loans in excess of $150 million.
Full text: LONDON -- Just a few years ago, when oil sold for about $100 a barrel, banks here were lining up to give international oil explorers access to billions of dollars to finance new drilling and projects. But as oil prices stay mired in a funk, the money is drying up. Senior executives from companies such as Tullow Oil PLC and Cairn Energy PLC have been meeting with their bankers for a biannual review of the loans that allow them to keep drilling and building out projects. For many European companies, it has been a nail-biting experience, as banks worry about the growing pile of debt taken on by oil companies with little or no profits. Several companies said they expect their ability to tap credit lines to be diminished after the reviews. Some lenders have brought in teams that specialize in corporate restructuring to scrutinize companies' balance sheets, spending and assets, though not at Tullow or Cairn, a person familiar with the matter said. In the past, the reviews were generally conducted solely by banks' energy specialists. The new scrutiny in Europe comes as oil-company debt emerges as an issue across the world with prices for crude near $40 a barrel -- down more than 60% from June 2014. Globally, the net debt of publicly listed oil and gas companies has nearly tripled over the past decade to $549 billion in 2015, excluding state-owned oil companies, according to Wood Mackenzie, the energy consultancy. Reviews of these loans have high stakes. If a bank decides a company has already borrowed more than it can afford, the reviews could trigger a repayment, more cost cuts or even a fire sale of assets to raise cash. Many of the reviews have concluded, or will soon, and the results could be known as soon as this week. "There isn't anyone in the oil independent sector that will be very relaxed at the moment," said Thomas Bethel, a partner specializing in energy finance at Herbert Smith Freehills LLP. Oil companies are facing a similar set of biannual reviews in the U.S., where many small and midsize companies borrowed heavily to expand during the shale boom. The number of energy loans deemed in danger of default is on course to extend above 50% at several major U.S. banks, The Wall Street Journal reported last week. But some American firms have been able to raise cash by issuing new stock or selling new debt, while in recent years Europe-based explorers have come to rely more on bank lending as investors that once pumped up the industry are fleeing in droves. In Europe, the focus is on a specialized type of borrowing known as reserves-based lending that has mushroomed in recent years. Europe's top 10 non-state-owned oil companies have taken on over $12 billion in such loans, which are particularly exposed to energy prices as they are secured against the value of a company's petroleum reserves and future production. At Tullow, Chief Financial Officer Ian Springett said he thinks the company could lose some ability to draw on its $3.7 billion credit line with its banks. Cairn expects its banks will allow it access to only about $335 million of the $400 million in credit that was once available. "When oil was at $100 a barrel, debt was easy to get," Cairn Chief Executive Simon Thomson said in an interview. "What we're seeing today is a number of people suffering the hangover of having secured that debt and now possibly having trouble servicing it." The stakes were underscored in February when First Oil Expro, a subsidiary of the largest privately owned U.K. North Sea oil producer, called in the administrators -- a process similar to filing for chapter 11 bankruptcy in the U.S. First Oil Expro was unable to meet its share of costs on one big development and was unable to keep up payments on loans in excess of $150 million. "The key issue around First Oil Expro's demise was the sharp fall in the oil price which led to a significant loss of confidence in the sector," said Jim Tucker, joint administrator of First Oil Expro and restructuring partner at KPMG. The oil-company debt reviews come at a tough time for oil explorers that aren't brand names but take risks to open up fields in risky regions that bigger companies such as Exxon Mobil Corp. often tap into later, such as Kurdistan in Iraq. Investors pulled back from these companies as oil prices fell, sending share prices into the basement. That crimped their ability to raise cash by issuing new stock or selling new debt, such as corporate bonds, analysts say. The explorers' revenues also fell, and many had to cut the value of their fields and reserves. Some factors are working in the energy companies' favor. Banks have an incentive not to turn the screws too tightly on oil companies, forcing them out of business and into default on loans. Several companies also have oil and gas fields that are set to begin production soon and provide a jolt of cash. At Tullow, Mr. Springett said the company was on firm ground because a large oil field in Ghana is due to begin pumping later this year. And Cairn is developing fields in the U.K. North Sea that are due to come onstream next year, Mr. Thomson said. Credit: By Selina Williams
Subject: Petroleum industry; Prices; Debt restructuring; Lines of credit; Natural gas utilities
Location: Europe
Company / organization: Name: Herbert Smith Freehills LLP; NAICS: 541110; Name: Cairn Energy PLC; NAICS: 211111; Name: Tullow Oil PLC; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.7
Publication year: 2016
Publication date: Mar 30, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776591683
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776591683?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Energy: China's Oil Firms Cut Spending, But Not Jobs
Author: Spegele, Brian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Mar 2016: B.7.
Abstract:
A week before that, the Communist Party secretary of China's biggest oil field, Daqing, lamented to President Xi Jinping how cheap global oil prices had crushed profit.
Full text: BEIJING -- High on the Chinese government's priority list is building leaner, more competitive state companies. But the dismal earnings reported recently by national oil giants underscore the difficulties in meeting that goal. These companies are maintaining large workforces even as Western peers continue to cut payrolls in response to the collapse in oil prices. The listed units of China's big three oil companies reported sharply lower earnings for 2015. Net profit fell by 32% at China Petroleum & Chemical Corp., also known as Sinopec, 66% at Cnooc Ltd., and 67% at PetroChina Co., compared with 2014. Unlike many of their big global competitors, Chinese oil companies have been slower to trim costs to boost their profits. The firms have kept in step with the rest of the industry by reducing spending on exploration and other new investment to increase profits, but their cost-cutting largely stopped when it came to payrolls with as many as hundreds of thousands of employees. The lower earnings combined with a dim outlook for 2016 illustrate the bind the government's priorities are placing on large state-owned companies. On one hand, the government's agenda calls for the firms to restructure -- and increase profits. At the same time, cutting jobs isn't an option, given the leadership's concerns about unrest as the economy continues to slow down after years of high growth. "They're getting pressured on both sides," said Neil Beveridge, an analyst at Bernstein Research in Hong Kong. Evidence of the government's skittishness about layoffs has been on wide display. When workers at a large state-run coal company took to the streets to complain of unpaid wages this month, the government rushed to make payments. A week before that, the Communist Party secretary of China's biggest oil field, Daqing, lamented to President Xi Jinping how cheap global oil prices had crushed profit. At a meeting during the legislatures annual session in Beijing, Jiang Wanchun, the Communist Party secretary, reported that Daqing, which is owned by PetroChina, had a loss of around $800 million in the first two months of 2016, according to an account in the official newspaper of Heilongjiang province where Daqing is located. He noted that Daqing produced oil at $45 a barrel, higher than international benchmarks below $40. In response, Mr. Xi expressed concern over employment at Daqing, home to tens of thousands of PetroChina employees. "Today's economic restructuring cannot come at the cost of workers' well-being," the newspaper reported Mr. Xi as telling Mr. Jiang. Mr. Jiang assured the Chinese leader that PetroChina workers weren't at risk of getting fired. State companies dominate critical sectors, and for decades the leadership has relied on them to balance profits with political interests. That remains paramount even as an overhaul plan calls for restructuring state firms so they rely less on government and improve their competitiveness overseas. Credit: By Brian Spegele
Subject: Petroleum industry; Profits; Political parties
Location: China
Company / organization: Name: China Petroleum & Chemical Corp; NAICS: 211111; Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.7
Publication year: 2016
Publication date: Mar 30, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776593842
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776593842?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Give Up Gains; Crude stockpiles increase by smaller-than-expected amount
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
[...]stockpiles are still near record highs and the EIA data show refiners ramping up strongly, suggesting the oil industry is still willing to send more oil and gasoline onto already flooded markets, said Donald Morton, senior vice president at Herbert J. Sims & Co., who runs an energy-trading desk.
Full text: Oil prices inched higher Wednesday but sold off through most of the afternoon with opinions divided about the latest addition to U.S. stockpiles. The U.S. Energy Information Administration said Wednesday that stockpiles rose, but by less than analysts had expected, initially adding to overnight gains. But stockpiles are still near record highs and the EIA data show refiners ramping up strongly, suggesting the oil industry is still willing to send more oil and gasoline onto already flooded markets, said Donald Morton, senior vice president at Herbert J. Sims & Co., who runs an energy-trading desk. "More juice is coming," he added. Light, sweet crude for May delivery settled up 4 cents, or 0.1%, at $38.32 a barrel on the New York Mercantile Exchange. Prices had peaked nearly 4% higher at $39.85 a barrel just after EIA's inventory data release at 10:30 a.m. EDT. Brent, the global benchmark, gained 12 cents, or 0.3%, to $39.26 a barrel on ICE Futures Europe. It had peaked at $40.61. Brent snapped a four-session losing streak, while U.S. oil halted its losing streak at five sessions. Oil's monthlong rally has been losing steam in recent days after widespread warnings that stockpiles are still too high to justify a rebound in prices. U.S. crude inventories are at their highest levels in more than 80 years. EIA said combined stocks of gasoline and distillate, which include heating oil and diesel, fell by 3.6 million barrels, about 600,000 more than analysts had expected. That drain was also larger than the addition to crude stockpiles, 2.3 million barrels, compared with analysts' expectations for a 3.5-million-barrel addition. Despite the drain on gasoline stockpiles, gasoline futures were the worst performers in the crude complex Wednesday, settling down 1.74 cents, or 1.2%, at $1.4364. Refinery usage climbed 2 percentage points to 90.4%, suggesting refiners may continue delaying maintenance and keep gasoline supplies coming, Mr. Morton said. Traders who move based on charts and momentum also added to the selloff, said Ric Navy, senior vice president for energy futures at brokerage R.J. O'Brien & Associates LLC. The inventory numbers weren't far enough from expectations to get traders to reassess the country's supply and demand, so they focused on crude's inability to break past recent highs, according to Mr. Navy. "There's nothing earth-moving here right now," in the new inventory figures, he said. In the morning, oil had been closely tied to the dollar. It had been on a rally since Tuesday afternoon, when Federal Reserve Chairwoman Janet Yellen reiterated her cautious stance on the global economy and pointed to a slower path in raising interest rates. That has sent the dollar lower , a move that often pushes oil higher. Crude is priced in dollars and becomes more attractive for holders of other currencies when the U.S. unit declines. On Wednesday, The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, fell 0.4%. It pared those losses some just before 11 a.m. and crude then began to pare some of its gains. "We're living off the Fed's words (and) the dollar," said Dean Hazelcorn, trader at the brokerage Coquest Inc. in Dallas. Diesel futures fell 0.42 cent, or 0.4%, to $1.1597 cents a gallon. Georgi Kantchev contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Petroleum industry; Inventory; Futures; Price increases
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776606900
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776606900?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Sandridge Energy Plans 60% Cut in Capital Spending; Oil and gas explorer Sandridge Energy reported a sharp fourth-quarter revenue decline and said it will cut 2016 capital spending by 60%.
Author: Beckerman, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
Oil and gas explorer Sandridge Energy Inc. reported a sharp fourth-quarter revenue decline and said it will cut 2016 capital spending by 60%. Since September, Sandridge has suspended dividends on two kinds of preferred stock, hired advisers to consider strategic alternatives and deferred a $21.7 million interest payment to bondholders, which was paid within the grace period.
Full text: Oil and gas explorer Sandridge Energy Inc. reported a sharp fourth-quarter revenue decline and said it will cut 2016 capital spending by 60%. Since September, Sandridge has suspended dividends on two kinds of preferred stock, hired advisers to consider strategic alternatives and deferred a $21.7 million interest payment to bondholders, which was paid within the grace period. On March 16, the Oklahoma City company said it would delay its 2015 annual report. Sandridge said that amid "uncertainty regarding potential strategic alternatives" to reduce debt, it expects the annual report will include a warning about its ability to continue as a going concern. Last year, Sandridge repurchased notes in transactions that Standard & Poor's Ratings Services and Moody's Investors Service categorized as distressed exchanges. Sandridge said Tuesday that it plans capital spending of $285 million this year, "ensuring liquidity while advancing our operations with one rig in each of our plays." Analysts have warned that more bankruptcy filings in the sector are likely amid a severe, prolonged downturn in prices. Companies including Samson Resources Corp., Magnum Hunter Resources Corp., Emerald Oil Inc. and Swift Energy Co. have sought bankruptcy protection. For the quarter ended Dec. 31, Sandridge posted a net loss of $653.7 million, or $1.13 a share, compared with a profit of $265.2 million, or 48 cents a share, a year earlier. Loss excluding items was $73.5 million, or nine cents a share, compared with a profit excluding items of $44.1 million, or eight cents a share, a year earlier. Revenue fell 59% to $143.6 million. Sandridge shares recently traded at 11 cents. The stock was delisted from the New York Stock Exchange in January. Write to Josh Beckerman at josh.beckerman@wsj.com Credit: By Josh Beckerman
Subject: Net losses; Bankruptcy; Financial performance
Location: Oklahoma
Company / organization: Name: Swift Energy Co; NAICS: 211111; Name: Emerald Oil Inc; NAICS: 211111; Name: Samson Resources Corp; NAICS: 211111; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450; Name: New York Stock Exchange--NYSE; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776611638
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776611638?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Exco Resources Releases Reduced Capital Spending Plan; Oil and natural gas developer Exco Resources reduced its capital budget and said its lenders cut its borrowing base due to low commodity prices.
Author: Hufford, Austen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
Oil and natural gas developer Exco Resources Inc. released a reduced capital spending plan and said its lenders had cut its borrowing base due to continually low commodity prices.
Full text: Oil and natural gas developer Exco Resources Inc. released a reduced capital spending plan and said its lenders had cut its borrowing base due to continually low commodity prices. Exco said it had a capital budget of $85 million, down 69% from 2015. It will "significantly reduce" its drilling activity and is "deferring a significant amount" of its drilling inventory until commodity prices increase. The energy company said its lenders had cut its borrowing base to $325 million, down from $375 million previously, during a regular redetermination process. Natural gas prices declined 23% over the same period. Chief Executive Harold Hickey said the company "appreciates" the bank group support and that Exco is focused on "preserving liquidity and minimizing capital expenditures." The company said it plans on drilling seven wells and completing fifteen wells in the year, focusing on North Louisiana and East Texas. In October Canadian financier Prem Watsa lent Exco $300 million. The loan was part of a $591 million loan package Exco designed to bolster its balance sheet. Shares have fallen 7.4% in the last three months and were inactive in premarket trading. Write to Austen Hufford at austen.hufford@wsj.com Credit: By Austen Hufford
Subject: Petroleum industry; Natural gas prices
Location: East Texas
Company / organization: Name: Exco Resources Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776622470
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journa l
Shell Under Investigation in Italy Over Nigerian Oil Deal; Anglo-Dutch oil giant drawn into corruption probe that has dogged Italy's Eni
Author: Sylvers, Eric; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
Italian prosecutors are investigating Royal Dutch Shell PLC's involvement in a Nigerian oil deal, a person familiar with the matter said, drawing the oil company into a corruption probe that has dogged Italy's energy giant Eni SpA.
Full text: Italian prosecutors are investigating Royal Dutch Shell PLC's involvement in a Nigerian oil deal, a person familiar with the matter said, drawing the oil company into a corruption probe that has dogged Italy's energy giant Eni SpA. The prosecutors are investigating whether Shell's piece of a $1.3 billion payment to acquire a rich oil field off the coast of Nigeria constituted a bribe, according to a person familiar with the probe. Italian and Dutch police last month raided Shell's headquarters in The Hague looking for evidence that could be used in the case, the person said. Shell on Wednesday confirmed it had received "notice of proceedings" from Italian prosecutors in connection with the Nigerian oil block and that its offices had been "visited" recently by Dutch authorities. The Anglo-Dutch company said it is cooperating with the investigators and is looking into the allegations. Shell and Eni have jointly owned a Nigerian license, known as OPL 245, since 2011 to develop giant Atlantic Ocean oil fields thought to contain nine billion barrels of oil. It is a substantial project for the companies in a country that has been of historic importance to both of them. Shell first pursued the oil fields in 2001, when it bought a stake from Malabu Oil & Gas Ltd.--a Nigerian company that was awarded the license when the African country was under military dictatorship. A new Nigerian government soon rescinded Malabu's license, awarding Shell sole ownership and prompting years of legal disputes. Malabu eventually reached a deal with the Nigerian government that gave it the license back, and attracted Eni as an investor. Shell agreed to drop its own legal challenges to Malabu's ownership and together with Eni acquired the oil license in 2011 with a $1.3 billion payment to the Nigerian government. Italian prosecutors are investigating where that money went and whether Shell and Eni knew its destination, according to Italian court documents. The documents show the government later transferred almost all of the money to Malabu, and say the prosecution "believes that a considerable part of that sum was destined for the remuneration of Nigerian public officials." Italian prosecutors aren't investigating Malabu. In 2014, prosecutors in Milan placed Eni and its chief executive, Claudio Descalzi, under investigation for international corruption in connection to the OPL 245 deal. Eni and Mr. Descalzi have denied wrongdoing. Eni has always maintained that it paid the government directly and isn't responsible for where the money eventually ended up. A Shell spokesman said that any payments for the license were made only to Nigeria's federal government and any questions about where the money ended up should be directed to the government and to Malabu. Eni again denied any wrongdoing on Wednesday. The Wall Street Journal wasn't able to reach Malabu for comment. The long-running dispute over OPL 245 now threatens to cast a new cloud over Shell's investments in Nigeria, where it has been present for 80 years and is the biggest Western investor in the country's oil sector. Last year, Shell got nearly 10% of its output from Nigeria and the country remains a major pillar of its business even though it has sold some onshore assets in the Niger Delta in recent years that have been subject to attacks and theft. Shell, which had already made large investments by 2011 developing the field, paid much less than half of the $1.3 billion acquisition price for a 50% stake in the oil field, according to Italian court documents. Italian prosecutors suspect most of the amount ended up being paid in bribes, potentially making Shell responsible for its part, the documents said. Italian daily Corriere della Sera reported the investigation into Shell's role in the Nigeria deal on Wednesday. Write to Eric Sylvers at eric.sylvers@wsj.com and Sarah Kent at sarah.kent@wsj.com Credit: By Eric Sylvers and Sarah Kent
Subject: Oil fields; Petroleum industry; Equity stake; Criminal investigations
Location: Italy Nigeria
People: Descalzi, Claudio
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Eni SpA; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776622493
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776622493?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Crude Supplies Rise; Refinery Runs Accelerate; Crude-oil stockpiles increased by 2.3 million barrels, according to government data
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
Distillate stocks, which include heating oil and diesel fuel, fell by 1.1 million barrels to 161.2 million barrels, but are still above the upper limit of the average range, the EIA said.
Full text: U.S. crude stockpiles increased less than expected in the week ended March 25, while refinery activity surged, according to data released Wednesday by the U.S. Energy Information Administration. Crude-oil stockpiles increased by 2.3 million barrels to 534.8 million barrels, adding to what were already historically-high levels for this time of year, the EIA said. Analysts surveyed by The Wall Street Journal had predicted supplies would rise by 3.5 million barrels on the week. Oil stored at Cushing, Okla., the delivery point for U.S. stocks decreased by 272,000 barrels to 66 million barrels, the EIA said in its weekly report. Gasoline stockpiles fell by 2.5 million barrels to 242.6 million barrels. Analysts were expecting a 2.4-million-barrel decline. Distillate stocks, which include heating oil and diesel fuel, fell by 1.1 million barrels to 161.2 million barrels, but are still above the upper limit of the average range, the EIA said. Analysts had expected a 600,000-barrel weekly decrease. Refining capacity utilization unexpectedly rose by two full percentage points from the previous week, to 90.4%. Analysts were expecting a 0.1-percentage-point drop from the previous week. Write to Dan Molinski at Dan.Molinski@wsj.com Credit: By Dan Molinski
Subject: Petroleum industry
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776680747
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shale Is the Odd Man Out in Oil Reckoning; After delaying the inevitable, rapid decline rates are poised to catch up with shale crude producers, giving them a big role in balancing the global crude market
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
While Russia and many members of the Organization of the Petroleum Exporting Countries may meet next month in Qatar to discuss the idea of an output freeze to support prices, this represents a hollow pledge.
Full text: The world oil market is starting to resemble the old slapstick gag about the French Foreign Legion. The sergeant needs a volunteer to take a step forward for a dangerous mission. Instead, all the assembled soldiers, except one, take a step back, volunteering him. The sucker this time seems to be U.S. shale. While Russia and many members of the Organization of the Petroleum Exporting Countries may meet next month in Qatar to discuss the idea of an output freeze to support prices, this represents a hollow pledge. Yes, the invited countries represent some three-quarters of global output--certainly enough to move the needle on supply. But that needle is stuck in the red zone for all but one producer. Iran, coming off of years of sanctions, is determined to ramp up its output to some 4 million barrels a day from about 2.9 million in January. In the face of that commitment, regional rival Saudi Arabia is reluctant to cede market share . And Russia, pumping near post-Soviet records and desperate for income, has taken a similar stance. With OPEC and its possible partners unwilling to agree to anything beyond the status quo, balancing of supply and demand is being done by western producers with bills to pay and shareholders to please. Economics might seem to dictate that the first cuts would come from the highest-cost fields such as Canada's oil sands, but that would be wrong. Instead it will occur where lack of investment will show up first: U.S. shale. A report last week from the U.S. Energy Information Administration highlights why. A surprisingly high 48% of U.S. oil production from the contiguous states came from wells drilled since 2014. The vast majority is from unconventional formations such as shale. They went from providing 500,000 barrels a day in 2009 to a peak of 4.6 million last May, but output has been declining since then as spending was slashed. Based on geology alone, that decline should have been worse. Production from a shale well typically falls by half during the first year in operation and then by another quarter to one-third in the following year. The reason it hasn't is a significant rise in productivity per well--a modest additional investment squeezed out extra barrels. That trend is reaching its limits, though. So are U.S. producers really such patsies? Driven by the imperative of profitability, it is true that they will cede share. But a large number of uncompleted wells colloquially referred to as a "fracklog" stands ready to come on stream fairly quickly once prices rise by another $20 a barrel or so. By keeping its financial powder dry, a leaner U.S. shale patch can storm back soon after prices become more attractive and enjoy the last laugh. Credit: By Spencer Jakab
Subject: Petroleum industry; Supply & demand; Petroleum production
Location: Iran Russia United States--US Qatar
Company / organization: Name: French Foreign Legion; NAICS: 928110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776686095
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776686095?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Eni Confirms Deaths Near Damaged Niger Delta Oil Pipeline; Victims were "presumably" part of a team responsible for repairs, a company spokesman says
Author: Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract: None available.
Full text: Italian oil company Eni has confirmed that three people died near the company's oil pipeline in the Niger Delta region in Nigeria. The victims were "presumably" part of a team responsible for repair works on the pipeline, a company spokesman said. The oil pipeline was damaged during an act of sabotage on March 24, after which production was shut and repair works were carried out. The repairs were concluded on Saturday, but the bodies not found until Sunday. Eni said it has no evidence of additional people being injured, which some news agencies have reported. The company has said it is working with Nigerian authorities to ascertain the cause of deaths. Eni's business has struggled in Nigeria this year. The Agip oil pipeline in the Bayelsa State was closed for three days in January after an attack. Around 48,000 barrels of oil were affected over the three days. Nigeria has suffered a spate of attacks on pipelines in the past few months, caused by attempted oil theft, including two refineries being shut in January because of sabotage. Nigeria President Muhammadu Buhari has said he will make it a major aim of Nigerian National Petroleum Corp. to combat corruption within the company and crack down on oil vandalism. But some international oil majors have found the attacks disconcerting, with some withdrawing from their dealings with Nigeria because of disruptions to supply. The repeated episodes of vandalism have also not helped Nigeria's domestic fuel crisis. Nigerians have faced heavy queues at the petrol pumps because of a lack of supply. NNPC vowed this week to end the fuel crisis as a matter of urgency, but gave no indication of how it would tackle the problem. Since international oil companies have pulled out of Nigeria, increased responsibility has fallen on NNPC to source oil products to meet domestic demand. Credit: By Miriam Malek
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776690724
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776690724?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Sandridge Warns of Possible Bankruptcy Filing; Oil and gas explorer says 'going concern' notice in annual report could result in default
Author: Gleason, Stephanie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
Sandridge Energy Inc. warned Wednesday the prolonged downturn in energy prices could force it to seek bankruptcy protection as the oil and gas exploration company struggles to address its high debt load.
Full text: Sandridge Energy Inc. warned Wednesday the prolonged downturn in energy prices could force it to seek bankruptcy protection as the oil and gas exploration company struggles to address its high debt load. The Oklahoma City company has been working with financial advisers to explore its options and said in its annual report that could include "a restructuring, amendment or refinancing of existing debt through a private restructuring or reorganization under chapter 11 of the bankruptcy code." Sandridge had previously said the report would contain a "going concern" warning from its auditor because of substantial doubt regarding its ability to continue operations, which violates the terms of its revolving credit facility. The company is trying to negotiate a waiver from lenders during the next 30 days, but the violation could turn into an event of default, Sandridge said Wednesday. Two weeks ago, Sandridge made interest payments to bondholders totaling about $50 million rather than default on the debt after exhausting a 30-day grace period. The company opted to skip the payments in February. Sandridge like other oil and gas explorers is experiencing turmoil as a result of the decline in both oil and natural gas prices. Many, including Samson Resources Corp., Magnum Hunter Resources Corp., Emerald Oil Inc. and Swift Energy Co., have already sought bankruptcy and others have warned that they might. Sandridge drills for oil and gas in Oklahoma, Kansas and Texas, where it has 4,411 gross producing wells and more than 2 million gross acres under lease. As of Dec. 31, it had four rigs drilling. At the end of last year, the company employed 1,165 people but has since reduced its head count to 864. For the quarter ended Dec. 31, Sandridge posted a net loss of $653.7 million, or $1.13 a share, compared with a year-earlier profit of $265.2 million, or 48 cents a share. Revenue fell 59% to $143.6 million. Josh Beckerman contributed to this article. Write to Stephanie Gleason at stephanie.gleason@wsj.com Credit: By Stephanie Gleason
Subject: Bankruptcy reorganization; Bankruptcy; Petroleum industry; Net losses; Debt restructuring; Natural gas prices
Location: Oklahoma
Company / organization: Name: Swift Energy Co; NAICS: 211111; Name: Emerald Oil Inc; NAICS: 211111; Name: Samson Resources Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776695650
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776695650?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Labor Market Shows Signs of Adapting to Commodities Rout: BOC Official; Deputy governor says recovery from the drop in crude-oil prices is likely to take more than two years
Author: Kim Mackrael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
Regional shifts in Canada's labor market suggest the economy may be adapting relatively quickly to the decline in global commodity prices, Bank of Canada deputy governor Lynn Patterson said in prepared remarks for a speech in Edmonton, Alberta.
Full text: Canada's recovery from the steep drop in crude-oil prices is likely to take more than two years as the economy tilts toward non-resource exports, but labor-market shifts are offering positive signs for a turnaround, a senior central-bank official said Wednesday. Regional shifts in Canada's labor market suggest the economy may be adapting relatively quickly to the decline in global commodity prices, Bank of Canada deputy governor Lynn Patterson said in prepared remarks for a speech in Edmonton, Alberta. Ms. Patterson said the gap between unemployment rates in oil-producing regions and the national average is less than 4 percentage points. Previous regional shocks have resulted in larger and more persistent gaps, she said. "While this is just one indicator of labor mobility, the convergence suggests that Canadians have become more willing to move to where the jobs are," Ms. Patterson said. Write to Kim Mackrael at kim.mackrael@wsj.com Credit: By Kim Mackrael
Subject: Economic models; Petroleum industry
Location: Canada Edmonton Alberta Canada
Company / organization: Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776700788
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776700788?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Helicopters Are Unlikely Victim of Oil Downturn; With no recovery in sight, industry has to look--for the first time--at options for storing unsold helicopters
Author: Cameron, Doug
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Mar 2016: n/a.
Abstract:
Increased exploration when oil was above $100 a barrel led operators and a new breed of leasing companies to place orders for dozens of new helicopters able to fly faster and farther for clients such as Royal Dutch Shell PLC and Statoil ASA.
Full text: The energy-industry downturn has created a huge surplus of helicopters, a sharp turnaround from two years ago when oil-and-gas companies were forced to share rides to and from far-flung oil platforms. Operators such as CHC Group Ltd. and Bristow Group Inc. that ferry workers and cargo on behalf of the energy industry said they have been surprised by the severity of the downturn, and don't see any prospects for recovery until next year at the earliest. The slump comes at a tough time for big helicopter makers such as Airbus Group SE and Textron Inc. that are introducing new models, and others such as General Electric Co., which paid $1.8 billion last year for Milestone Aviation Group, the largest helicopter-leasing company by sales. Industry executives said a fifth of the 1,900 helicopters serving the oil-and-gas industry world-wide are idle or underemployed, and expect this overcapacity to worsen before it improves. Helicopters used by the oil-and-gas sector account for 26% of the global commercial fleet, according to AgustaWestland, a unit of Finmeccanica SpA. Helicopter operators also have tried to diversify, expanding into search and rescue missions, medical and VIP flights. But John Mannion, a Houston-based industry consultant, said there is limited scope for redeploying helicopters to other markets or uses because customers differ in their preferences for aircraft types and configurations. For example, some aircraft are kitted out with new radar equipment, making it easier to land and take off from oil platforms in bad weather. Helicopters that primarily fly over water are also equipped with flotation devices to keep them afloat in the event of an emergency landing. Mr. Mannion said the industry will have to look--for the first time--at options for storing unsold helicopters. Manufacturers said limited indoor storage facilities in hangars had created a need for alternative solutions. Mr. Mannion said the alternatives included shrink-wrapping or Heli-Cells--inflatable climate-controlled canopies originally developed to protect expensive classic cars. Era Group Inc., one of the largest helicopter operators in the Gulf of Mexico, has said it may cancel or defer almost three-quarters of its orders, including deals with Lockheed Martin Corp.'s Sikorsky unit and AgustaWestland. Market leader CHC, which went public two years ago, has seen its market value wiped out after peaking at $1.3 billion, and the company was delisted from the New York Stock Exchange in January. It has hired multiple advisers to examine restructuring a heavy debt load. Moody's Investors Service last week downgraded CHC deeper into junk territory. CHC has been cutting costs, reducing its workforce and paring its fleet, but remains optimistic it can weather the storm. "Despite the prolonged nature of the current downturn, we believe the long-term market fundamentals supporting our industry remain intact," CHC Chief Executive Karl Fessenden said on an investor call earlier this month. Shares in Houston-based Bristow, the second-largest global operator by sales, are down 77% from their peak. "The length and severity of this downturn is worse than initially expected, but that is why we have always kept lower levels of leverage and lower numbers of leased helicopters as part of our business model," said Jonathan Baliff, Bristow's chief executive, in a statement. Increased exploration when oil was above $100 a barrel led operators and a new breed of leasing companies to place orders for dozens of new helicopters able to fly faster and farther for clients such as Royal Dutch Shell PLC and Statoil ASA. Demand for new helicopters was so high at the end of 2013 that it had created yearslong waiting lists for the largest models, even with factories running at full rate. The fastest growth in recent years had been in the so-called super-medium category, $30 million machines able to carry 12 to 18 workers 200 hundred miles or more to far-flung platforms off the coasts of Norway, Brazil and West Africa. Airbus and AgustaWestland have also rolled out faster and larger models designed to serve fields farther from shore. Energy companies are now paring production and slashing exploration budgets, forcing helicopter operators to cut staff, streamline operations and shelve or cancel new helicopter orders. "It's a challenging market to be launching any new aircraft, especially one targeting oil and gas," said Ed Washecka, chief executive of Waypoint Leasing Services LLC, one of the new-breed companies that sprang up to rent helicopters to the industry. Dana Fiatarone, vice president of Sikorsky's commercial unit, said it could take three to five years to burn off the excess capacity. Lockheed Martin, which paid $9 billion for Sikorsky last year, expects the unit's commercial sales to slide to $375 million this year from a peak of $1.5 billion in 2013. While Lockheed's interest was driven primarily by Sikorsky's military helicopters, executives were also drawn by the commercial market. One bright spot for manufacturers is that toughening global safety rules could hasten pushing out older helicopters in favor of newer models. Textron's new Bell 225 is due to be delivered to its launch customer next year, and has been designed so that every passenger is just one seat from its safety-exit windows, closer than rival rotorcraft. Such design changes that add safety features could make new helicopters more attractive to customers. Write to Doug Cameron at doug.cameron@wsj.com Credit: By Doug Cameron
Subject: Petroleum industry; Aircraft industry; Helicopters; Stock market delistings; Energy industry; Natural gas utilities
Company / organization: Name: AgustaWestland; NAICS: 336411; Name: Bristow Group Inc; NAICS: 481211, 481212; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Finmeccanica SpA; NAICS: 336411; Name: General Electric Co; NAICS: 334512, 334519, 332510, 334290; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Lockheed Martin Corp; NAICS: 336411, 336413, 336414, 212319, 334290; Name: Milestone Aviation Group Ltd; NAICS: 532411; Name: Textron Inc; NAICS: 336411, 336412, 333517
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 30, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776714927
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Sinks As New Supply Emerges
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Mar 2016: C.1.
Abstract:
Hedge funds, pension funds and other money managers closed out more than 100,000 bets that oil prices would fall between Feb. 9 and March 22, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. But they added fewer bets on rising prices, highlighting their doubt that the price gains would continue.
Full text: Oil prices sank to a two-week low Tuesday on renewed concerns that the global market remains too awash in crude to support prices near $40 a barrel. U.S. prices dropped for a fifth session in a row, matching the market's longest losing streak since Feb. 11 when they hit a 13-year low at $26.21. Oil is down 7.6% from its recent peak on March 22. The buoyant market sentiment of only two weeks ago has reversed sharply, with an anticipated supply freeze now in doubt. Kuwait provided the latest blow when the acting oil minister said that production could restart in the Khafji oil field. The 300,000 barrel-a-day field, which is jointly operated by state-owned oil companies Kuwait Gulf Oil Co. and Saudi Arabia's Aramco Gulf Operations Co., has been closed since October 2014. Traders said the announcement raises questions about an April 17 meeting of major producers in Doha, Qatar, to discuss a production freeze. Those talks had been a primary driver of the recent rally that boosted oil futures more than 50% in about six weeks. "How serious are they about freezing if they're going to come online with new production?" Dave Clayman, principal at Twelve Points Capital LLC, said of Saudi Arabia and Kuwait. Light, sweet crude for May delivery settled down $1.11, or 2.8%, at $38.28 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $1.13, or 2.8%, to $39.14 a barrel on ICE Futures Europe. Both contracts settled at their lowest levels since March 15. Global oil inventories remain near records. U.S. crude stockpiles stand at the highest level in more than 80 years, and government inventory data due Wednesday are expected to show another increase, according to analysts surveyed by The Wall Street Journal. Stephen Schork, editor of industry newsletter the Schork Report, three weeks ago closed out a bet that oil prices would fall as the market moved against him. He placed a new bearish bet Monday. "The rally has run its course, and I think our next big move is another trip back below $30," Mr. Schork said. Hedge funds, pension funds and other money managers closed out more than 100,000 bets that oil prices would fall between Feb. 9 and March 22, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. But they added fewer bets on rising prices, highlighting their doubt that the price gains would continue. Even before Kuwait's announcement, many analysts were skeptical about next month's producer meeting in Doha because Iran and Libya haven't agreed to participate in a freeze. Any production growth from those two countries could offset a decline in output elsewhere, the analysts say. Twelve Points, which manages about $80 million, two weeks ago placed new wagers that oil prices would fall, Mr. Clayman said. "I would put odds at a deal less than 70% and if it even happens I think it's a meaningless deal," he said. "You need a cut for it to be meaningful and that's not going to happen." Oil prices erased some of their losses after Federal Reserve Chairwoman Janet Yellen struck a cautious tone in a speech in New York. The dollar fell on the news. A weaker greenback makes oil, which is traded in dollars, more affordable to foreign buyers. Gasoline futures settled down 1.42 cents, or 1%, at $1.4538 a gallon. Diesel futures fell 2.46 cents, or 2.1%, to $1.1555 a gallon. --- Summer Said contributed to this article.
Credit: By Nicole Friedman
Subject: Crude oil; Commodity prices
Location: United States--US
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Mar 30, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778089372
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778089372?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Helicopters Are Unlikely Victim of Oil Downturn; With no recovery in sight, industry has to look--for the first time--at options for storing unsold helicopters
Author: Cameron, Doug
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
Increased exploration when oil was above $100 a barrel led operators and a new breed of leasing companies to place orders for dozens of new helicopters able to fly faster and farther for clients such as Royal Dutch Shell PLC and Statoil ASA.
Full text: The energy-industry downturn has created a huge surplus of helicopters, a sharp turnaround from two years ago when oil-and-gas companies were forced to share rides to and from far-flung oil platforms. Operators such as CHC Group Ltd. and Bristow Group Inc. that ferry workers and cargo on behalf of the energy industry said they have been surprised by the severity of the downturn, and don't see any prospects for recovery until next year at the earliest. The slump comes at a tough time for big helicopter makers such as Airbus Group SE and Textron Inc. that are introducing new models, and others such as General Electric Co., which paid $1.8 billion last year for Milestone Aviation Group, the largest helicopter-leasing company by sales. Industry executives said a fifth of the 1,900 helicopters serving the oil-and-gas industry world-wide are idle or underemployed, and expect this overcapacity to worsen before it improves. Helicopters used by the oil-and-gas sector account for 26% of the global commercial fleet, according to AgustaWestland, a unit of Finmeccanica SpA. Helicopter operators also have tried to diversify, expanding into search and rescue missions, medical and VIP flights. But John Mannion, a Houston-based industry consultant, said there is limited scope for redeploying helicopters to other markets or uses because customers differ in their preferences for aircraft types and configurations. For example, some aircraft are kitted out with new radar equipment, making it easier to land and take off from oil platforms in bad weather. Helicopters that primarily fly over water are also equipped with flotation devices to keep them afloat in the event of an emergency landing. Mr. Mannion said the industry will have to look--for the first time--at options for storing unsold helicopters. Manufacturers said limited indoor storage facilities in hangars had created a need for alternative solutions. Mr. Mannion said the alternatives included shrink-wrapping or Heli-Cells--inflatable climate-controlled canopies originally developed to protect expensive classic cars. Era Group Inc., one of the largest helicopter operators in the Gulf of Mexico, has said it may cancel or defer almost three-quarters of its orders, including deals with Lockheed Martin Corp.'s Sikorsky unit and AgustaWestland. Market leader CHC, which went public two years ago, has seen its market value wiped out after peaking at $1.3 billion, and the company was delisted from the New York Stock Exchange in January. It has hired multiple advisers to examine restructuring a heavy debt load. Moody's Investors Service last week downgraded CHC deeper into junk territory. CHC has been cutting costs, reducing its workforce and paring its fleet, but remains optimistic it can weather the storm. "Despite the prolonged nature of the current downturn, we believe the long-term market fundamentals supporting our industry remain intact," CHC Chief Executive Karl Fessenden said on an investor call earlier this month. Shares in Houston-based Bristow, the second-largest global operator by sales, are down 77% from their peak. "The length and severity of this downturn is worse than initially expected, but that is why we have always kept lower levels of leverage and lower numbers of leased helicopters as part of our business model," said Jonathan Baliff, Bristow's chief executive, in a statement. Increased exploration when oil was above $100 a barrel led operators and a new breed of leasing companies to place orders for dozens of new helicopters able to fly faster and farther for clients such as Royal Dutch Shell PLC and Statoil ASA. Demand for new helicopters was so high at the end of 2013 that it had created yearslong waiting lists for the largest models, even with factories running at full rate. The fastest growth in recent years had been in the so-called super-medium category, $30 million machines able to carry 12 to 18 workers 200 hundred miles or more to far-flung platforms off the coasts of Norway, Brazil and West Africa. Airbus and AgustaWestland have also rolled out faster and larger models designed to serve fields farther from shore. Energy companies are now paring production and slashing exploration budgets, forcing helicopter operators to cut staff, streamline operations and shelve or cancel new helicopter orders. "It's a challenging market to be launching any new aircraft, especially one targeting oil and gas," said Ed Washecka, chief executive of Waypoint Leasing Ltd., one of the new-breed companies that sprang up to rent helicopters to the industry. Dana Fiatarone, vice president of Sikorsky's commercial unit, said it could take three to five years to burn off the excess capacity. Lockheed Martin, which paid $9 billion for Sikorsky last year, expects the unit's commercial sales to slide to $375 million this year from a peak of $1.5 billion in 2013. While Lockheed's interest was driven primarily by Sikorsky's military helicopters, executives were also drawn by the commercial market. One bright spot for manufacturers is that toughening global safety rules could hasten pushing out older helicopters in favor of newer models. Textron's new Bell 525 is due to be delivered to its launch customer next year, and has been designed so that every passenger is just one seat from its safety-exit windows, closer than rival rotorcraft. Such design changes that add safety features could make new helicopters more attractive to customers. Write to Doug Cameron at doug.cameron@wsj.com Corrections & Amplifications Textron's new Bell 525 is due to be delivered to its launch customer next year. An earlier version of this article misstated the type of product. Credit: By Doug Cameron
Subject: Petroleum industry; Aircraft industry; Helicopters; Stock market delistings; Energy industry; Natural gas utilities
Company / organization: Name: AgustaWestland; NAICS: 336411; Name: Bristow Group Inc; NAICS: 481211, 481212; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Finmeccanica SpA; NAICS: 336411; Name: General Electric Co; NAICS: 334512, 334519, 332510, 334290; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Lockheed Martin Corp; NAICS: 336411, 336413, 336414, 212319, 334290; Name: Milestone Aviation Group Ltd; NAICS: 532411; Name: Textron Inc; NAICS: 336411, 336412, 333517
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776716653
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776716653?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Venezuelan President Nicolás Maduro Vows That Amnesty Law Won't Stand; Leader pledges to block amnesty law his opponents passed to liberate nearly 80 political prisoners, deepening oil-rich nation's institutional crisis
Author: Vyas, Kejal; Armas, Mayela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract: None available.
Full text: CARACAS--Venezuela President Nicolás Maduro on Wednesday vowed to block an amnesty law seeking to liberate nearly 80 political prisoners, a day after his opponents in congress passed the measure, deepening the oil-rich nation's institutional crisis. Venezuela's opposition has made amnesty for prisoners a priority since it wrested control of the legislature from the ruling Socialist Party in December parliamentary elections. The law's backers say it is necessary for reconciliation in a polarized country hit hard by social and political tensions exacerbated by the worst economic performance in the nation's history. But Mr. Maduro says he won't allow it, equating his jailed political rivals with terrorists trying to overthrow his leftist government. "It's the most criminal law that has ever been approved in this country," Mr. Maduro said in a televised address, in which he also handed poverty-stricken Venezuelan families new welfare cards meant to help them weather runaway inflation, which the International Monetary Fund estimates will hit 720% this year. Afterward he encouraged his supporters to protest the amnesty drive. "The law tries to let these criminals back onto the streets...it's not going to pass," he said. The amnesty law aims to liberate 77 politicians, students and military officers jailed by Mr. Maduro and his predecessor Hugo Chávez for up to 13 years for allegedly instigating violence or committing treason, according to the human-rights group Penal Forum, which helped draft the bill. The beneficiaries would include the country's most prominent jailed opposition politician, Leopoldo López, whose detention has drawn the ire of rights groups, the Organization of American States and the U.S. government, which has slapped sanctions on Venezuelan officials for alleged rights abuses. Mr. Maduro doesn't have veto powers under Venezuela's constitution, which gives the executive 10 days to sign a law into effect or defer it to the Supreme Court, which would have 15 days to rule on a law's legitimacy. But Mr. Maduro in late 2015 packed the nation's highest court with magistrates allied with his Socialist Party, all but guaranteeing the prevention of the law's application, said Andres Bello Catholic University law professor Antonio Canova . "There are no institutions in Venezuela," Mr. Canova said. "The executive has all of the control and there's no balance or accountability." Since the opposition-dominated legislature convened in January, the Supreme Court has shot down nearly every one of its measures, disqualifying lawmakers, freeing ministers from congressional oversight and allowing Mr. Maduro to bypass parliament to rule by decree on issues deemed essential for the economy. In a message posted on his official Twitter account, National Assembly leader Henry Ramos, a Maduro critic, said the law was already being evaluated by judges, which he said planned to nullify the amnesty bill. A spokeswoman for the Supreme Court didn't respond to calls seeking comment. Jesús María Casal, a lawyer who advises the National Assembly, said lawmakers can amend the law if judges declare one part of the bill unconstitutional. "More difficult is if the court says the whole law is unconstitutional, that's where the risk is," Mr. Casal said. Opposition leaders, including Mr. López's wife Lilian Tintori, protested Mr. Maduro's rejection of the law at the parliament building in downtown Caracas Wednesday, promising to continue a nationwide campaign to pressure the president. "Maduro has to sign the law if he wants peace and reconciliation," Ms. Tintori said. Write to Kejal Vyas at kejal.vyas@wsj.com Credit: By Kejal Vyas and Mayela Armas
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776716674
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776716674?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Slowly, Painfully, Firms Recognize Losses From Oil and Gas Deals; A prolonged period of low oil prices finally has translated into write-downs for private equity fund portfolios, although differences in accounting methods have prompted some firms to take their hits sooner than others. However, pain in the oil and gas sector could trigger more investment opportunities in 2016.
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
Amid deepening distress in the oil and gas sector, energy investors, including EIG Global Energy Partners, EnCap Investments, Pine Brook and Energy & Minerals Group, also have taken various steps to recognize and mitigate potential losses from their investments.
Full text: Oil prices began their steady decline in 2014, but many private equity firms, including Riverstone Holdings, are only beginning to register the pain. Riverstone affiliate Riverstone Energy Ltd. marked down the fourth-quarter value of certain portfolio companies, recognizing losses on paper for the first time since oil and gas prices began sliding in the summer of 2014. Amid deepening distress in the oil and gas sector, energy investors, including EIG Global Energy Partners, EnCap Investments, Pine Brook and Energy & Minerals Group, also have taken various steps to recognize and mitigate potential losses from their investments. These steps come in a variety of forms. Some firms have opted to pump more capital into their portfolio companies or sought alternative financing to buy time until oil prices recover. Others have walked away from money-losing investments, particularly if they do not have much equity committed to the companies. Accountants and investors said, however, there is no standardized approach to recognizing losses. Falling valuations for energy companies also are encouraging some buyers and sellers in the energy sector to start transacting, after a hiatus in deal activity driven by commodity price volatility. Should I Stay or Should I Go? The oil price slump has left few, if any, private equity investors in the sector unscathed, forcing some firms to make difficult choices. The most recent weekly restructuring watch list from S&P Capital IQ's Leveraged Commentary and Data unit features 44 distressed companies across all industries, and about half of the companies are in the energy sector. Of those energy companies, seven are backed by private equity firms. In mid-March, for example, natural gas processor Southcross Energy Partners LP said its private equity-backed holding company would seek chapter 11 protection. The collapse of the holding company, backed by EIG, Tailwater Capital and Charlesbank Capital Partners, signals distress in the energy industry has expanded beyond the exploration and production sector into the comparatively insulated midstream space. "We don't need to speculate," said Oleg Mikhailov, partner and managing director at the Boston Consulting Group. "We just need to look at how the debt of some of these companies has traded...We have a few walking dead out there." In the face of deepening distress, firms must sometimes decide whether to contribute more capital to their portfolio companies or, in some cases, walk away from them entirely. Some firms have taken advantage of the shrinking valuations of their own portfolio companies by increasing their stakes in those businesses. Riverstone Energy, which marked down the valuations of several of its portfolio companies, last year participated in a capital raise by its portfolio company Canadian International Oil Corp. by investing $68 million "on very attractive terms," bringing Riverstone Energy's stake in the company to 35% on a fully diluted basis. Pine Brook and EnCap, meanwhile, decided not to invest additional equity in oil and gas explorer and producer Common Resources III LLC as commodity prices remain consistently low, putting Common Resources in runoff mode. The firms and other investors committed $412.7 million to launch Common Resources III in 2012 to acquire both conventional and unconventional resources across a wide swath of U.S., including the Gulf Coast, West Texas and the midcontinent areas. People familiar with the situation said the company hasn't drawn down its entire line of equity. Commenting generally, Joseph D'Angelo, a partner at restructuring adviser Carl Marks Advisors, said companies in shale plays that feature higher production costs or are farther away from pipeline systems may face more difficult choices. "A private equity firm has to say 'should I put more money into this company now, or should I wait for oil prices to increase?'" said Mr. D'Angelo. "For every private equity firm that has a company with a production cost that's marginally higher than the cost of oil, how do you justify putting more money in if you can't increase enterprise value? It's also very difficult to sell the assets, because it's not likely that a strategic buyer will be able to reduce that production cost based on the geology." A Tale of Two Accounting Methods Many firms that continue to hold onto their portfolio companies have recognized losses, at least on paper. However, some have marked down assets more quickly than others. Riverstone Energy, which co-invests with Riverstone Holdings' private funds, marked down the values of four portfolio companies to below-cost levels during the fourth quarter. Meanwhile, EIG marked down the unrealized value in a 2007-vintage fund by 34% for the second quarter of 2015 from the same period in 2014. One reason firms may vary in timing the write-downs of oil and gas investments stems from the fact those investments are made over the course of a few years, Kelly DePonte, managing director responsible for research at placement agent Probitas Partners, wrote in an email. The fund's valuation, therefore, "combines different levels of purchase prices at different points in cycle - and importantly in the oil and gas sector, usually a range of projects with different costs of production," Mr. DePonte wrote. "The combined impacts mean that different firms have very different cost structures or revenue-sensitivity structures." In addition, Mr. DePonte wrote firms may base their valuations of companies on a forecast of what they believe are "longer-term equilibrium prices" of oil and gas, rather than spot prices for such commodities. Alan Stevens, a certified public accountant and a partner at consulting firm BDO, added the different accounting methods firms adopt, as well as the different commodity prices firms use to measure their valuations, lead to different ways of recognizing losses from oil and gas assets. Mr. Stevens said some firms follow what is commonly referred to as a full-cost accounting method, while others adopt a successful-efforts method. The two methods lead to, among other things, different ways firms recognize asset impairments. Firms that use the full-cost method would calculate impairments using the historic average prices of oil and gas, whereas those that adopt the successful-efforts method would use forward prices of such commodities, said Mr. Stevens. "It really all comes down to prices," he said. "That creates a divergence." Mr. Stevens added that in a declining-price environment like the current one, firms that adopt the successful-efforts method would recognize losses sooner than ones that use the full-cost method because forward prices would be lower than historical averages. Opportunity Amid Chaos Although the pain caused by low oil prices contributed to a steep drop in deals in 2015, some firms said they continue to find attractive opportunities and expect to see more in 2016, particularly for distressed investors. In 2015, private equity firms made eight majority investments worth a total of $1.54 billion in the U.S. oil and gas industry, down from 16 deals worth $4 billion in 2014, according to data provider Dealogic Ltd. Deals outside of the U.S. also experienced declines in 2015 over 2014 levels. Dealogic's data only include platform investments and don't include purchases of producing properties or lease acreages. In some cases, private equity firms said transacting is a bit easier for deals outside of the U.S. European asset manager Unigestion (US) Ltd., for instance, recently made a first investment out of the firm's direct investing fund, financing U.K. oil and gas company Zennor Petroleum Ltd.'s efforts to roll up assets in the North Sea. "The energy market has repriced more quickly outside the U.S. than in the U.S.," said Federico Schiffrin, a director in Unigestion's direct investing business. Mr. Schiffrin said he believes that is because the U.S. capital markets are deeper and more robust than those elsewhere, enabling companies to refinance their debt. Bank lenders to energy borrowers also don't want to foreclose on oil and gas assets and become operators themselves, making the banks more lenient to borrowers, said Mr. Schiffrin. There are some initial signs that even in the U.S., deals may be picking up, particularly for distressed plays or companies with overlevered balance sheets. Clearlake Capital Group in March recapitalized oilfield services outfit Global Energy Services LLC, which operates at 50 locations, primarily in the Permian basin. In a news release, Clearlake cited the Permian basin's "resilience" in the current commodity price environment as part of its investment thesis. Challenges remain for investors in the U.S. Blackstone Group's credit arm GSO Capital Partners, for instance, hasn't invested any capital into a joint venture with publicly traded LINN Energy LLC, said Donald "Dwight" Scott, a GSO senior managing director. After the joint venture was formed in June, LINN ran into liquidity issues, resulting in its announcement in March that LINN was skipping interest payments on certain bonds. LINN also said it isn't in compliance with the covenants of its credit facility, and that its auditor KPMG LLP has raised doubt about LINN's ability to continue as a going concern. "Everything has fallen out of bed during that period," said Mr. Scott. "It's been hard to get any assets into the joint venture." A LINN spokeswoman didn't return messages seeking comment. The deepening distress, meanwhile, has created new credit-investment opportunities. Such opportunity first emerged during the spring of 2015, though further declines in oil prices after that have raised questions about whether or not some investors jumped in too early. Now, amid diminishing liquidity, more companies have resorted to private equity firms for funding. Clayton Williams Energy Inc., for instance, in March announced a $340 million term loan from Ares Management. Although GSO's joint venture with LINN may be in limbo, the market dislocation is creating opportunity for GSO to provide structured credit to companies seeking liquidity, said Mr. Scott. "Our origination business will be very busy during the second half of 2016, as companies get their capital structures in place or position themselves for survival or to prosper," said Mr. Scott. -Laura Kreutzer contributed to this article. Write to Shasha Dai at asknewswires@wsj.com Credit: By Shasha Dai
Subject: Private equity; Venture capital companies; Petroleum industry; Prices; Portfolio management; Equity; Natural gas; Energy industry
Location: United States--US
Company / organization: Name: Boston Consulting Group; NAICS: 541611; Name: Southcross Energy Partners LP; NAICS: 211111; Name: Energy & Minerals Group; NAICS: 523910; Name: EIG Global Energy Partners; NAICS: 523910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776718224
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776718224?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Futures Resume Declines in Asia as Dollar Firms; May Brent crude lost 21 cents, or 0.5%, to $39.05 a barrel
Author: Strumpf, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
Dollar and oil prices have been closely linked recently, as attention remains on monetary policy in the U.S. On Tuesday afternoon, Federal Reserve Chairwoman Janet Yellen signaled a slower path in raising interest rates and underscored a cautious stance on the global economy.
Full text: Crude-oil futures resumed their slide in early Asian trade Thursday, amid renewed strength in the U.S. dollar and a continued focus on the sizeable global oil stockpile. On the New York Mercantile Exchange, light sweet crude for May delivery fell 34 cents, or 0.8%, to $37.98 a barrel in the Globex electronic session. May Brent crude lost 21 cents, or 0.5%, to $39.05 a barrel. Pressure on crude prices came from the firming U.S. dollar, which rebounded following deep declines during U.S. trading hours. A stronger greenback puts pressure on dollar-denominated crude by making it more expensive in other currencies. The WSJ Dollar Index recently gained 0.1%. Dollar and oil prices have been closely linked recently, as attention remains on monetary policy in the U.S. On Tuesday afternoon, Federal Reserve Chairwoman Janet Yellen signaled a slower path in raising interest rates and underscored a cautious stance on the global economy. The decline followed the first gain for Nymex oil prices in five sessions. On Wednesday, data from the U.S. Department of Energy reported oil inventories there rose 2.5 million barrels. Though the increase was below analyst expectations, it still lifted U.S. oil stockpiles to their highest level in more than 80 years. Rising U.S. stockpiles and dimming expectations for cuts to global supply have sent Nymex sliding about 8% from a high above $40 a barrel seen just last week. Some members of the Organization of the Petroleum Exporting Countries, along with other big exporters not in the cartel, are due to meet in Doha, Qatar, next month to discuss a potential supply freeze, though analysts have cast doubt on the likelihood of an agreement. "The pullback has triggered profit taking on earlier longs and in the run up to the Doha production talks traders would be wise to square their books," according to a report by New Zealand bank OM Financial. Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--fell 122 points to $1.4242 a gallon, while April diesel traded at $1.1601, 4 points higher. ICE gasoil for April changed hands at $346.00 a metric ton, down $5.25 from Wednesday's settlement. Write to Daniel Strumpf at dan.strumpf@wsj.com Credit: By Daniel Strumpf
Subject: Petroleum industry; American dollar; Crude oil prices
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776721702
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776721702?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Thirst for Gasoline Fuels Oil Rally; Drivers' demand for gas has been the fire behind oil's recent rally
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
Even if it does, Iran's plans to increase production by 500,000 barrels a day could mean global supply increases. [...]U.S. producers have spent seven months holding output steady at about nine million barrels a day, defying the conventional wisdom that low prices will force domestic producers to throttle back substantially.
Full text: Falling oil prices have been a boon to drivers. Now, the thirst for gasoline is revving up the oil market. Increasing gasoline demand has been a force behind the recent oil rally, which has lifted U.S. crude prices 46% since early February. Several factors have combined to produce a rise in gasoline consumption, including an unusually mild winter and an economy that added more than 200,000 jobs in both February and March. Consumers also are buying more sport-utility vehicles and trucks, which burn fuel less efficiently. Meanwhile, pump prices are among the lowest in 12 years. The result: U.S. gasoline demand hit record levels in March. Government estimates released Wednesday show consumption averaged more than 9.4 million barrels a day in the four weeks that ended Friday. That is a level usually found only during peak summer driving season, and it compares with roughly 8.8 million barrels a day in March of both 2014 and 2015. On Wednesday, oil edged up 0.1%, to settle at $38.32 a barrel, up 14% this month, on the New York Mercantile Exchange. Gasoline futures lost 1.2%, to $1.4364 a gallon, but are up 60% from the seven-year low they hit less than two months ago, outpacing crude and other oil-products markets. "Can you just imagine how many driving trips are being planned with gas at $1.65 a gallon," said James Cordier, president at Optionsellers.com, a commodity trading adviser that manages about $100 million in assets. For every barrel of crude that goes to a U.S. refinery, about half gets turned into gasoline, according to U.S. government data. That makes gasoline by far the most common product from crude, and U.S. drivers are the biggest consumer, accounting for about a third of global demand, according to the International Energy Agency. Drivers' rising fuel consumption wasn't enough to halt a retreat when oil prices dropped by more than 7% from a recent peak on March 22. And gasoline demand alone is unlikely to be enough to spark another oil rally. Gasoline matters less for market sentiment than news about crude supply, said investors, some of whom already have factored strong gasoline demand into their oil forecasts. But gasoline demand may be the most stable contributor to oil prices. A preliminary deal among Saudi Arabia, Russia and other major oil-producing nations to cap output was the biggest catalyst for crude's recent surge, many analysts said. Yet, that production freeze has yet to materialize, and Kuwait's announcement this week that it could restart production at another oil field cast further doubt that a deal can come together. Even if it does, Iran's plans to increase production by 500,000 barrels a day could mean global supply increases. Moreover, U.S. producers have spent seven months holding output steady at about nine million barrels a day, defying the conventional wisdom that low prices will force domestic producers to throttle back substantially. Gasoline demand, meanwhile, is proving a reliable contributor to the supply-demand equation for oil. "If demand isn't there, the rally can't take off," said Darwei Kung, portfolio manager of the $2.1 billion Deutsche Enhanced Commodity Strategy Fund. Only a few weeks ago, traders feared that increasing stockpiles of gasoline and the sharp drop in driving to start the winter would create a glut of both crude and gasoline. Many had thought "gasoline demand had grown stale. Obviously that has changed," said Nicolas Robin, a commodities-fund manager at Columbia Threadneedle Investments, which manages $472 billion. Gasoline demand rose 8.5% in March from a low in January, when it had dropped well below its 10-year average for the first time since last spring, according to U.S. Energy Information Administration estimates. An unusually warm February and March, after a snowy January, helped revive last year's trend of strong demand. U.S. drivers drove a record 3.1 trillion miles last year, according to the U.S. Transportation Department. The Energy Information Administration expects that to increase 2.1% in 2016 to a record of 3.2 trillion miles, citing rising population and employment, and low retail prices. Pump prices have dropped to their lowest levels since 2004, averaging under $2 a gallon every day this year until March 24, according to automobile club AAA. In 2015, the average driver saved $565 on gasoline compared with 2014, the club's spokesman said. The gasoline-demand trend could continue, thanks in part to vehicle sales in the U.S. and China that are up 10% to 15% and the renewed preference for cars that burn more fuel, Citigroup Inc. said in a recent note. Analysts at J.P. Morgan Chase & Co. recently recommended trades that would benefit from July gasoline futures rising compared with September's, saying the recent demand growth foreshadows strong demand coming this summer, when gasoline consumption tends to rise. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Petroleum industry; Gasoline; Crude oil prices
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776721712
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776721712?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Thirst for Gasoline Fuels Oil Rally
Author: Puko, Timothy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 Mar 2016: C.1.
Abstract:
Even if it does, Iran's plans to increase production by 500,000 barrels a day could mean global supply increases. [...]U.S. producers have spent seven months holding output steady at about nine million barrels a day, defying the conventional wisdom that low prices will force domestic producers to throttle back substantially.
Full text: Falling oil prices have been a boon to drivers. Now, the thirst for gasoline is revving up the oil market. Increasing gasoline demand has been a force behind the recent oil rally, which has lifted U.S. crude prices 46% since early February. Several factors have combined to produce a rise in gasoline consumption, including an unusually mild winter and an economy that added more than 200,000 jobs in both February and March. Consumers also are buying more sport-utility vehicles and trucks, which burn fuel less efficiently. Meanwhile, pump prices are among the lowest in 12 years. The result: U.S. gasoline demand hit record levels in March. Government estimates released Wednesday show consumption averaged more than 9.4 million barrels a day in the four weeks that ended Friday. That is a level usually found only during peak summer driving season, and it compares with roughly 8.8 million barrels a day in March of both 2014 and 2015. On Wednesday, oil edged up 0.1%, to settle at $38.32 a barrel, up 14% this month, on the New York Mercantile Exchange. Gasoline futures lost 1.2%, to $1.4364 a gallon, but are up 60% from the seven-year low they hit less than two months ago. "Can you just imagine how many driving trips are being planned with gas at $1.65 a gallon," said James Cordier, president at Optionsellers.com, a commodity trading adviser that manages about $100 million in assets. For every barrel of crude that goes to a U.S. refinery, about half gets turned into gasoline, according to U.S. government data. That makes gasoline by far the most common product from crude, and U.S. drivers are the biggest consumer, accounting for about a third of global demand, according to the International Energy Agency. Drivers' rising fuel consumption wasn't enough to halt a retreat when oil prices dropped by more than 7% from a recent peak on March 22. And gasoline demand alone is unlikely to be enough to spark another oil rally. Gasoline matters less for market sentiment than news about crude supply, said investors, some of whom already have factored strong gasoline demand into their oil forecasts. But gasoline demand may be the most stable contributor to oil prices. A preliminary deal among Saudi Arabia, Russia and other major oil-producing nations to cap output was the biggest catalyst for crude's recent surge, many analysts said. Yet, that production freeze has yet to materialize, and Kuwait's announcement this week that it could restart production at another oil field cast further doubt that a deal can come together. Even if it does, Iran's plans to increase production by 500,000 barrels a day could mean global supply increases. Moreover, U.S. producers have spent seven months holding output steady at about nine million barrels a day, defying the conventional wisdom that low prices will force domestic producers to throttle back substantially. Gasoline demand, meanwhile, is proving a reliable contributor to the supply-demand equation for oil. "If demand isn't there, the rally can't take off," said Darwei Kung, portfolio manager of the $2.1 billion Deutsche Enhanced Commodity Strategy Fund. Only a few weeks ago, traders feared that increasing stockpiles of gasoline and the sharp drop in driving to start the winter would create a glut of both crude and gasoline. Many had thought "gasoline demand had grown stale. Obviously that has changed," said Nicolas Robin, a commodities-fund manager at Columbia Threadneedle Investments, which manages $472 billion. Gasoline demand rose 8.5% in March from a low in January, when it had dropped well below its 10-year average for the first time since last spring, according to U.S. Energy Information Administration estimates. An unusually warm February and March, after a snowy January, helped revive last year's trend of strong demand. U.S. drivers drove a record 3.1 trillion miles last year, according to the U.S. Transportation Department. The Energy Information Administration expects that to increase 2.1% in 2016 to a record of 3.2 trillion miles, citing rising population and employment, and low retail prices. Pump prices have dropped to their lowest levels since 2004, averaging under $2 a gallon every day this year until March 24, according to automobile club AAA. In 2015, the average driver saved $565 on gasoline compared with 2014, the club's spokesman said. The gasoline-demand trend could continue, thanks in part to vehicle sales in the U.S. and China that are up 10% to 15% and the renewed preference for cars that burn more fuel, Citigroup Inc. said in a recent note. Credit: By Timothy Puko
Subject: Gasoline; Petroleum industry; Crude oil prices
Location: United States--US
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Mar 31, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776773522
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776773522?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Grind Higher Despite Oversupply Worries; Oil inventories rose 2.5 million barrels last week, Energy Department data shows
Author: Kantchev, Georgi; Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
News in the market about supply-and-demand conditions Thursday was bearish, with a survey concluding that output from the Organization of the Petroleum Exporting Countries rose in March to 32.47 million barrels a day--a troublesome signal for a cartel that is seeking cooperation on freezing production to begin alleviating the world's crude glut.
Full text: Oil prices edged higher Thursday after toggling between gains and losses much of the day, as the market refocused on the world's persistent oversupply of crude. The benchmark U.S. oil contract rose 2 cents to $38.34 a barrel on the New York Mercantile Exchange. The global Brent contract gained 0.95 to settle at $39.60 a barrel on the ICE Futures Europe exchange. News in the market about supply-and-demand conditions Thursday was bearish, with a survey concluding that output from the Organization of the Petroleum Exporting Countries rose in March to 32.47 million barrels a day--a troublesome signal for a cartel that is seeking cooperation on freezing production to begin alleviating the world's crude glut. But the market was also supported by a weakening U.S. dollar, which touched lows not seen since October amid talk of less aggressive U.S. interest rate increases and concerns about economic growth. A weaker dollar can drive oil prices higher, as it becomes more affordable for buyers using foreign currency. "The dollar is what's dominating the day here," said Robert Yawger, director of futures at Mizuho Securities USA. For the first quarter of 2016, Brent rose 6.2% while the U.S. benchmark gained 3.5%. Both booked strong gains in March, with Brent rising 10% and the U.S. gaining 14%. Both the U.S. and global contracts have rallied more than 40% after touching multiyear lows earlier this year. But have started to give back gains in the last week as the rally hasn't been attended by much tandem evidence of an improvement in supply-and-demand conditions, in which the world's crude glut is estimated by analysts to be growing at a rate of at least 1 million barrels a day. "The global oversupply is continuing to persist with no signs that rebalancing has begun or is even near beginning," research consultancy the Energy Management Institute said in a note. A dozen countries have officially confirmed their attendance for the April 17 meeting between OPEC and non-OPEC producers to discuss an output freeze and further measures to prop up sagging oil prices, Qatar Energy Minister Mohammed Saleh al-Sada said on Thursday. More * Banks Raise Crude Price Forecasts Iran, however, has declined to join the deal as it seeks to increase its output and regain lost market share after years of international sanctions. Adding to the doubts about the freeze agreement, Saudi Arabia and Kuwait, two of OPEC's biggest exporters, decided earlier this week to restart production at a joint facility that can produce up to 300,000 barrels a day of crude. Meanwhile, data from the U.S. Department of Energy on Wednesday showed oil inventories rose 2.5 million barrels last week, adding to U.S. oil stockpiles that are already at their highest level in more than 80 years. U.S. production remains above 9 million barrels a day. In refined product markets, gasoline futures fell 0.7% to $1.4265 a gallon, while diesel futures rose 2.2% to $1.1848 a gallon. --Selina Williams contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com and Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Georgi Kantchev and Christian Berthelsen
Subject: Crude oil prices; Petroleum industry
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776785154
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776785154?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Rosneft Shows Crude Resilience, Shielded by Weak Ruble; Russian oil giant eked out small rise in full-year profit, also helped by smaller tax bill
Author: Marson, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
Other global oil groups such as Exxon Mobil Corp. and Royal Dutch Shell PLC reported significantly poorer results on lower oil prices , down to around $40 a barrel at the end of last year from nearly $70 at the start.
Full text: MOSCOW--Russian state-controlled oil company OAO Rosneft reported a slight increase in full-year net profit, shielded from plunging oil prices that battered the results of western oil producers by a weakening ruble and a tax system that eases as prices fall. Rosneft, the world's largest listed crude producer, said Thursday that net income rose 2% to 355 billion rubles (about $6.1 billion) in the year to end-December. Other global oil groups such as Exxon Mobil Corp. and Royal Dutch Shell PLC reported significantly poorer results on lower oil prices , down to around $40 a barrel at the end of last year from nearly $70 at the start. Rosneft's results demonstrate the resilience of Russia's oil industry, a critical source of revenue for the federal budget when the economy is also being squeezed by western countries' sanctions imposed after the Kremlin's intervention in Ukraine. Russia's ruble has weakened along with oil prices, so the ruble price of a barrel of oil has fallen less steeply than in dollars. Russia's export and mineral-extraction taxes also fall in line with prices. Rosneft and other Russian oil producers consequently have plenty of rubles to plow into drilling, setting them apart from U.S. and European companies which have cut back heavily on capital spending to save money. The company is struggling to maintain crude production at Soviet-era fields in Western Siberia, and the increased drilling has so far served only to soften a production decline. Rosneft has said it will increase capital expenditures by around one-third this year. The company is aiming to keep crude-oil production level this year, First Vice President Eric Liron said in a conference call, after a drop of 1% last year. Rosneft said Wednesday that higher natural-gas output helped it increase hydrocarbon production by 1% last year to 5.16 million barrels of oil equivalent. Rosneft, in which British oil group BP PLC owns a near 20% stake, said its control over costs also contributed to its improved full-year results. "The company continues to improve its efficiency responding to the challenges of the global market," Chief Executive Igor Sechin said. Earnings before interest, taxes depreciation and amortization grew 18% to 1.2 trillion rubles, while revenue fell 6.4% at 5.2 trillion rubles. Still, lower oil prices pushed fourth-quarter net profit down by more than half to 53 billion rubles from the previous three months, Rosneft said. Free cash flow fell only 21% as capital expenditures came in lower than had been estimated, according to Alexander Kornilov, an analyst at brokerage house Aton. Rosneft, which is heavily indebted after the $55 billion acquisition of rival TNK-BP in 2013, showed "signs of deleveraging" using some of that cash rather than spending it elsewhere, said Ildar Daveltshin, an analyst at Renaissance Capital. "It needs to repair the balance sheet. We'll see if it is a one-off quarter of good discipline," Mr. Davletshin said. Write to James Marson at james.marson@wsj.com Credit: By James Marson
Subject: Petroleum industry; Oil reserves; Corporate profits; Prices; Petroleum production
Location: Russia
Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1776785158
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1776785158?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Banks Raise Oil Price Forecasts But Remain Cautious; The average forecast from 13 banks increases by a dollar from the previous month
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract: None available.
Full text: Big banks have slightly raised their oil-price forecasts for the first time since August but remain cautious about crude's outlook. A survey of 13 investment banks by The Wall Street Journal shows their average forecast increased by a dollar from the previous month, while U.S. crude prices have rallied by nearly 50% since their February lows. The banks see Brent crude, the international oil-price benchmark, averaging $40 a barrel this year, and West Texas Intermediate, the U.S. oil gauge, averaging $39 a barrel. On Thursday, Brent was trading up 0.4% at $40.21 a barrel while WTI was changing hands at $38.24 a barrel, down 0.2% from the previous settlement. The recent rally has been fueled by optimism that the global glut of crude, which has battered prices since 2014, will start to abate this year. Major producers, including supply heavyweights Saudi Arabia and Russia, have promised to limit their production . Meanwhile, driver demand has revved up gasoline sales in the U.S. For now, however, the oversupply continues and oil stockpiles around the globe keep rising, leading the banks to be more cautious in their forecasts. "Current global fundamentals are still bearish due to the massive oversupply," said Mike Wittner, head of oil research at Société Générale. He sees pressure on crude from resilient, if moderately declining, U.S. production, high output from Organization of the Petroleum Exporting Countries, and the gradual return of Iran to the global market . Around a dozen OPEC and non-OPEC producers are due to meet in Doha, Qatar, on April 17 to discuss the potential supply-freeze deal, though analysts have cast doubt on the likelihood of an agreement. Iran, for instance, has declined to join the freeze deal as it seeks to increase its output and regain lost market share after years of international sanctions. Underscoring these doubts, Saudi Arabia and Kuwait, two of OPEC's biggest exporters, decided earlier this week to restart production at a joint facility that can produce up to 300,000 barrels a day of crude. Analysts at Commerzbank called that announcement a "disastrous sign" coming shortly before the Doha meeting. "After all, it gives the impression that the lip service paid to freezing oil production is nothing but hot air," the bank said. If the global oil supply continues to increase, "the next $10 a barrel rise in prices is likely to be more drawn-out than the previous one," analysts at Standard Chartered said. Still, talk of the freeze deal has helped lift oil prices by more than 10% in March. A weaker U.S. dollar and improving sentiment on the broader financial markets have also boosted crude, analysts say. As a result, bets on rising oil prices by hedge funds and other big money managers jumped in recent weeks. The net long positions, or the total number of bets that the price of oil would rise minus the number of bets that it will fall, rose to 364 million barrels in Brent and 215 million barrels in WTI last week, according to exchange data. The 13 banks in the Journal survey see Brent averaging $37.25 a barrel in the second quarter and rising to $46.20 in the fourth quarter. The banks forecast an average oil price of $56 a barrel in 2017, down from above $100 a barrel in 2014. Cheap oil has already benefited consumers and businesses, with U.S. motorists driving a record 3.1 trillion miles last year, according to the U.S. Transportation Department. With prices at the pump dropping to their lowest levels since 2004, this has boosted demand for gasoline. Morgan Stanley expects U.S. gasoline demand to grow by up to 1.5% over the year in 2016. Some analysts, however, say that the oil-price rally could be its own undoing. Nimble U.S. shale producers have increased their efficiency in recent years, driving down the cost at which they could produce oil. If prices continue to rise, shale drillers would pump more crude, adding to the global glut and putting a cap on prices, analysts say. "Any sustained rally above $45 [for WTI] would be self-limiting," said Mr. Wittner of Société Générale. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777080023
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777080023?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Nigeria Nominates Barkindo to Replace el-Badri as OPEC Chief; Nomination comes at a critical time for OPEC, which is grappling with the collapse in oil prices
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
Nigeria has nominated the former chief of its state oil company to be the next secretary-general of the Organization of the Petroleum Exporting Countries, delegates with the group said, potentially ending a deadlock over the cartel's leadership.
Full text: Nigeria has nominated the former chief of its state oil company to be the next secretary-general of the Organization of the Petroleum Exporting Countries, delegates with the group said, potentially ending a deadlock over the cartel's leadership. The nomination of Mohammed Barkindo was put forward in recent days by Nigeria to replace Abdalla Salem el-Badri as OPEC's secretary-general, the delegates said. Mr. Badri has led OPEC for over nine years and was supposed to leave at the end of 2012, but the cartel couldn't reach a consensus on a replacement. The nomination comes at a critical time for OPEC, which is grappling with divisions among its 13 member nations over how to deal with the collapse in global oil prices. Some members like Venezuela want OPEC to cut its own oil production to reduce supply and raise prices, while others like Saudi Arabia want to let market forces work mostly on their own. The secretary-general isn't a decision maker in OPEC like Saudi Arabia's oil minister Ali al-Naimi, for instance. But Mr. Badri has played a key role in brokering agreements and bridging differences between the cartel's fractious members on production policies. Mr. Barkindo worked as OPEC's acting secretary-general a decade ago. He led the Nigerian National Petroleum Corp. from 2009 to 2010. He didn't return messages seeking comment. OPEC has been trying to replace Mr. Badri since 2012, but members failed to reach a consensus over whether a national from Iraq, Saudi Arabia or Iran should head the organization. The secretary-general is nominated for a three-year term by member countries. The position is voted on at ministerial meetings, with the next one scheduled on June 2 in Vienna. OPEC delegates have previously said Indonesia, Nigeria or Angola are the most likely countries to produce the cartel's leader because they are seen as neutral in the group's geopolitical disagreements. A Nigerian candidate would be better option to reach a consensus because members like Iran wouldn't approve a Saudi candidate, said one OPEC delegate from a Persian Gulf Arab country. Saudi Arabia and Iran are regional rivals for power in the Middle East and at odds over the civil war in Syria and violent conflicts in Yemen. Another oil official from the region said Mr. Barkindo "is very popular, experienced," but his success would depend on whether Indonesia fields a candidate. Mr. Badri may also want to stay on "but he cannot stay forever," another Persian Gulf official said. OPEC's next challenge is implementing production limits at meeting with nonmembers such as Russia and Bahrain in Qatar on April 17. Iran, a large OPEC producer ramping its production up after the end of Western sanction, doesn't plan to join the output freeze. Corrections & Amplifications Nigeria nominates Mohammed Barkindo to replace Abdalla el-Badri as OPEC chief. An earlier version of this article incorrectly spelled Mr. el-Badri's first name in the headline. (March 31) Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon and Summer Said
Subject: Nominations; Petroleum industry; Petroleum production
Location: Venezuela Nigeria Iran Saudi Arabia
People: Naimi, Ali I
Company / organization: Name: Nigerian National Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777245150
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777245150?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fed Survey: Majority of Credit Officers Have 'Somewhat Significant' Exposure to Oil Loans; Plunge in oil prices has made it harder for producers to repay loans
Author: Harrison, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
A majority of respondents to a Federal Reserve survey of senior credit officers said their firms had a "somewhat significant" level of exposure to loans to oil companies.
Full text: A majority of respondents to a Federal Reserve survey of senior credit officers said their firms had a "somewhat significant" level of exposure to loans to oil companies. The price of oil has tanked since 2014, making it harder for producers to repay their loans. That, in turn, has put their lenders on the hook. The Fed's respondents said their exposure came from revolving lines of credit to oil-related firms or to funds invested in energy. About two-fifths of the respondents said they also were exposed to term loans, including those secured by oil reserves. A smaller share said they were exposed to derivatives contracts. Many of the respondents' clients were mining companies and commodity traders. At the same time, in the two years since the price of oil started falling, several lenders have taken steps to protect themselves. Two-fifths of the survey's respondents said their exposure to energy firms had decreased; a similar percentage said it had stayed the same. Respondents said they had diminished their exposure by bringing down their risk limits to the oil sector and by allowing positions to mature without reinvesting them. Twenty-one institutions were surveyed from Feb. 17 to March 2. Write to David Harrison at david.harrison@wsj.com Credit: By David Harrison
Subject: Petroleum industry; Lines of credit; Oil reserves
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777277949
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777277949?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Three Libya Oil Ports Set to Reopen; Arrival of Unity Government in Tripoli seen as a positive sign
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
The reopening of the ports raises hope that Libya can increase its oil exports, the main source of revenue for a North African country that in theory could pump up to 1.5 million barrels a day.
Full text: Three Libyan oil ports that have been closed for over a year are set to reopen, now that a unity government has arrived in Tripoli, militia leaders said, a rare positive sign for an oil sector that has been under siege. "We are planning to reopen the ports. It's under the control of the unity government now," Ali al-Hassi, a spokesman for the Petroleum Facilities Guard, the militia protecting the facilities, told The Wall Street Journal. The ports have been shut for up to a year and a half after Libya split between two governments in the East and West of the country. But on Wednesday, Fayez Serraj, the head of a U.N.-sponsored government endorsed by factions on both sides, arrived in Tripoli to start running the country. Mr. Serraj's cabinet, called the Government of National Reconciliation, confirmed on its Facebook page that the "guards [protecting] the installations had agreed to open ports and work immediately" under its control. The oil ports in Es Sider, Ras Lanuf and Zueitina were closed in the past year because of a dispute between the Petroleum Facilities Guard and one of the two rival governments. Later, the ports were the scene of violent attacks, mostly by the Libyan branch of Islamic State . The reopening of the ports raises hope that Libya can increase its oil exports, the main source of revenue for a North African country that in theory could pump up to 1.5 million barrels a day. In recent months it has produced about 400,000 barrels a day, as constant attacks on its facilities took a toll. A return to normal production, however, may not be straightforward. A pipeline leading to the Zueitina terminal, which has an export capacity of 70,000 barrels a day and was shut in November, was attacked in February. Islamic State also destroyed storage tanks at the Ras Lanuf and es-Sider ports, which were already shut in late 2014 and have the ability to load 550,000 barrels a day. Libya's National Oil Co. has previously said the damage would delay the return of 300,000 barrels a day out of the two terminals' loading capacity of 560,000 barrels a day. Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon and Summer Said
Subject: Petroleum industry; Militia groups
Location: Libya
Company / organization: Name: Facebook Inc; NAICS: 519130, 518210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777277968
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777277968?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Why Oil and Gas Companies Are Bracing for Bad News From Banks; The onset of redetermination season in the oil patch will bring bad news for dozens of energy companies as low prices lead to pared credit
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
The irony in redeterminations is that, despite the negative tone, energy companies' high-yield bonds have rallied .
Full text: Bah, humbug. While it is the wrong season for "A Christmas Carol," U.S. oil and gas producers are bracing for words to that effect from their lenders. Redetermination season, a twice-yearly ritual in which banks reassess credit lines, is once again upon us, and they are likely to be Scrooge-like. The result could be that more companies are forced into financially desperate types of financing or bankruptcy filings. U.S. oil and gas producers depend disproportionately on bank credit lines to run their businesses. In normal times the seesaw of commodity prices makes redeterminations a pretty ho-hum affair, but the sharp swoon since mid-2014 is spooking banks . Even so, last spring's redetermination came after a brief rebound in prices and successful stock and bond issues by several firms. And last fall banks were relatively generous, cutting borrowing bases by just 11% according to analysts at Raymond James. Now, despite a 40% bounce since the February low in crude prices, the estimated reductions are a lot sharper--some 20% to 30% on average. Part of that is because banks have been lenient. For example, Raymond James thinks banks valued the "strip"--all the futures prices for oil or natural gas--at 87% to 95% of what they fetched on markets. That seems conservative but a more normal margin of safety is just 80%. Eve aside from that, there are two other factors working against indebted energy companies. One is that their price hedges are running out. A barrel sold for $38 but effectively sold for $70 because its price was locked in with derivatives such as swaps can be valued at that higher price. But prices have been low for long enough that few companies have much of their production covered . Another problem is that, in their effort to save money, drilling has slowed down. That has an impact on proven, undeveloped reserves. If it looks unlikely that oil or gas in the ground will ever be extracted then banks can't count it as collateral for a loan. Some companies have already delivered the bad news. WPX Energy said it had a 30% reduction in its borrowing base and Whiting Petroleum estimated that its base would be cut by 38%. Beyond these numbers, covenants on loans are likely to become more serious and "antihoarding clauses" introduced. These prevent financially troubled companies from drawing down unused credit lines just to have the cash on their balance sheets. The irony in redeterminations is that, despite the negative tone, energy companies' high-yield bonds have rallied . So far this year they are 88 basis points lower compared with a rise of over 40 percentage points for technology and financial firms. That is small solace, though, as the ghost of energy booms past sends a chill through the industry in coming weeks. Credit: By Spencer Jakab
Subject: Petroleum industry; Prices; Natural gas; Lines of credit; Energy industry
Location: United States--US
Company / organization: Name: WPX Energy; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777281181
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777281181?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permissi on.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil: Slim Is In as Drillers Trim Spending; As oil prices have tumbled, investors have shifted gears by rewarding the thriftiest oil-and-gas companies instead of those gung-ho on growth
Author: Puko, Timothy; Cherney, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Mar 2016: n/a.
Abstract:
Quarterly Markets Review * Bonds: Brace for More Turbulence * Stocks: Don't Count on Earnings to Extend Rally * Emerging Markets: Improvement, But for How Long? * Europe: U.K. Vote Puts Trade Bloc on Edge * Asia: Hoping for Less Drama The SPDR S&P Oil & Gas Exploration & Production ETF, a common benchmark for the group, overall fell 1.1% in the first quarter through Wednesday, while U.S. oil prices were up 3.5% to $38.32 a barrel during the same period. Fidelity Investments' John Dowd said he has added shares of some production companies that have cut back to the Fidelity Select Energy Portfolio that he manages, believing that commodity prices will rebound.\n
Full text: Investors are sending a message to oil and gas companies: Think less like wildcatters and more like accountants. During the first quarter, stocks of the oil and gas companies that fared the best were often those that promised to rein in spending. This approach marked a reversal from recent years, when investors tended to reward companies that pursued rapid growth above all else. Exploration and production companies including EQT Corp., Continental Resources Inc. and Anadarko Petroleum Corp. cut their 2016 budgets by 50% to 65% in recent months. Their share prices have risen 20% or more since their announcements, outperforming many peers. Quarterly Markets Review * Bonds: Brace for More Turbulence * Stocks: Don't Count on Earnings to Extend Rally * Emerging Markets: Improvement, But for How Long? * Europe: U.K. Vote Puts Trade Bloc on Edge * Asia: Hoping for Less Drama The SPDR S&P Oil & Gas Exploration & Production ETF, a common benchmark for the group, overall fell 1.1% in the first quarter through Wednesday, while U.S. oil prices were up 3.5% to $38.32 a barrel during the same period. The emphasis on cost-cutting has taken hold as a deep slump in oil and commodity prices nears its second year. The plummet began in late 2014 and early 2015, but companies kept spending and raising production as many expected a quick rebound for prices. Instead, oil kept falling. Now, investors are looking to reward companies prepared to withstand an era of low prices. The trend was the most pronounced at the year's start. It waned slightly when oil prices surged 50% during a six-week span on hopes for a production freeze among major producing nations and a weaker dollar. A weaker dollar makes oil, which is traded in the U.S. currency, cheaper to many foreign buyers. But the rally in crude futures began to peter out by the end of the first quarter on renewed concerns about oversupply and dimming hopes for an agreement to cap output. Stockpiles are still near records and U.S. producers have been slowing down less than expected, creating risk for any energy company reliant on expanding revenues to pay off past debts. That has caused growth to take a back seat to financial stability for many energy investors. Several of the companies that cut back are still outperforming their peers despite oil's recent rally. Shareholders, especially long-term investors, are targeting them as the most prepared to pay off the heavy debt rung up during the boom times. "Equity investors are thinking like bond investors," said John Groton, equity research director at Thrivent Financial in Minneapolis, which manages $100 billion in assets. That is a rare convergence on Wall Street, where bondholders and shareholders are often at odds on their investments. Shareholders that want to own the next industry titans or collect big dividends often bristle at companies that shrink, while spending cuts are often cheered by bondholders who simply want their companies to stay in business and repay their loans. The commodity bust broadened the appeal of a lower-risk strategy. "We're in a survival game right now," said Matthew Brill, a portfolio manager at Invesco Ltd. who manages bond mutual funds. Mr. Groton's preferred exploration-and-production company is EQT, which is largely focused on gas-rich shale formations in Appalachia. The company's shares have risen 21% since it announced in December that it would halve its capital spending for this year. By comparison, the SPDR S&P Oil & Gas Exploration & Production ETF is down 13% over the same period. Only two years ago, EQT was rewarded for doing the opposite: It raised capital spending by 60% for 2014 and its share price went up 20% in the next three months, returns four times as much as the benchmark. Mr. Brill said Invesco in recent months has bought bonds from Anadarko Petroleum Corp. that mature in 2016 and 2017. He said the firm's recent moves to cut dividends and capital expenditures and pursue asset sales will bolster its ability to pay down its debt, and that the company could still raise cash through an equity offering if necessary. In mid-February, Anadarko's 2017 bond fell to about 98 cents on the dollar and yielded more than 7%. The bond has rallied since then and is now trading at about 105 cents and is yielding under 3%. Bond yields fall when prices rise. "You [were] getting one- to two-year bonds of a company we felt were going to address all their issues, and you were getting high-yield pricing for it," Mr. Brill said. Fidelity Investments' John Dowd said he has added shares of some production companies that have cut back to the Fidelity Select Energy Portfolio that he manages, believing that commodity prices will rebound. It is just a matter of selecting the companies with enough cash and financial discipline to be ready when they do, he said. "I don't know the timing, but I do know [prices are] going to be higher in one to two years," said Mr. Dowd, who manages $1.9 billion. "And if I can find the companies that can survive the downturn, in one or two years those investments will look good." Credit: By Timothy Puko and Mike Cherney
Subject: Petroleum industry; Prices; Investments; Capital expenditures; Equity; Natural gas utilities
Location: United States--US
Company / organization: Name: Anadarko Petroleum Corp; NAICS: 211111; Name: Continental Resources Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Mar 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777337971
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777337971?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Futures Slip in Asia as Dollar, Supplies Remain in Focus; June Brent crude on London's ICE Futures exchange fell 23 cents to $40.10 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract:
[...]the reported rise in OPEC output is the latest sign that the global oil market remains vastly oversupplied, and underscores the daunting task facing the world's big oil producers, set to meet in Qatar later this month to discuss the prospect of a production freeze at January levels.
Full text: Oil futures retreated in early Asia trading Friday, kicking off the second quarter with declines as the market's focus remained on movements in the U.S. dollar and robust global oil supplies. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $38.14 a barrel, down 20 cents in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell 23 cents to $40.10 a barrel. Prices eked out a gain on Thursday, though the tone of news was bearish following reports that output from the Organization of the Petroleum Exporting Countries rose in March to 32.47 million barrels a day. Both Nymex and Brent crude have rallied sharply in the last month after slumping to multiyear lows earlier in the year. But the reported rise in OPEC output is the latest sign that the global oil market remains vastly oversupplied, and underscores the daunting task facing the world's big oil producers, set to meet in Qatar later this month to discuss the prospect of a production freeze at January levels. "Everybody's on hold and just waiting to see what's going to coming out of this meeting," said Nelson Wang, an oil analyst at brokerage CLSA "The expectation is kind of high. If there is no concrete plans to cap production I think oil prices might stage a collapse from here." Mr. Wang, along with many market watchers, believes producers will have a difficult time striking an agreement. Over the next few weeks, in the absence of major new developments he expects oil prices to be swayed by moves in currency markets in the currency markets. On Friday, the U.S. dollar was steady after slumping to its lowest level since October. Pressure on the dollar has mounted in recent sessions following signals from the U.S. Federal Reserve that the central bank will move even slower in raising interest rates than previously telegraphed. The dollar and crude oil tend to move inversely to each other. "In the short term I think oil prices are more dominated by the U.S. dollar," Mr. Wang said. The WSJ Dollar Index, which tracks the greenback against a basket of other currencies, was little changed at 86.60. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--fell 40 points to $1.4427 a gallon, while May diesel traded at $1.1852, 3 points lower. ICE gasoil for April changed hands at $350.50 a metric ton, down $4.50 from Thursday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: American dollar; Petroleum industry; Currency; Futures; Crude oil prices
Location: United States--US Asia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777355775
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777355775?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Markets Review & Outlook: First Quarter --- Cheap Oil Shifts Investor Favor to Thriftiest Drillers
Author: Puko, Timothy; Cherney, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Apr 2016: C.10.
Abstract:
Exploration-and-production companies including EQT Corp., Continental Resources Inc. and Anadarko Petroleum Corp. cut their 2016 budgets by 50% to 65%in recent months.
Full text: Investors are sending a message to oil and gas companies: Think less like wildcatters and more like accountants. During the first quarter, stocks of the oil and gas companies that fared the best were often those that promised to rein in spending. This approach marked a reversal from recent years, when investors tended to reward companies that pursued rapid growth above all else. Exploration-and-production companies including EQT Corp., Continental Resources Inc. and Anadarko Petroleum Corp. cut their 2016 budgets by 50% to 65%in recent months. Their share prices have risen 20% or more since their announcements, outperforming many peers. The SPDR S&P Oil & Gas Exploration & Production ETF, a common benchmark for the group, rose 0.4% in the first quarter while U.S. oil prices rose 3.5% to $38.34 a barrel during the same period. The emphasis on cost cutting has taken hold as a deep slump in oil and commodity prices nears its second year. The plummet began in late 2014 and early 2015, but companies kept spending and raising production as many expected a quick rebound for prices. Instead, oil kept falling. Now, investors are looking to reward companies prepared to withstand a bleak era of low prices. The trend was the most pronounced at the year's start. It waned slightly when oil prices surged 50% during a six-week span on hopes for a production freeze among major producing nations and a weaker dollar. A weaker dollar makes oil, which is traded in the U.S. currency, cheaper to many foreign buyers. But the rally in crude futures began to peter out by the end of the first quarter on renewed concerns about oversupply and dimming hopes for an agreement to cap output. Stockpiles remain near records and U.S. producers have been slowing down less than expected, creating risk for any energy company reliant on expanding revenues to pay off past debts. That has caused growth to take a back seat to financial stability for many energy investors. Several of the companies that cut back are still outperforming their peers despite oil's recent rally. Shareholders, especially long-term investors, are targeting them as the most prepared to pay off the heavy debt rung up during the boom times. "Equity investors are thinking like bond investors," said John Groton, equity research director at Thrivent Financial in Minneapolis, which manages $100 billion in assets. "We're in a survival game right now," said Matthew Brill, a portfolio manager at Invesco Ltd. who manages bond mutual funds. Mr. Groton's preferred exploration-and-production company is EQT, which is largely focused on gas-rich shale formations in Appalachia. The company's shares have risen 21% since it announced in December that it would halve its capital spending for this year. By comparison, the SPDR S&P Oil & Gas Exploration & Production ETF is down 13% over the same period. Only two years ago, EQT was rewarded for doing the opposite: It raised capital spending by 60% for 2014 and its share price went up 20% in the next three months, returns four times as much as the benchmark. Mr. Brill said Invesco in recent months has bought bonds from Anadarko that mature in 2016 and 2017. He said the firm's recent moves to cut dividends and capital expenditures and pursue asset sales will bolster its ability to pay down its debt, and that the company could still raise cash through an equity offering if necessary. In mid-February, Anadarko's 2017 bond fell to about 98 cents on the dollar and yielded more than 7%. The bond has rallied since then and is now trading at about 105 cents and yielding about 3%. Bond yields fall when prices rise. "You [were] getting one- to two-year bonds of a company we felt were going to address all their issues, and you were getting high-yield pricing for it," Mr. Brill said. Fidelity Investments' John Dowd said he has added shares of some production companies that have cut back to the Fidelity Select Energy Portfolio that he manages, believing that commodity prices will rebound. It is just a matter of selecting the companies with enough cash and financial discipline to be ready when they do, he said. "I don't know the timing, but I do know [prices are] going to be higher in one to two years," said Mr. Dowd, who manages $1.9 billion. "And if I can find the companies that can survive the downturn, in one or two years those investments will look good." Credit: By Timothy Puko and Mike Cherney
Subject: Financial performance; Petroleum industry; Crude oil prices
Location: United States--US
Company / organization: Name: Invesco Ltd; NAICS: 523120; Name: Anadarko Petroleum Corp; NAICS: 211111
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.10
Publication year: 2016
Publication date: Apr 1, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777413267
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777413267?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
World News: Libyan Oil Ports Prepare To Reopen
Author: Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Apr 2016: A.5.
Abstract:
The reopening of the ports in Es Sider, Ras Lanuf and Zueitina raises hope that Libya can increase oil exports, the main source of revenue for a North African country that could pump up to 1.5 million barrels a day.
Full text: Three Libyan oil ports closed for over a year are set to reopen, now that a unity government has arrived in Tripoli, militia leaders said. "It's under the control of the unity government now," said Ali al-Hassi, a spokesman for the militia protecting the facilities. The ports have been shut for up to a year and a half, since Libya split between two governments in the east and west of the country. But on Wednesday, Fayez Sarraj, the head of a U.N.-sponsored government endorsed by factions on both sides, arrived in Tripoli to start running the country. The reopening of the ports in Es Sider, Ras Lanuf and Zueitina raises hope that Libya can increase oil exports, the main source of revenue for a North African country that could pump up to 1.5 million barrels a day. Recently, it has produced about 400,000 barrels a day. Separately, the European Union decided to move ahead with sanctions on three leading Libyan politicians whom the bloc accuses of undermining the peace process, diplomats said. Credit: By Benoit Faucon
Subject: Ports
Location: Libya
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.5
Publication year: 2016
Publication date: Apr 1, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777414141
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777414141?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Stocks Higher on Encouraging U.S. Data; Despite a steep fall in oil, U.S. equities gain
Author: Driebusch, Corrie; Gold, Riva
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract:
A Bank of Japan survey published Friday showed business confidence fell to its lowest in three years in the first quarter, despite aggressive easing measures by the country's central bank.
Full text: U.S. stocks rose Friday after encouraging readings on the U.S. economy, including a solid March jobs report , added to the growing chorus that early-year fears were overblown. Stocks declined sharply at the start of 2016 on concerns that the U.S. economy could be heading into a recession, but shares rebounded in recent weeks as data have increasingly shown economic resilience. In addition to the jobs report, which was in line with expectations, data showed U.S. manufacturing activity expanded in March for the first time since last summer. Quarterly Markets Review * Bonds: Brace for More Turbulence * Stocks: Don't Count on Earnings to Extend Rally * Oil: Slim Is In as Drillers Trim Spending * Gold: Best Quarter in Decades * Emerging Markets: Improvement, But for How Long? * Europe: U.K. Vote Puts Trade Bloc on Edge * Asia: Hoping for Less Drama The Dow Jones Industrial Average rose 107.66 points, or 0.6%, to 17792.75 on Friday. The S&P 500 added 13.04 points, or 0.6%, to 2072.78 and the Nasdaq Composite gained 44.69 points, or 0.9%, to 4914.54. It was the sixth weekly gain in seven weeks for both the Dow and the S&P 500, which rose 1.6% and 1.8% this past week, respectively. "This is what the market wanted to see," said Darrell Cronk, president of the Wells Fargo Investment Institute, referring to solid data reports. "All this talk about how 2016 is the year the U.S. enters a recession is over. The economic data continues to validate that we're not, which has been what's leading stocks higher since February," he said. Some of the only decliners in the S&P 500 on Friday were shares of energy companies, which fell 1.4%. Oil prices fell sharply after Saudi Arabia's deputy crown prince said in an interview with Bloomberg that the kingdom will freeze its oil production only if Iran and other major producers agree to curb their output. U.S.-traded crude declined 4% to $36.79 a barrel Friday, bringing its weekly decline to 6.8%. Government bonds declined slightly after the jobs report. The yield on the 10-year Treasury note edged higher to 1.793%, compared with 1.784% on Thursday. Nonfarm payrolls rose by 215,000 in March, the Labor Department said Friday, while the unemployment rate edged up to 5%. Economists had expected the figures to show a rise in payrolls of 213,000 and the unemployment rate to hold at 4.9%. Friday's jobs report didn't significantly alter expectations that the Federal Reserve will stick to a slow path for raising interest rates, following Fed Chairwoman Janet Yellen's cautious tone recently . "The data are good but not great, and the report is not strong enough for the Fed to pull the trigger any time soon,'' said Gary Pollack, head of fixed-income trading in New York at Deutsche Bank AG's private wealth-management unit. Federal-funds futures, which investors use to bet on the Fed's interest-rate policy, showed the likelihood of a rate increase at this month's meeting was 6%, unchanged from before the jobs report. The probability for a rate rise in June, however, has risen to 27% from 23%, according to data from CME Group. The euro rose 0.1% against the dollar to $1.1392 late Friday, while the dollar fell 0.8% against Japan's yen to ¥111.72. Elsewhere around the globe, stocks declined Friday, starting the second quarter on a dour note. The Stoxx Europe 600 fell 1.3% following a downbeat session in Asia. A Bank of Japan survey published Friday showed business confidence falling to its lowest in three years, despite aggressive easing measures by the country's central bank. Japan's Nikkei Stock Average fell 3.5%, its steepest drop in more than a month . Two gauges of Chinese manufacturing activity showed a March pickup , beating market expectations. The Shanghai Composite Index rose 0.2%. As investors ease into second-quarter trading, their focus is starting to turn to the coming earnings season. "I believe it will be a tough second quarter," said Vincent Juvyns, global market strategist at J.P. Morgan Asset Management. While the tailwinds of a strong dollar may recede, there is still very slow, disappointing earnings growth, Mr. Juvyns said. Although concerns about the U.S. economy have diminished, "we're likely to see another quarter of soft growth," said David Page, senior economist at AXA Investment Managers. In the Markets * Crude Oil Prices Sink * Dollar Falls Against Yen * Treasurys Unmoved by Solid Data * Gold Prices Fall on Robust Data * Tokyo Shares Post Biggest Fall in Over a Month Min Zeng contributed to this article. Write to Corrie Driebusch at corrie.driebusch@wsj.com and Riva Gold at riva.gold@wsj.com Credit: By Corrie Driebusch and Riva Gold
Subject: Economic recovery
Location: Japan United States--US Asia
Company / organization: Name: Bank of Japan; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777419139
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777419139?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Crude Oil Prices Sink as Saudis Balk at Production Curbs; Doubts about the deal to curb output had already halted an oil price rebound
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract:
Between March 22 and 29, money managers started to dive back into bearish bets and get out of bullish bets, the first time they have trimmed their net-bullish position on U.S. oil since early February, according to data released late Friday by the Commodity Futures Trading Commission.
Full text: U.S. oil prices tumbled to their worst losses in a month Friday, bringing a six-week winning streak to an end on signs that the world's biggest exporters may fail to complete a deal to cap their output. Saudi Arabia's deputy crown prince, Mohammed bin Salman, said in an interview with Bloomberg that the kingdom will freeze its oil output only if Iran and other major producers agree to curb theirs. That makes a tentative deal between Saudi Arabia, Russia and others look much less likely, weakening one of the major sources of support for a rally that had pushed oil prices up 50% in about a month, brokers and analysts said. U.S. prices are now off more than 11% since they settled at a four-month high on March 22, and global prices are down more than 7% from then. Between March 22 and 29, money managers started to dive back into bearish bets and get out of bullish bets, the first time they have trimmed their net-bullish position on U.S. oil since early February, according to data released late Friday by the Commodity Futures Trading Commission. Those same money managers had helped push oil in February and March to rally at a faster pace than any stretch since its recovery from the financial crisis. But analysts and traders repeatedly warned that a deal between the world's biggest producers was just speculation, and that the oversupply that had crashed the oil market for two years had not abated. For many, this week's events reinforced those warnings, undoing the rally. U.S. stockpiles rose again and stocks are near record highs around the world. Yet the biggest producers, Saudi Arabia, Russia and the U.S. are all still pumping at a near-record pace. The Iranians haven't embraced talk of cooperating on cuts, sticking to plans of increasing production by 1 million barrels a day by year's end. On Tuesday, Kuwait's oil minister talked about restarting an idled oil field. And the Saudi crown price's comments Friday are more evidence Saudi Arabia and its allies won't cap output without Iran. "It is shocking. I thought that they had softened their tone somewhat and were willing to work out some sort of deal," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "The crown prince threw cold water on that assumption." Light, sweet crude for May delivery settled down $1.55, or 4%, at $36.79 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $1.66, or 4.1%, to $38.67 a barrel on ICE Futures Europe. Both lost around 6% for the week, their worst weekly performances in more than a month. Saudi Arabia and Russia announced in February a tentative deal to freeze output at current levels, but it was conditional. The Organization of the Petroleum Exporting Countries and non-OPEC producers had a meeting planned for April 17, with some anticipating it could lead to a deal being signed. Instead, the latest news could mean the meeting gets postponed, and the deal could fall through like similar attempts during past oil crises, said Dominick Chirichella, analyst at the Energy Management Institute. "It looks like the freeze deal may be starting to fall apart," he said. After selling off in early trading, oil prices largely stabilized through the rest of the day, holding to losses of more than 3% even during brief rebounds. Traders largely ignored new data about the economy and cutbacks in U.S. oil drilling that may have helped prices go higher on other days. Nonfarm U.S. payrolls rose by a seasonally adjusted 215,000 in March, the Labor Department said Friday. More jobs often mean more drivers and demand for gasoline. The weekly count of working oil rigs from Baker Hughes Inc. also showed that numbers fell by 10 to 362 last week. That is just more than a fifth of its high from less than two years ago. Oil producers had, however, taken advantage of the recent surge in prices to sell long-term production, raising questions about whether those cutbacks will continue, said Tariq Zahir, who oversees $6 million as managing member of Tyche Capital Advisors LLC. Iran's plan to ramp up production now that economic sanctions have ended also undermines any rallies, Mr. Zahir added. "Whatever production declines we do expect to happen, it's going to be picked up by Iran," he said. Many were skeptical about the impact of a deal even if it did get completed. Both Russia and Saudi Arabia have hit record-high production in the past year and stockpiles around the world are holding near record levels, too. Merely holding output at those elevated levels wouldn't likely shrink the oversupply, essential for prices to rebound, many analysts have said. "Hopes have been running high about the potential bullish impact of [the deal] but it is hard to see how sticking to the January output level would be supportive for oil prices," said Tamas Varga of oil brokerage PVM. "Maintaining this level is a tall order in itself as Iran will almost surely not be part of any agreement...There will be no rebalancing this year." In refined-product markets, gasoline futures fell 3.1% to $1.4016 a gallon, while diesel futures fell 4.5% to $1.1317 a gallon. Write to Timothy Puko at tim.puko@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Corrections & Amplifications: A photo showing the flow of drilling mud in a container at an oil well operated by Venezuela's state oil company PdVSA in April 2015 accompanied an earlier version of this article. The photo caption incorrectly said it showed the flow of crude oil. That photo has since been removed. (April 6). Credit: By Timothy Puko and Georgi Kantchev
Subject: Petroleum industry; Supply & demand; Investment advisors; Futures; Crude oil prices
Location: Russia Iran United States--US Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Commodity Futures Trading Commission; NAICS: 926140, 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777430253
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777430253?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Brazil's Petrobras Aims to Cut Up to 12,000 Jobs; The state-run company is hurting from lower oil prices and higher borrowing costs
Author: Jelmayer, Rogerio
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract: None available.
Full text: SÃO PAULO--Brazil's troubled state-run oil company, Petróleo Brasileiro SA, or Petrobras, on Friday announced a voluntary layoff program aiming to cut up to 12,000 jobs, amid its intense effort to cut costs. The company said the program is likely to cost 4.4 billion reais ($1.2 billion) and is expected to save up to 33 billion reais through 2020. "The cost and save values can change according to actual acceptance of employees [to the program], as well as other variables," the company said in a statement. Petrobras posted a fourth-quarter loss of 36.94 billion reais, 39% higher than a year earlier, after lower oil prices and higher borrowing costs forced it to write off 49.75 billion reais in assets and investments for last year. Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com. Credit: By Rogerio Jelmayer
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777481039
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777481039?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
ISM Manufacturing Index Expanded in March; Economy is slowly shaking off the effects of a strong dollar and depressed oil prices
Author: Mitchell, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract:
A long decline in oil prices, tied to a glut of supplies and weak demand, has led energy companies to slash spending on big-ticket factory goods such as drilling equipment.
Full text: WASHINGTON--U.S. factory activity expanded in March for the first time since last summer, a sign the nation's economy is shaking off the effects of a strong dollar and depressed oil prices. The industry's Institute for Supply Management said Friday its gauge of manufacturing activity rose to 51.8 in March from 49.5 in February. A reading above 50 indicates that sector activity--reflecting factors such as customers' orders and factory production--is rising. Economists surveyed by The Wall Street Journal expected the index to hit 50.5 in March. Manufacturing activity had contracted in each month since late last summer largely due to softness in the global economy . A long decline in oil prices, tied to a glut of supplies and weak demand, has led energy companies to slash spending on big-ticket factory goods such as drilling equipment. And the strong dollar has driven up the price of U.S. exports compared with goods priced in other currencies, weighing on sales. Friday's report--showing the most robust activity since last July--hinted that the sector is regaining its footing, a shift that could boost the U.S. economy in coming months. While the energy sector remains in a rut, the overall labor market in the U.S. continues to expand steadily, stoking demand from companies and consumers alike for factory-made goods. Meanwhile, economies overseas may be slowly recovering. "It seems like we've reached bottom in this business of oil prices and all other related prices as well," said Bradley Holcomb, who oversees the ISM survey. And while inflation remains historically low, it has helped many factories that serve nonenergy customers by lowering their bills to operate, Mr. Holcomb said. Headline figures on manufacturing focus on the energy industry downturn, he said. "But there are 17 other industries [within manufacturing] that nobody's really been focusing on to that extent," he said. New orders for factory products soared nearly 7 points to 58.3, and production also picked up, the ISM said. The index of exports climbed 5.5 points to 52. In a discouraging sign, hiring slipped nearly half a point to a reading of 48.1. Mr. Holcomb said factory employment is already relatively high, and that many companies are holding off on hiring further until they see several more months of higher demand and gain confidence in the broader term. The factory sector remains subdued, even with the latest rebound, and obstacles remain. But last month's growth suggests the U.S. economy remains resilient in the face of global economic woes. "The data should lessen fears that 'global economic and financial developments'...will cause overall U.S. growth to slow significantly," Jim O'Sullivan, chief U.S. economist at High Frequency Economics, said in a note to clients. Write to Josh Mitchell at joshua.mitchell@wsj.com Credit: By Josh Mitchell
Subject: Manufacturing; Economic recovery; Factories; Prices; Energy industry; US exports
Location: United States--US
Company / organization: Name: Institute for Supply Management; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777504075
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777504075?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Oil Rig Count Down by 10; Now about 72% fewer rigs of all kinds since peak in October 2014
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs declined in the latest week by four to 88.
Full text: The U.S. oil-rig count fell by 10 to 362 in the latest week, according to Baker Hughes Inc., maintaining a trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to fall. But it hasn't fallen enough to relieve the global glut of crude. There are now about 72% fewer rigs of all kinds since a peak of 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs declined in the latest week by four to 88. The U.S. offshore-rig count was 26 in the latest week, down two from the previous week and down five from a year earlier. Oil prices tumbled Friday after comments from a Saudi royal family member cast more doubt on a deal for major global exporters to cap output. Saudi Arabia's deputy crown prince, Mohammed bin Salman, said in an interview with Bloomberg News that the kingdom will freeze its oil output only if Iran and other major producers agree to curb theirs. Recently, U.S. crude oil fell 3.65% to $36.94 a barrel. Write to Ezequiel Minaya at ezequiel.minaya@wsj.com Credit: By Ezequiel Minaya
Subject: Petroleum industry; Oil service industry
Location: Iran United States--US Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Bloomberg News; NAICS: 519110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777527027
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777527027?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Primorsk Shipping Drops Restructuring Plans; Oil-tanker operator aims for asset sale after opposition to restructuring from senior lenders
Author: Corrigan, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract:
Court papers show the proposed restructuring plan would have set aside 25% of the reorganized company for Primorsk's two owners and senior executives. Because the duo also own about a third of Primorsk's outstanding bonds, they would have ended up with control over just shy of half of the reorganized company.
Full text: Following a pre-emptive strike by senior lenders, Primorsk International Shipping Ltd. told a bankruptcy judge Friday that the oil-tanker operator has dropped its restructuring plans in favor of a sale. During a hearing in Manhattan, Primorsk attorney Brian Glueckstein told U.S. Bankruptcy Court Judge Martin Glenn that the reorganization plan has been withdrawn and that instead the company will soon ask for approval to send its assets to the auction block via a court-supervised sale process. Mr. Glueckstein said the proposed sale would bring the chapter 11 case to a "prompt and successful conclusion." Two deadlines written into a routine cash-spending motion fast-track the sale and could prove controversial with creditors. The deadlines give the company two weeks to find a broker to facilitate the sale and to then draft rules governing the auction process, which must be approved by the court. Creditors have until Wednesday to object to the motion, Judge Glenn said. top logistics news * Get the latest logistics and supply chain news and analysis via an email newsletter. Sign up here . Primorsk abruptly withdrew its restructuring plan after Nordea Bank Norge ASA, which leads a group of senior lenders owed about $263 million, sought to block the proposal, alleging it had been engineered to benefit the company's insiders and affiliates. Nordea, the Norwegian arm of the Swedish banking group, instead demanded that Primorsk abandon the plan and begin selling off its oil-shipping fleet to repay its debts. Primorsk, registered in Cyprus, has been at odds with senior lenders since it filed for chapter 11 protection in January . Last month, the company defended its restructuring plan, calling it "110% confirmable." Court papers show the proposed restructuring plan would have set aside 25% of the reorganized company for Primorsk's two owners and senior executives. Because the duo also own about a third of Primorsk's outstanding bonds, they would have ended up with control over just shy of half of the reorganized company. Mr. Glueckstein said Friday that Primorsk's fleet of nine double-hulled, ice-class ships capable of transporting crude oil in extreme Arctic conditions are fully deployed and operating on schedule. It is "business as usual," he said. Write to Tom Corrigan at tom.corrigan@wsj.com Credit: By Tom Corrigan
Subject: Bankruptcy reorganization; Bankruptcy; Court hearings & proceedings
Company / organization: Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777534437
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777534437?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
CEO James E. Lee Steered Gulf Oil Corp. Through Takeover Battle in the '80s: 1921-2016; Known for his mild manners, Mr. Lee's patience was tried during a bid by a hostile investor group led by T. Boone Pickens
Author: Hagerty, James R
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract:
A bid by Mr. Pickens and other investors to seize control of the fifth-largest U.S. oil company prompted Gulf to consider offers from white knights in 1984 and resulted in what was then the country's largest takeover ever.
Full text: After nearly four decades of climbing through the ranks of Gulf Oil Corp., James E. Lee finally reached the top in the early 1980s--just in time for a fight with T. Boone Pickens. A bid by Mr. Pickens and other investors to seize control of the fifth-largest U.S. oil company prompted Gulf to consider offers from white knights in 1984 and resulted in what was then the country's largest takeover ever. Mr. Lee died March 21 in Mt. Pleasant, S.C., of what the family described as natural causes. He was 94. James Edward Lee was born Dec. 13, 1921, in Kiln, Miss., the oldest of six children. His father was a railroad engineer. After studying chemical engineering at Louisiana Tech University, he got a job at a Gulf refinery in Port Arthur, Texas, in 1942. He later worked for Gulf in the Philippines, Kuwait, Japan and Britain. In Kuwait, security guards once mistook a baseball found in his car for a bomb. Known for his mild manners, he was promoted to president in 1973 and became chairman and chief executive in 1981. The Pittsburgh-based company, which traced its history to the 1901 Spindletop oil gusher in Texas, became a global giant with lucrative overseas oil-production rights in Kuwait and Venezuela. By the time Mr. Lee took charge, however, Gulf was struggling with declining oil and gas reserves. As oil-producing countries took control of their energy industries, Gulf lost much of its overseas production in the 1970s and had to buy crude from others to keep its refineries running. Amid disappointing profits in the early 1980s, Gulf shed thousands of employees and sold European refineries and gas stations. Mr. Lee had the analytical mind of an engineer and didn't make snap decisions, recalled James Murdy, who held senior executive posts at Gulf at the time. "He didn't try to impress everybody with his brilliance," Mr. Murdy said. "He wasn't a shouter, and he didn't bluff people." The hostile investor group led by Mr. Pickens tried Mr. Lee's patience. The investing group emerged in 1983, eventually picking up a 13% stake. Mr. Pickens argued that Gulf was mismanaged and urged it to create a royalty trust that would allow earnings from some oil and gas fields to flow directly to shareholders rather than letting executives decide how to spend the money. Mr. Lee called that "a silly idea." The people now known respectfully as activist investors in that era were typically derided as raiders or greenmailers. Gulf took Mr. Pickens to court, accusing him of market manipulation, and persuaded shareholders to approve a reincorporation that made it harder for hostile parties to win board seats. In an interview last December, Mr. Lee acknowledged that companies could no longer use the same types of tactics against activist investors. "It's a different world," he said. Mr. Pickens, 87, said in an interview Wednesday there were no hard feelings: "He was a good guy, a gentleman." At the time, Mr. Pickens kept the heat on Gulf. As he sought to raise his stake, Gulf began considering offers from other oil companies. In March 1984, the company agreed to sell itself to Standard Oil Co. of California, later renamed Chevron Corp., for $13.3 billion. Profits for the Pickens investor group were estimated at $760 million. Mr. Lee worked for Chevron to help merge the companies, then retired at age 65 in 1986. He enjoyed fishing, pheasant and quail hunting, and singing in church choirs, said Steve Lee, one of the five children he had with his wife of 73 years, Kathleen, who survives him. The retired CEO frequently perched himself with a cup of coffee in a rocking chair on a porch. He didn't feel the need to "still be important" in his retirement, the younger Mr. Lee said. As for the sale of Gulf, the elder Mr. Lee believed he had done his duty to shareholders, his son said: "He certainly didn't dwell on it. When he made a decision, he made it and moved on." David Benoit contributed to this article. Write to James R. Hagerty at bob.hagerty@wsj.com Credit: By James R. Hagerty
Subject: Petroleum refineries; Petroleum industry; Chief executive officers; Tender offers; Shareholder activism
Location: Texas Kuwait United States--US
People: Pickens, T Boone Jr
Company / organization: Name: Louisiana Tech University; NAICS: 611310
Publicationtitle: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777596329
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777596329?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Goodrich Petroleum Plans Bankruptcy Filing; Oil and gas company plans to file a so-called prepackaged bankruptcy plan by April 15
Author: Fitzgerald, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract:
Goodrich Petroleum Corp. said Friday that it plans to file for bankruptcy protection in the coming weeks after reaching a deal on the terms of a debt-for-equity swap with its junior bondholders.
Full text: Goodrich Petroleum Corp. said Friday that it plans to file for bankruptcy protection in the coming weeks after reaching a deal on the terms of a debt-for-equity swap with its junior bondholders. The Houston-based oil and gas company said it plans to file a so-called prepackaged bankruptcy plan by April 15 after striking a deal with its second-lien bondholders that calls for them to swap $175 million in debt for 100% of the reorganized Goodrich. Prepackaged bankruptcies--meaning a company files for chapter 11 with an exit plan in hand that has already been approved by creditors--are favored by those companies and their creditors who wish to navigate the bankruptcy as quickly as possible and with a minimum of expense. A Goodrich representative wasn't immediately available for comment. Under the proposed restructuring agreement outlined in a regulatory filing, senior lenders would be paid in full or have their debt reinstated. The reorganized Goodrich, which drills for crude oil and natural gas in the Tuscaloosa Marine shale formation in Louisiana and Mississippi, would emerge from the anticipated bankruptcy as a going concern with its day-to-day operations substantially intact. Last month, Goodrich said would skip more than $13 million in interest payments due to bondholders on March 15. Skipping the payments started the clock on a 30-day grace period during which Goodrich could complete a restructuring deal outside of bankruptcy. In January, the company announced the terms of its exchange offer to bondholders owed $400 million. The exchange offer was in response to "the current low commodity price environment that has had a significant, adverse impact on the company," Goodrich said at the time. Goodrich has previously said that if its proposed deal was successful, it would cut between $213 million and $224.2 million in debt off its books as well as save between $29.8 million and $31.4 million on annual interest obligations. Earlier this year, the New York Stock Exchange suspended trading of Goodrich's common shares and notified the company that it would seek to delist the shares in light of its "'abnormally low' price," according to a regulatory filing. The shares are now trading on the OTC Markets. Stephanie Gleason contributed to this article. Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com Credit: By Patrick Fitzgerald
Subject: Bankruptcy reorganization; Bankruptcy
Company / organization: Name: Goodrich Petroleum Corp; NAICS: 211111; Name: New York Stock Exchange--NYSE; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777596337
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777596337?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Clinton-Sanders Feuding Escalates as Key Contests Loom; Sanders advisers demand Clinton apologize for saying they were 'lying' about money she has gotten from oil and gas industry
Author: Nicholas, Peter
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract:
Steve Schmidt, a senior strategist in Republican John McCain's 2008 presidential bid, described Mrs. Clinton's reaction as the sort of "tell" one sees in a poker game--a reflection of Mrs. Clinton's frustration that Mr. Sanders is hanging on.
Full text: SYRACUSE, N.Y.--Feuding between Hillary Clinton and her rival for the Democratic nomination, Bernie Sanders, escalated to new levels this past week, with the Vermont senator's campaign advisers demanding she apologize for saying they were "lying" about money she has gotten from the oil and gas industry. Campaigning nonstop, both candidates are showing flashes of fatigue and impatience as the race barrels toward a series of key contests later this month in the delegate-rich states of New York and Pennsylvania. The sour tone could make it more difficult for the party to unify after the race is settled. A Wall Street Journal-NBC poll last month showed one-third of Sanders supporters can't see themselves voting for Mrs. Clinton in the fall if she becomes the nominee. Mrs. Clinton holds a commanding lead in delegates, but she has lost five of the past six contests, and her campaign concedes she will be hard-pressed to win Wisconsin, where the primary is Tuesday. She is heading back there Saturday after three days of campaigning in New York. Fearing Wisconsin might be a lost cause, her staff once had considered making no more trips to the state and instead focusing on coming contests. An indication of the contest's current tenor came at what began as a routine a campaign stop in Purchase, N.Y., on Thursday that ultimately produced one of the tensest moments Mrs. Clinton has had on the trail. A group of Sanders supporters interrupted her speech, chanting, "If she wins, we lose." As they walked out, Mrs. Clinton said: "The Bernie people came to say that. We're very sorry you're leaving." Later, on the rope line, a Greenpeace organizer asked about her campaign contributions from the fossil-fuel industry. Mrs. Clinton shook her finger at the woman, 26-year-old Eva Resnick-Day, and angrily said: "I am so sick of the Sanders campaign lying about that. I'm sick of it." Ms. Resnick-Day said in an interview she was surprised by Mrs. Clinton's retort. In past encounters with Greenpeace activists, Mrs. Clinton has been cordial in discussing her record, Ms. Resnick-Day said. A Clinton senior adviser, Jennifer Palmieri, said Mrs. Clinton was annoyed because she believed her record had been distorted. She has long supported renewable energy and is not beholden to the fossil-fuels industry, she said. "Does it annoy her when people misrepresent her record? It does. And that's what you saw" on the rope line, Ms. Palmieri said. Steve Schmidt, a senior strategist in Republican John McCain's 2008 presidential bid, described Mrs. Clinton's reaction as the sort of "tell" one sees in a poker game--a reflection of Mrs. Clinton's frustration that Mr. Sanders is hanging on. "What it shows is Bernie Sanders is getting under her skin," Mr. Schmidt said. Republicans circulated the video in hopes that it would produce a backlash that damages Mrs. Clinton. "The finger in the face, hammering away with it, is not a good look, usually, in politics," said Bill Cunningham, a political consultant who has worked for Republicans and Democrats alike. Yet the incident also provided a rare window into the emotions of Mrs. Clinton, who seldom veers off script and has faced criticism for lacking authenticity. Some voters might sympathize with her for a human reaction to what she saw as an unfair attack, other analysts said. Democratic political consultant Steve McMahon, who isn't aligned in the race, said the exchange would only humanize Mrs. Clinton. "If you believe your opponent is lying about your record consistently and maliciously, this kind of a reaction is perfectly understandable and perfectly natural," he said. Clinton aides say what money the campaign has gotten from oil and gas interests is largely coming from workers who happen to like the former secretary of state. Employees in the oil and gas industry have donated $307,561 to the Clinton campaign, of a total of $160 million she has raised to date, according to the nonpartisan Center for Responsive Politics. The industry has given an additional $25,701 to outside groups backing the campaign, which have raised more than $55 million on her behalf. And registered lobbyists with clients in the oil and gas industry have raised more than $600,000. Mr. Sanders's campaign has received $53,760 from oil and gas industry employees. The oil and gas industry is far from Mrs. Clinton's largest backer. Wall Street, for example, has given more than $21 million to her campaign and outside groups supporting her. No apology from the Clinton campaign appears in the works. "Apologize for what? No." Ms. Palmieri said. Erica Orden and Rebecca Ballhaus contributed to this article. Write to Peter Nicholas at peter.nicholas@wsj.com Credit: By Peter Nicholas
Subject: Campaign contributions; Political parties
Location: Pennsylvania Vermont Wisconsin
People: Palmieri, Jennifer
Company / organization: Name: Greenpeace; NAICS: 813312, 813940
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Politics
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777609946
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777609946?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduce d with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Mexico's Proven Hydrocarbon Reserves Fell 21% in 2015; Discoveries of proven oil reserves totaled 104 million barrels of mostly light crude
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract: None available.
Full text: MEXICO CITY-Mexico's proven oil and gas reserves fell sharply last year as oil prices dropped and discoveries were modest. The National Hydrocarbons Commission reported on its website that proven reserves as of Jan. 1 stood at 10.24 billion barrels of oil equivalent, down 21% from 13.02 billion barrels a year before. Proven oil reserves fell to 7.64 billion barrels from 9.71 billion barrels, and natural gas reserves fell to 12.651 trillion cubic feet from 15.291 trillion cubic feet. Discoveries in 2015 of proven reserves amounted to 104 million barrels of mostly light crude and 80.7 billion cubic feet of gas, according to the report. The report doesn't explain the decline or give data for broader estimates such as probable and possible reserves. Proven reserves comprise deposits of which most can be recovered profitably under current conditions. A drop in market prices can cause proven reserves to be reclassified as probable. Under the overhaul of the country's energy laws, the government last year awarded 30 exploration and production blocks to private companies in three auctions, although those projects are expected to take several years to start producing. An auction for deep-water blocks, which are even longer-term projects, is planned for December. State oil company Petróleos Mexicanos is the only producer of oil and gas in Mexico. Pemex produced 816.5 million barrels of crude oil in 2015 and 2.336 trillion cubic feet of gas. Mexico held oil auctions for private and foreign companies last year for the first time in nearly eight decades, but a slump in oil prices limited enthusiasm among bidders. Crude oil traded on New York Mercantile Exchange dropped more than 30% in 2015 to end the year at $37.04 a barrel. Lower prices have also forced Pemex to curtail its investments. The company slashed its 2016 budget by 100 billion pesos ($5.8 billion), or about 20%, including deferred investments in some projects where oil is unlikely to be profitable at present prices. Mexico's crude export mix is currently selling for about $30 a barrel. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777609984
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777609984?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Junk-Bond Funds Stirred In Quarter, Up 2.3%; Fed's interest-rate stance, oil prices help bolster the sector
Author: Akhtar, Tanzeel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Apr 2016: n/a.
Abstract:
Investors say the Federal Reserve's decision to hold off on another interest-rate increase for now and the recent increase in oil prices have boosted the market for high-yield debt, along with moves by the European Central Bank and valuation assessments.
Full text: High-yield fixed-income mutual funds and exchange-traded funds have enjoyed a surge of investment this year, along with a rebound in their returns. Investors say the Federal Reserve's decision to hold off on another interest-rate increase for now and the recent increase in oil prices have boosted the market for high-yield debt, along with moves by the European Central Bank and valuation assessments. Journal Report * Insights from The Experts * Read more at WSJ.com/WealthReport More in Investing in Funds & ETFs * How Much Stock in Your Nest Egg? * The New Retirement-Advice Rules * Stock Funds Fell in Quarter * Dividends Helped No. 1 Stock Fund * What's a 'Sustainable' Company? Research firm Morningstar Inc. reports $9.1 billion of net inflows into high-yield bond funds since the beginning of this year, as of March 23. That's after a total of $11 billion flowed out of these funds in the second half of last year. The returns of taxable high-yield mutual funds and ETFs rose 2.3% in this year's first quarter, after dropping 4.1% for all of last year, according to the Lipper unit of Thomson Reuters. Marino Valensise, who is responsible for asset-allocation strategies and products at Baring Asset Management, says his firm recently "doubled up our position in high yield" after deciding that some valuations in the market had fallen to attractive levels. "We had a position of around 6% and now have 12%" in two of the firm's funds, he says. Marina Jelesova, a portfolio manager at Morningstar Investment Management, a unit of the research firm, cites the Fed's decision to keep interest rates on hold, as well as a recent shift in ECB policy, in explaining the high-yield market's turnaround. The European Central Bank said early last month that it would start including corporate bonds in its bond-buying stimulus program, which previously had been limited to government debt. That is expected to push corporate-bond yields down in general, motivating more investors to search out the highest available yields, Ms. Jelesova says. Ms. Jelesova says the U.S. high-yield market's performance also has been strongly correlated with oil prices in the past year, "because energy-related companies account for 13% of the U.S. high-yield index. This share could increase significantly if more energy companies are downgraded from investment grade to high yield." Downgrades of corporate debt to junk status are running at a fast pace this year, she says, fueled largely by downgrades in the energy sector. A greater concentration of energy companies in the high-yield market would link it even more closely to the price of oil, which has risen in recent weeks. But Ms. Jelesova warns that because of that dynamic, investors should "be aware of concentration risk" in the market. Miss Akhtar is a writer in London. She can be reached at reports@wsj.com . Credit: By Tanzeel Akhtar
Subject: High yield investments; Mutual funds; Central banks; Corporate debt; Energy industry
Company / organization: Name: Morningstar Inc; NAICS: 511120, 511140, 511210; Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777847390
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777847390?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Mexican Government Plans More Budget Cuts for 2017; Cuts would be made amid moderate economic growth, lower oil output and continued low oil prices
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Apr 2016: n/a.
Abstract: None available.
Full text: MEXICO CITY--The Mexican government plans to cut spending by an additional $10 billion in 2017 amid moderate economic growth, lower oil production and continued low oil prices, the Finance Ministry said Friday. In a preliminary outline of next year's budget, the ministry said it would reduce spending by 175 billion pesos, in addition to the 132 billion pesos cut from this year's budget. The 2017 budget proposal will be based on an estimated crude-oil price of $35 per barrel. That is above the $25 per barrel it expects for this year, although the government has hedged 2016 oil revenue at $50 per barrel. Crude-oil production is seen falling to 2.03 million barrels a day in 2017 from 2.12 million this year, partly as a result of the budget cuts at state oil company Petróleos Mexicanos. President Enrique Peña Nieto has to submit next year's budget proposal to Congress by Sept. 8, and some of the macroeconomic assumptions could change by then. The Finance Ministry reiterated its commitment to not to increase taxes or resort to higher debt to cover spending. A tax overhaul in 2014, and the drop in oil prices, has lowered the government's dependence on oil to less than 20% of the budget, when in previous years it accounted for more than a third. Crude-oil exports are projected to fall to 968,000 barrels a day this year from 1.17 million in 2015, and to 873,000 barrels a day in 2017. The budget plan aims to narrow the fiscal deficit next year to 2.5% of gross domestic product from 3% in 2016, with the federal government reaching a balanced budget excluding financed investment at state enterprises. As a result, total public debt-to-GDP will begin to decline in 2017 instead of 2018 as previously expected, the ministry said. The reiterated commitment to fiscal tightening comes after Moody's Investors Service on Thursday changed Mexico's sovereign rating outlook to negative from stable, citing lower growth expectations and possible government financial support to Pemex that could pose difficulties for the government to meet its targets for deficit reduction. Moody's affirmed Mexico's A3 sovereign rating, four notches into investment grade, but cut Pemex to Baa3 from Baa1, leaving the company at the minimum investment grade. The 2017 budget outline estimates that the economy will grow between 2.6% and 3.6% next year. The government is projecting similar growth in 2016, and will review that estimate when first-quarter GDP data are known in May. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 2, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777627428
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777627428?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Iraq's Prime Minister Orders Probe of Oil Bribery Allegations; Haider al-Abadi calls for investigation of alleged bribery and kickbacks related to state oil deals
Author: Kesling, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Apr 2016: n/a.
Abstract:
BAGHDAD--Iraq's prime minister called Saturday for an investigation into alleged bribery and kickbacks related to state oil deals and alleged rigged contracts between multinational companies and top-ranking Iraqi officials.
Full text: BAGHDAD--Iraq's prime minister called Saturday for an investigation into alleged bribery and kickbacks related to state oil deals and alleged rigged contracts between multinational companies and top-ranking Iraqi officials. Prime Minister Haider al-Abadi, in response to a report by Australia's Fairfax Media and Huffington Post, ordered an investigation into allegations that improper international oil bids were brokered by people including the country's former deputy prime minister and current education minister, Hussain al-Shahrestani. Mr. Abadi ordered an independent anticorruption government watchdog to investigate Mr. Shahrestani and all other officials mentioned in the article. A separate parliamentary integrity commission subsequently announced it would also begin investigations. Mr. Shahrestani denied any wrongdoing and issued a statement criticizing the news organizations. "We find some of the wicked agendas circulating news which is being promoted by some media outlets," his office said. "This is an attempt to bring down patriotic figures and to confuse the Iraqi scene." Mr. Shahrestani later issued a statement saying he appreciates the prime minister's efforts to investigate the matter and that the issue shouldn't be closed until all funds are restored to the country and all those involved are identified. He also demanded that Mr. Abadi seek all the primary source material from the news organizations. In response to Mr. Shahrestani's comments, Nick McKenzie, the chief reporter on the investigative piece, said, "I would welcome the prospect of the Iraq government assisting the U.S., U.K. and Australian authorities in their investigation into this matter." The allegations center around a Monaco-based company, Unaoil S.A.M., which provides a variety of petroleum-related services. The report alleged that the company worked in a systematic fashion to bribe Iraqi officials to secure lucrative state oil contracts in the country. Fairfax and Huffington Post said they had access to tens of thousands of the company's emails, many of which they said use coded language to discuss the alleged bribery. After the fall of Saddam Hussein in 2003, old oil-kickback contracts were believed to have died as Saddam-era officials were swept from power. Fairfax and Huffington Post allege that Unaoil moved quickly to establish corrupt links to new oil officials in the country and facilitate contracts between multinational foreign companies and Iraqi decision makers and officials at state oil companies. A representative for Unaoil didn't respond to a request for comment. Unaoil told Fairfax and Huffington Post it wasn't involved in any bribery or corruption. Authorities in Monaco said they raided Unaoil's offices there last week and searched the homes of some of its executives, in cooperation with an investigation led by Great Britain's Serious Fraud Office. The executives were also questioned on Tuesday and Wednesday, Monaco authorities said in a statement. The raids and interviews are part of an "investigation into bribery involving international oil companies," the statement said. The Serious Fraud Office, in an emailed response to questions, said, "We are aware of the allegations but can neither confirm nor deny our interest in the matter." The upheaval comes days after Mr. Abadi fended off a challenge to his government by Shiite cleric Moqtada al-Sadr, who said the prime minister wasn't doing enough to reform a government which is believed by many Iraqis to feature significant corruption and is at nearly the bottom of Transparency International's list of countries ranked according to corruption standards. Mr. Abadi announced a round of reforms, clearing out all but two members of his current cabinet to bring in new ministers. Mr. Shahrestani is on the list of those swept out. Parliament will make a decision on the proposed list of new ministers in just over a week. Ghassan Adnan and Benoit Faucon contributed to this article. Write to Ben Kesling at benjamin.kesling@wsj.com Credit: By Ben Kesling
Subject: Petroleum industry; Bribery; Prime ministers; Corruption
Location: Australia Iraq
People: Hussein, Saddam al-Abadi, Haider
Company / organization: Name: Fairfax Media; NAICS: 511120; Name: Huffington Post; NAICS: 519130, 518210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 2, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777758270
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777758270?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon Gets Approval to Restart Torrance Refinery; Company to pay $5 million in penalties for violations related to 2015 explosion at California refinery
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2016: n/a.
Abstract:
[...]the plant has been barely functional for the past year, operating at less than 20% capacity.
Full text: Regulators late Saturday approved Exxon Mobil Corp.'s request to restart its refinery in Torrance, Calif., which has been largely shut since an explosion last year that injured four people. The South Coast Air Quality Management District's hearing board said Exxon will have to pay $5 million in penalties for violations related to the explosion and likely excess pollution during the restart process. Exxon plans to sell the 155,000-barrel-a-day refinery in southern California to PBF Energy Inc. for more than $500 million in a deal announced in September. But PBF has said it won't complete the deal until Exxon first demonstrates that the plant is in good, working condition. The 2015 explosion forced a shutdown of the Exxon refinery's key unit that makes gasoline, called the Fluid Catalytic Cracking Unit. As a result, the plant has been barely functional for the past year, operating at less than 20% capacity. Exxon and the regulators had already agreed to a preliminary agreement for the restart earlier this week. But the final deal had to be voted on Saturday after a public hearing, which lasted throughout the day as many residents stood up, one after another, to express concern and opposition to a refinery with a long rap sheet of safety and pollution issues. The vote was taken some 12 hours after the hearing began Saturday morning. In an emailed statement, Exxon expressed its gratitude to regulators: "We agree with the decision of the South Coast Air Quality Management District Hearing Board and appreciate its hard work and guidance as we work to safely restart the Torrance Refinery." A restart of the facility could mean drivers in southern California and throughout the state will eventually pay slightly less for gasoline because the refinery is an important part of the region's gasoline-refining network. Its closure for the past year has reduced supply, and that has made the state's pump prices, which are already higher than most due to taxes and stricter antipollution requirements, even higher. California pays an average of $2.80 a gallon for gasoline, compared with the national average of $2.06, according to price-tracking firm GasBuddy. Bringing the FCCU back to full power could take several weeks, and the process will likely require Exxon to send more pollutants into the air than normal. The approval order, which allows Exxon to release higher emissions of particulate matter for longer periods than normal, is in effect until July 29. Write to Dan Molinski at Dan.Molinski@wsj.com Credit: By Dan Molinski
Subject: Petroleum industry; Explosions; Public hearings; Petroleum refineries; Quality management
Location: California
Company / organization: Name: PBF Energy; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 3, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777813993
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777813993?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Iran's Oil Exports Jump Ahead of Producers' Freeze Talks; Bijan Zanganeh's remarks follow Saudi prince balking at production curbs on Friday
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Apr 2016: n/a.
Abstract:
Global oil production outpaces demand by almost two million barrels on any given day now, sending prices to their lowest levels in over a decade.
Full text: Iran's oil minister on Sunday said the country's oil exports jumped again in March, potentially undermining a global deal to limit crude output and raise prices. Bijan Zanganeh said Iran's oil and gas condensate exports rose by 250,000 barrels a day in March, to surpass 2 million barrels a day, according to the oil ministry's official Shana news service. The remarks were the oil minister's first comments since a report emerged last week that Saudi Arabia, the world's largest crude exporter, would limit its production only if Iran followed suit. The dueling positions by the Middle East's two biggest rivals for power and economic might have set off a scramble among other oil producing nations to salvage a deal to freeze their output and stop growth in the world's petroleum supplies. Global oil production outpaces demand by almost two million barrels on any given day now, sending prices to their lowest levels in over a decade. Saudi Arabia and other members of the 13-nation Organization of the Petroleum Exporting Countries are set to meet with nonmembers like Russia on April 17 in Doha to hash out a production freeze. The Bloomberg report on Friday, citing an interview with the kingdom's Deputy Crown Prince Mohammed bin Salman, shocked Saudi Arabia's Arab allies in the Persian Gulf. Before the prince's comments, Saudi Arabia had been signaling it would hold production steady, instead of increasing, even if Iran ramped up its output. Iran just received relief from Western sanctions that crippled its oil industry and is increasing output to achieve pre-sanctions levels. Another Iranian media source, the semiofficial Mehr News Agency, reported Sunday that Mr. Zanganeh rejected Saudi demands and that he would attend the Doha meeting "if he had time." An Iranian oil ministry official denied the report on Sunday, saying Mr. Zanganeh hadn't given an interview to Mehr this weekend. Those remarks had been made by the minister on March 10, the official said. But with the Kingdom apparently breaking ranks, Kuwait and Qatar are now scrambling to reach Riyadh to salvage the prospective agreement, according to officials in these countries. On Sunday, Kuwait's acting oil minister Anas al-Saleh said cooperation between OPEC and nonmembers would "certainly help stabilize oil prices." "We believe that a common agreement on a positive stand will serve market stability," the minister said. Oil prices have risen since Saudi Arabia and Russia met in Doha in February and first broached the idea of a freeze. Prices climbed over $40 a barrel in recent weeks, after lows of $27 a barrel in January. But prices fell on Friday, after the Saudi prince's comments were published. Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon and Summer Said
Subject: Petroleum industry; Supply & demand; Petroleum production
Location: Russia Iran Middle East Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 3, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York , N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777832584
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777832584?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Junk-Bond Funds Stirred In First Quarter, Up 2.3%; Fed's interest-rate stance, oil prices help bolster the sector
Author: Akhtar, Tanzeel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2016: n/a.
Abstract:
Investors say the Federal Reserve's decision to hold off on another interest-rate increase for now and the recent increase in oil prices have boosted the market for high-yield debt, along with moves by the European Central Bank and valuation assessments.
Full text: High-yield fixed-income mutual funds and exchange-traded funds have enjoyed a surge of investment this year, along with a rebound in their returns. Investors say the Federal Reserve's decision to hold off on another interest-rate increase for now and the recent increase in oil prices have boosted the market for high-yield debt, along with moves by the European Central Bank and valuation assessments. Research firm Morningstar Inc. reports $9.1 billion of net inflows into high-yield bond funds since the beginning of this year, as of March 23. That's after a total of $11 billion flowed out of these funds in the second half of last year. The returns of taxable high-yield mutual funds and ETFs rose 2.3% in this year's first quarter, after dropping 4.1% for all of last year, according to the Lipper unit of Thomson Reuters. Marino Valensise, who is responsible for asset-allocation strategies and products at Baring Asset Management, says his firm recently "doubled up our position in high yield" after deciding that some valuations in the market had fallen to attractive levels. "We had a position of around 6% and now have 12%" in two of the firm's funds, he says. Marina Jelesova, a portfolio manager at Morningstar Investment Management, a unit of the research firm, cites the Fed's decision to keep interest rates on hold, as well as a recent shift in ECB policy, in explaining the high-yield market's turnaround. The European Central Bank said early last month that it would start including corporate bonds in its bond-buying stimulus program, which previously had been limited to government debt. That is expected to push corporate-bond yields down in general, motivating more investors to search out the highest available yields, Ms. Jelesova says. Ms. Jelesova says the U.S. high-yield market's performance also has been strongly correlated with oil prices in the past year, "because energy-related companies account for 13% of the U.S. high-yield index. This share could increase significantly if more energy companies are downgraded from investment grade to high yield." Downgrades of corporate debt to junk status are running at a fast pace this year, she says, fueled largely by downgrades in the energy sector. A greater concentration of energy companies in the high-yield market would link it even more closely to the price of oil, which has risen in recent weeks. But Ms. Jelesova warns that because of that dynamic, investors should "be aware of concentration risk" in the market. Credit: By Tanzeel Akhtar
Subject: High yield investments; Junk bonds; Mutual funds; Central banks
Company / organization: Name: Morningstar Inc; NAICS: 511120, 511140, 511210; Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777845107
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777845107?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Some Commodities Leave the Doghouse; Oil and gold ETFs draw interest, but how long will it last?
Author: Constable, Simon
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2016: n/a.
Abstract:
Journal Report * Insights from The Experts * Read more at WSJ.com/WealthReport More in Investing in Funds & ETFs * How Much Stock in Your Nest Egg? * The New Retirement-Advice Rules * Stock Funds Fell in Quarter * Dividends Helped No. 1 Stock Fund * What's a 'Sustainable' Company?
Full text: After years of shunning commodities, investors are once again making big bets on the sector by jumping into exchange-traded funds. The buying is primarily in oil and gold, and not every observer of the market agrees that the money will stay put in these funds for very long. But the binge is still impressive. "It is a long time since commodities have been as popular with investors as they have so far this year," says a March report from Barclays. It says an estimated $21.5 billion was invested in commodity ETFs and other commodity investment products world-wide in January and February, the strongest start to a year since 2011. It notes that last year, investors pulled money out of commodity ETFs for the third straight year. Journal Report * Insights from The Experts * Read more at WSJ.com/WealthReport More in Investing in Funds & ETFs * How Much Stock in Your Nest Egg? * The New Retirement-Advice Rules * Stock Funds Fell in Quarter * Dividends Helped No. 1 Stock Fund * What's a 'Sustainable' Company? Data on U.S.-listed commodity ETFs that was provided to The Wall Street Journal by research firm Morningstar Inc. show huge inflows in January and February. The primary recipients of the new cash were precious-metals and energy funds, with a total of $8.4 billion flowing into those two areas. Outflows from some other types of funds reduced the net inflow into commodities ETFs for the two months to $8.1 billion. Last month, $1.5 billion flowed into U.S.-listed commodity ETFs through March 23, according to Morningstar. Dollar-driven? It's understandable that investors fled the sector in recent years, because commodities prices have been pummeled, with the Thomson Reuters/CoreCommodity CRB Index falling from 371 on April 29, 2011, to 171 on March 31 this year. So why the interest now? "I would characterize the current situation as short-term opportunistic trades in individual commodities," says Kevin Norrish, head of commodities research at Barclays in London. He says things have changed from a decade ago, when investors were happy to invest a fixed percentage of a portfolio in commodities for diversification and inflation protection. Today, he says, "investors are skeptical of broad-based allocation to commodities over the long term, based on the kind of returns delivered over the past few years." Some analysts think the buying this year is related to the recent weakness of the U.S. dollar. All commodities are denominated in the U.S. currency, so when the dollar weakens that tends to support the price of commodities. The flip side of that connection has been evident in the past few years. As commodities prices fell, a trade-weighted index of the dollar's value against major currencies rallied from May 2011 through mid-January of this year, according to data from the St. Louis Federal Reserve. Since then, the index has retreated. "The key is that commodity-markets investors are making a bet that the Federal Reserve can't raise rates based on the fundamentals in the economy," says Victor Sperandeo, founder and chief executive of EAM Partners LP, a financial-markets research and advisory firm. The lack of an interest-rate increase in the U.S. would tend to weaken the dollar or keep it from strengthening. In particular, investments in precious metals generally are seen as a bet against the dollar, so that helps explain the recent buying of precious-metals ETFs. The buying of energy funds can be traced in part to a rebound in oil prices and speculation that oil producers will scale back or at least freeze output levels. The big picture So, should investors who haven't already bought commodities ETFs jump on the bandwagon? Stephen Wood, chief market strategist at Russell Investments, says neither the aversion to commodities among investors in recent years nor the recent buying binge should influence investment decisions. He continues to recommend that clients stick with a multiyear, multiasset approach. That means allocating a portion of a portfolio to commodities for diversification and sticking with it, to help reduce a portfolio's overall volatility. "The emotional and behavioral responses are not surprising," says Mr. Wood. "We just work hard to temper those reactions." Mr. Constable is a writer in New York. He can be reached at reports@wsj.com . Credit: By Simon Constable
Subject: Mutual funds; Commodity prices; Investments; American dollar
Location: United States--US
Company / organization: Name: Morningstar Inc; NAICS: 511120, 511140, 511210; Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777848018
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777848018?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Junk-Bond Funds Stirred In Quarter, Up 2.3%; Fed's interest-rate stance, oil prices help bolster the sector
Author: Akhtar, Tanzeel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2016: n/a.
Abstract:
Investors say the Federal Reserve's decision to hold off on another interest-rate increase for now and the recent increase in oil prices have boosted the market for high-yield debt, along with moves by the European Central Bank and valuation assessments.
Full text: High-yield fixed-income mutual funds and exchange-traded funds have enjoyed a surge of investment this year, along with a rebound in their returns. Investors say the Federal Reserve's decision to hold off on another interest-rate increase for now and the recent increase in oil prices have boosted the market for high-yield debt, along with moves by the European Central Bank and valuation assessments. Journal Report * Insights from The Experts * Read more at WSJ.com/WealthReport More in Investing in Funds & ETFs * How Much Stock in Your Nest Egg? * The New Retirement-Advice Rules * Stock Funds Fell in Quarter * Dividends Helped No. 1 Stock Fund * What's a 'Sustainable' Company? Research firm Morningstar Inc. reports $9.1 billion of net inflows into high-yield bond funds since the beginning of this year, as of March 23. That's after a total of $11 billion flowed out of these funds in the second half of last year. The returns of taxable high-yield mutual funds and ETFs rose 2.3% in this year's first quarter, after dropping 4.1% for all of last year, according to the Lipper unit of Thomson Reuters. Marino Valensise, who is responsible for asset-allocation strategies and products at Baring Asset Management, says his firm recently "doubled up our position in high yield" after deciding that some valuations in the market had fallen to attractive levels. "We had a position of around 6% and now have 12%" in two of the firm's funds, he says. Marina Jelesova, a portfolio manager at Morningstar Investment Management, a unit of the research firm, cites the Fed's decision to keep interest rates on hold, as well as a recent shift in ECB policy, in explaining the high-yield market's turnaround. The European Central Bank said early last month that it would start including corporate bonds in its bond-buying stimulus program, which previously had been limited to government debt. That is expected to push corporate-bond yields down in general, motivating more investors to search out the highest available yields, Ms. Jelesova says. Ms. Jelesova says the U.S. high-yield market's performance also has been strongly correlated with oil prices in the past year, "because energy-related companies account for 13% of the U.S. high-yield index. This share could increase significantly if more energy companies are downgraded from investment grade to high yield." Downgrades of corporate debt to junk status are running at a fast pace this year, she says, fueled largely by downgrades in the energy sector. A greater concentration of energy companies in the high-yield market would link it even more closely to the price of oil, which has risen in recent weeks. But Ms. Jelesova warns that because of that dynamic, investors should "be aware of concentration risk" in the market. Miss Akhtar is a writer in London. She can be reached at reports@wsj.com . Credit: By Tanzeel Akhtar
Subject: High yield investments; Mutual funds; Central banks; Corporate debt; Energy industry
Company / organization: Name: Morningstar Inc; NAICS: 511120, 511140, 511210; Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777860378
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777860378?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Extend Skid on Skepticism Over Production Freeze; Global oil producers are set to discuss agreement to cap output in Doha later this month
Author: Berthelsen, Christian; Malek, Miriam; Baxter, Kevin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2016: n/a.
Abstract:
Regulatory data released Friday showed money managers such as hedge funds cooling on oil's prospects , cutting bullish long positions and adding bearish short sales against the market.
Full text: Oil prices sold off sharply Monday, touching a one-month low, as skepticism mounted that a global agreement capping output would be reached in Qatar later this month. The benchmark U.S. oil contract fell 3% to $35.70 a barrel on the New York Mercantile Exchange, after a 4% pullback on Friday. The global Brent crude contract ended down 2.5% at $37.69 a barrel on the ICE Futures Europe exchange. Both contracts ended at their lowest level since March 3. After rallying more than 50% between February and March, the market has given back 14% of those gains in the past two weeks as concerns grow about the persistent imbalance between supply and demand. Much of the rally was built on hopes that the meeting would yield an output freeze and little in the way of a recovery in supply-demand conditions; if it doesn't come to pass, there would be little to support the market at this level. Regulatory data released Friday showed money managers such as hedge funds cooling on oil's prospects , cutting bullish long positions and adding bearish short sales against the market. "There doesn't seem to be any signs of tightening in the fundamental picture," said Gene McGillian, a senior analyst at brokerage Tradition Energy. Major sovereign oil producers, including both members and nonmembers of the Organization of the Petroleum Exporting Countries, are scheduled to meet in Doha on April 17. But Saudi Arabia said Friday it would only freeze production if Iran, a fellow member of OPEC, agreed to cooperate. Iran has ruled that out until its production recovers to pre-sanction levels, and the country's oil minister said Sunday that its oil exports jumped again in March. "There is a big question mark over whether an agreement on production caps can be reached at the meeting," Commerzbank said in a note. Output from major non-OPEC producer Russia hit a record high in March, eroding market confidence that the global supply glut is tapering off. Russia's oil production hit post-Soviet highs of 10.912 million barrels a day, according to the Energy Ministry's CDU-TEK unit. The figures reflect a 2.1% rise from year-ago levels. In refined product markets, gasoline futures fell 1.8% to $1.3770 a gallon and diesel futures fell 3.8% to flat at $1.0889 a gallon. Write to Christian Berthelsen at christian.berthelsen@wsj.com and Kevin Baxter at Kevin.Baxter@wsj.com Credit: By Christian Berthelsen, Miriam Malek and Kevin Baxter
Subject: Petroleum industry; Supply & demand; Futures; Petroleum production
Location: Iran Qatar United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777922071
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777922071?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
National Oilwell Varco Signals Further Mass Layoffs in Norway; Oil Industry subcontractor blames reduced investment and equipment sales
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2016: n/a.
Abstract:
Delivering offshore drilling equipment, National Oilwell Varco is exposed to the global offshore oil and gas sector and its overcapacity of drillships, jackup rigs, semi-submersible rigs and floating rigs.
Full text: OSLO--National Oilwell Varco said Monday that it would continue slashing jobs in Norway, after laying off 2,400 workers--half of its local staff--last year, as sinking oil-sector investment continues to hammer major industry subcontractors. "We are signaling mass layoffs," said a spokesman for National Oilwell Varco's Norwegian unit. "We're starting negotiations with our employees now, and will have the accurate number ready within a few weeks." The company blamed its continued downsizing on deteriorating market conditions, with reduced investment and weak equipment sales. Over the past year, National Oilwell Varco has shed 1,800 permanent jobs and 600 contractors in Norway amid weaker activity in the North Sea. Delivering offshore drilling equipment, National Oilwell Varco is exposed to the global offshore oil and gas sector and its overcapacity of drillships, jackup rigs, semi-submersible rigs and floating rigs. The company said about 500 offshore rigs and drillships are active globally, and about 300 units are retired so far, with more retirements expected, and no rapid rebound expected. "The market shows no sign of improvement," the NOV spokesman said. "We have a significant overcapacity compared with our shrinking order reserve. We have too many employees, and we have to do something about it." Oil companies operating in Norway, Western Europe's largest oil exporter, expect to spend 163.9 billion kroner ($19.7 billion) this year on existing oil and gas fields, new developments, and exploration, almost a quarter below the all-time spending high in 2014. The Norwegian Oil and Gas association expects spending in the country's oil sector to bottom out in 2017 at 132 billion kroner. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Petroleum industry; Oilfield equipment & services
Location: Norway North Sea
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 4, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777950981
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777950981?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Doubts Over Oil Production Limits Make Money Managers Bearish; Number of net long positions falling as hopes for production cap deal fade
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2016: n/a.
Abstract:
"Speculative financial investors who had bet on a rising oil price in anticipation of an agreement...are likely to withdraw again in view of this latest situation," analysts at Commerzbank said in a note to clients.
Full text: LONDON--Hedge funds and other money managers grew more bearish about oil last week amid increasing doubts that major producers will agree to limit their output. Bets that the price of the international benchmark Brent would fall rose last week for the first time since early February, data from the Intercontinental Exchange Inc. showed on Monday. Money managers also hiked their bearish bets in West Texas Intermediate, the U.S. price gauge. On Monday, Brent crude was trading at $38.65 a barrel, down 0.1%, while WTI was changing hands at $36.69 a barrel, down 0.3%. This increasing pessimism comes after a weekslong rebound that saw oil prices jump by around 50%. The rally was driven by hopes that major oil producing countries, including Saudi Arabia and Russia, would agree to limit their production in a move that would support the market. Speculative investors, such as hedge funds, were among those buyers who were pushing oil higher. Around a dozen OPEC and non-OPEC countries are due to meet on April 17 in Doha, Qatar, to discuss the production limits. But doubts about an agreement have increased in recent weeks as Saudi Arabia indicated it would only limit its output were others to join as well. Iran has balked at joining the so called "production freeze" as it seeks to regain market share after years of international sanctions. Russian oil output, meanwhile, climbed to 10.91 million barrels a day in March--its highest level in nearly 30 years. "Speculative financial investors who had bet on a rising oil price in anticipation of an agreement...are likely to withdraw again in view of this latest situation," analysts at Commerzbank said in a note to clients. Managed-money accounts increased the number of short positions in Brent by 13% to 47,806 as of March 29, according to the Commitment of Traders report from the ICE. The number of long positions--bets that the crude oil price would rise--fell by 0.3% to 404,803. That left the net long position--bets on rising prices minus bets on falling prices--down 1.8% from the previous week. This mirrored developments in WTI, where money managers added 11,167 bets on lower prices, CFTC data showed on Friday. The net long position shrank 6.3% to 221,016--the first time it has fallen since early February. The increased pessimism by money managers could lead oil prices lower, Commerzbank said. Tim Puko contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Crude oil prices; Investment advisors; Petroleum industry; Pessimism
Location: Russia United States--US Saudi Arabia
Company / organization: Name: Commodity Futures Trading Commission; NAICS: 926140, 926150; Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: Intercontinental Exchange Inc; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1777970573
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1777970573?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
NGP Executive Says Hope Amid Oil Gloom Comes From 'American Ingenuity'
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2016: n/a.
Abstract:
Amid the oil price slump, most explorers and producers had to cut costs significantly in order to survive.
Full text: It may be mostly doom and gloom in the oil patch these days. But Kenneth Hersh, who heads NGP Energy Capital Management nonetheless expressed hope during a recent webcast. Amid the oil price slump, most explorers and producers had to cut costs significantly in order to survive. That, however, was impossible for companies whose assets are located in basins with higher production and operating costs, said speakers on the webcast, Energy Outlook: Oil & Gas Dealmaking in 2016, hosted by trade publisher the Deal. Those producers that are unable to turn an operating profit are "essentially in liquidation," said Mr. Hersh. "Those assets are in fact, in low prices, liabilities," said Mr. Hersh. "If the bond holders take them back, they are going to take back an asset that needs to be fed cash in order to wait for the downturn...to end." Still, Mr. Hersh, whose NGP is partly owned by Carlyle Group, ended his comments on a positive note. "The [exploration and production] industry has really done amazing things in this country, where the Middle Eastern community completely, in my opinion, misunderstood the extent of American ingenuity," said Mr. Hersh. "The unconventional shale revolution was not brought to you by the major oil companies," he continued. "This was brought to you by the thousands of independent oil and gas producers, who were really working on really tight rock and trying to find ways to make it work." The shale revolution has reduced the average costs of production to between $30 and $50 a barrel, from $60 to $80 a barrel, according to Mr. Hersh. While acknowledging that lower production costs aren't enough to help some producers at a time when oil trades at between $30 and $40 a barrel, Mr. Hersh said other producers can still "stay alive covering [their] operating costs." "That wouldn't have been the case three years ago," Mr. Hersh said. "People wouldn't have guessed that." "So I'm hopeful because of what this industry has been able to do, with really great independent oil and gas operators, applying good, old-fashioned business skills and using new technologies where they can," he said. http://www.ngpenergycapital.com Write to Shasha Dai at asknewswires@wsj.com Credit: By Shasha Dai
Subject: Petroleum industry; Acquisitions & mergers; Operating costs; Webcasting
Company / organization: Name: Carlyle Group; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 4, 2016
Section: Pro Priv ate Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778079207
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778079207?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Kicking the Oil Business When It's Down; Rising regulatory scrutiny of banks that lend to energy companies is tightening the screws on fossil fuels.
Author: Tice, Paul H
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Apr 2016: n/a.
Abstract:
[...]the effect will be mainly felt on bank earnings, not on liquidity or solvency, and the losses will not pose a risk of contagion to the rest of the financial system. Since the 2008 financial crisis, U.S. banks have slowly been converted into the equivalent of regulated utilities.
Full text: Crude oil prices have dropped precipitously over the past 18 months, and while there has been a recent uptick, the energy industry is struggling. Despite laying off workers, cutting capital budgets and refinancing debt, 45 U.S. oil and gas companies have filed for bankruptcy since the beginning of 2015, with more expected to follow. Despite the strategic importance of oil and gas production to the U.S. economy and even its national security, however, the Obama administration has continued to push its climate-change agenda, leading to new rules, regulations and restrictions on fossil fuels. The net effect will be to raise companies' operating costs and limit their financing options. The Environmental Protection Agency proposed new rules in 2015 to curtail methane emissions from new oil and gas wells and is now readying additional restrictions on existing wells. Also last year, the Interior Department announced new disclosure requirements and operating procedures for hydraulic fracturing ("fracking") on federal lands. Then came the State Department's gratuitous rejection of the Keystone XL pipeline in November. In his recently released fiscal 2017 federal budget, President Obama proposed a confiscatory $10.25 per barrel tax on oil--when West Texas Intermediate (WTI) crude was trading at $30 per barrel. Most damaging is the regulatory pressure being applied through the banking system, which has dampened the credit available for energy companies. Oil and gas development is capital-intensive and marked by a depleting resource base and a continuing need for external financing, particularly when commodity prices are low. Access to credit is the industry's Achilles' heel. Bank loans backed by the value of oil and gas reserves are the cheapest type of financing and the main source of liquidity for upstream drilling programs. The value of the loan collateral--and the company's line of credit--is redetermined semiannually--typically every October and April--to reflect real-time commodity prices and current company and industry fundamentals. In other words, these asset-backed loans are effectively callable every six months, thus limiting a bank's exposure to loan losses or defaults. Nonetheless, since oil prices started to decline in mid-2014, the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. have all increased their regulatory scrutiny of banks in the energy-lending business. This is allegedly due to concerns over the adequacy of banks' capital and the potential for losses spreading through the financial system. However, by any measure, the risk to the banking system from energy loans appears manageable. In the 2015 Shared National Credit (SNC) review conducted by bank regulators, the amount of oil and gas commitments across the federally supervised banking system totaled $276.5 billion or only 7.1% of aggregate SNC loans. For perspective, this is much less than the $1.3 trillion of student loans currently outstanding, which have a delinquency rate of roughly 20%-25%. Apart from a handful of energy-focused regional banks, most U.S. banks have less than 5% of their total loan portfolios concentrated in energy. Furthermore, most bank loans to oil and gas companies are made to investment-grade companies with diversified operations and strong balance sheets. For smaller high-yield and private energy companies, bank loans are almost always secured by a first lien, which makes them much more likely to be repaid in the case of a default. Despite the facts, all three federal agencies have been publicly warning banks about their exposure to the oil and gas industry, the press coverage of which has only served to increase the correlation between WTI futures and bank share prices. This will lead to further cuts in financing for many cash-starved energy companies, turning a challenging credit situation into a potential liquidity crisis. Current estimates are that banks will reduce most energy company credit lines by roughly 20%-40% this month, compared with an average reduction of 5%-10% last fall. There will be losses on loans to energy companies, and banks will no doubt increase their loss provisions. But the effect will be mainly felt on bank earnings, not on liquidity or solvency, and the losses will not pose a risk of contagion to the rest of the financial system. Since the 2008 financial crisis, U.S. banks have slowly been converted into the equivalent of regulated utilities. So it is fair to ask whether the climate-change ideology of the Obama administration is driving the current aggressive approach of bank regulators toward energy loans and, in turn, if this will have a chilling effect on bank lending to the oil and gas industry going forward. Many large U.S. banks--including J.P. Morgan Chase, Bank of America, Citigroup and Wells Fargo--have recently announced that they will no longer finance coal mines or coal-fired power generation. Crude oil and natural gas production may not be far behind. Mr. Tice is a senior managing director and head of the Energy Capital Group at USCA Asset Management LLC. Credit: By Paul H. Tice
Subject: Banking industry; Regulation of financial institutions; Petroleum industry; Energy economics; Loans; Bank earnings; Regional banks; Lines of credit; Crude oil prices; Energy industry; Natural gas utilities; Hydraulic fracturing; Natural gas reserves; Oil reserves
Location: United States--US
Company / organization: Name: Federal Deposit Insurance Corp; NAICS: 524128; Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Office of the Comptroller of the Currency; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 4, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778225870
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778225870?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Drop Further; OPEC Meeting in Focus; June Brent crude fell $0.17 to $37.52 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Apr 2016: n/a.
Abstract:
Oil prices rallied last month on expectations that major oil players inside and outside of the Organization of the Petroleum Exporting Countries were inching toward a collective production freeze at January levels.
Full text: Oil prices slid further in early Asian trade Tuesday, on mounting skepticism that key global crude producers would reach an agreement to freeze production at a meeting later this month. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $35.48 a barrel, down $0.24. June Brent crude on London's ICE Futures exchange fell $0.17 to $37.52 a barrel. Oil prices rallied last month on expectations that major oil players inside and outside of the Organization of the Petroleum Exporting Countries were inching toward a collective production freeze at January levels. However, the gains evaporated in the past few days after Saudi Arabia said Friday it would only freeze production if Iran follows suit. Iran has ruled out freezing output until its production recovers to pre-sanction levels, and the country's oil minister said Sunday that its oil exports rose further in March. ANZ Research said money managers "have started to turn bearish and are likely to remain cautious until the April 17 meeting." This week, market players will be watching weekly U.S. crude production and inventory data from the Energy Information Administration due Wednesday. U.S. crude stockpiles likely grew by 2.9 million barrels in the week ended April 1, pricing provider Platts said, based on its survey of analysts. "With U.S. refinery run rates already quite high, the potential for data this week to show further increases appears limited, and this could keep crude stocks [from] building until the arrival of summer demand," Platts said, adding that the refining rate will likely be unchanged from a week earlier. The agency said U.S. gasoline stocks likely fell 1.6 million barrels and distillate stocks likely declined by 1 million barrels in the same week. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 6 points to $1.3776 a gallon, while May diesel traded at $1.0850, 39 points lower. ICE gasoil for April changed hands at $318.50 a metric ton, down $10.25 from Monday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Petroleum industry; Supply & demand; Crude oil prices
Location: Iran United States--US Saudi Arabia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 5, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778271887
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778271887?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Fund Chief Survives Oil's Swings; Pierre Andurand's fund is one of only a few to correctly call oil-price moves since summer 2014 as many peers shut down
Author: Fletcher, Laurence; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Apr 2016: n/a.
Abstract:
Big names including Andrew Hall's Astenbeck Capital notched big losses last year due to an overly bullish stance, while funds run by Brigade Capital Management and King Street Capital Management lost money after investing in oil firms' debt too early last year.
Full text: A day after oil prices plunged to a 13-year low in January, Pierre Andurand, a French hedge-fund manager who made millions betting against crude, started buying. For the former Goldman Sachs energy trader, one of the last commodity hedge-fund traders left standing in an oil slump littered with casualties, it was the first bet on rising prices since 2014. So far, his timing has proved correct. Despite investors' widespread fears of a persistent crude glut, the price of Brent, the international benchmark, has rallied close to 30% since Mr. Andurand's call on Jan. 21. "I started to have a lot of signals showing the market may be turning" from mid-December, Mr. Andurand, a kickboxing devotee with a reputation for aggressive trades, said in a recent interview at his firm's London offices. In March, he predicted a "multiyear bull run," according to a letter to investors reviewed by The Wall Street Journal. Andurand Capital Management LLP, set up three years ago from the ashes of $2.4 billion hedge fund BlueGold Capital Management LP, has been one of only a handful of funds globally to correctly call moves in the price of oil since the summer of 2014, when crude began its marked slump. Having bet against oil in September 2014, Mr. Andurand's fledgling fund gained almost 60%--a profit of $160 million--in four months as the price of oil almost halved. Hedge funds on average gained 0.1% over that period, according to Hedge Fund Research. So far this year, Andurand's $710 million fund is up 5.8%. In contrast, the sharp downturn in commodity prices in recent years has left many mining and energy companies strapped for cash, forcing hedge funds run by firms including Clive Capital, Centaurus Capital and Brevan Howard to shut down. Big names including Andrew Hall's Astenbeck Capital notched big losses last year due to an overly bullish stance, while funds run by Brigade Capital Management and King Street Capital Management lost money after investing in oil firms' debt too early last year. Mr. Andurand started betting against oil in late September 2014 because he had become concerned about sluggish global oil demand and burgeoning supply from the U.S. and Libya. Two months later, the Organization of the Petroleum Exporting Countries surprised the market by refusing to cut its output as it had in previous episodes of oversupply. The result of that meeting was "so clear a confirmation" of Mr. Andurand's views that he raised his position. "We had to increase relatively fast because we knew it would be a catalyst for a price move," he said. However, memories of past losses kept his position below the maximum he could run. "I had very high conviction level, but I got burned a few times a few years before, so I was still a little cautious," said Mr. Andurand, whose BlueGold fund chalked up huge gains during the credit crisis before folding after large losses in 2011. His new fund returned 38% in 2014, ranking it as one of the world's top-performing hedge funds, thanks to the bet on falling oil prices. Last year proved harder. Despite being correctly positioned--oil fell 35% in 2015--Mr. Andurand was hit by sharp bear-market rallies, particularly in April. "The fundamental view was right, but it was difficult to generate really high returns from it" without risking big losses, he said. It was sticking with the position, rather than the size of the bet, that made the money, he said. Last year's more modest 4% return beat hedge funds' average 1.1% loss, according to HFR. Mr. Andurand's decision to flip his bets and start buying this year was based on his view that prices have fallen enough to induce falling supply. Oil prices are down close to 70% from the summer of 2014, pushed down by a global oversupply of crude. In recent weeks, oil prices also have been supported by hopes that major producers will agree to limit their output. Around a dozen oil-producing countries, including Saudi Arabia and Russia, will meet April 17 to discuss a deal to freeze output at January levels, though some analysts are skeptical that the producers will reach an agreement. Mr. Andurand doesn't think that such limits are needed. "You have 3.5% of world oil supply that is forever below cash cost," he said. "We see production declines already coming from a lot of countries--U.S. output is falling, but also China, Azerbaijan, Kazakhstan, Mexico...." Mr. Andurand prefers to form such trading views in the silence of his own office--fitted with an ivory leather couch and floor-to-ceiling windows that look out onto luxury department store Harrods--by reading reams of analysis, rather than amid the chatter of peers. Guests enter the trading floor between two large fish tanks, designed to add a calming influence. "I need to be really quiet," he said. "In order to be an independent thinker, you should not speak to too many people." He is the final decision maker on the fund. "I don't need other people agreeing with the view," he said, adding that the fund's risk limits help protect against losses. "Sometimes it will be too late before everybody agrees." Mr. Andurand, 39 years old, was born in France but spent six years growing up on the small French island of Reunion off the coast of Madagascar, because his father, a civil servant who bought guidance equipment for planes, wanted to live somewhere with better weather. Mr. Andurand began trading energy for Goldman Sachs Group Inc. in Singapore, when the oil price wasn't far from today's levels. He moved to Bank of America Corp. and then Vitol Group, the world's biggest independent oil trader, which transferred him to London. It was there that he branched out, co-founding BlueGold Capital with trader Dennis Crema. The fund began trading in February 2008, shortly before the financial crisis took hold. The fund made more than 30% in February alone and a staggering 209% that year, after betting against oil in the final four months of the year, as Lehman Brothers collapsed and oil plunged 60%. They then flipped the bet just as oil was starting a long recovery. But the venture didn't end well. BlueGold shut down in 2012 after losing more than one-third the previous year, including a 23% loss in May 2011 alone, as its bullish bets were hit by falling prices. Mr. Andurand said the closure was unrelated to the losses and instead due to his desire to part ways with his partner. At the time, Mr. Andurand also veered off into investing in equities, a move questioned by some investors. This time around, the fund has stuck to trading oil. Write to Laurence Fletcher at laurence.fletcher@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Laurence Fletcher and Georgi Kantchev
Subject: Hedge funds; Petroleum industry; Prices
Company / organization: Name: Centaurus Capital; NAICS: 523930; Name: Andurand Capital Management LLP; NAICS: 525990; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 5, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778336116
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778336116?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks Fall Ahead Of Earnings, and Oil Tumbles 3%
Author: Gold, Riva; Kuriloff, Aaron
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Apr 2016: C.4.
Abstract:
On Monday, the International Monetary Fund said problems in emerging markets, such as China, could translate into a drop in stock prices in the U.S. and elsewhere.
Full text: U.S. shares pulled back and oil prices slid, eroding a recent rally that sent major stock indexes to fresh highs for the year. Several investors said the global economic picture remains uncertain ahead of what could be a bleak corporate-earnings season, raising doubts about whether stocks can sustain the gains made since February's lows. "We're starting to head into earning season, which I think will be a splash of cold water on the market's bullishness," said Erik Davidson, chief investment officer at Wells Fargo Private Bank. The Dow Jones Industrial Average declined 55.75 points, or 0.3%, to 17737.00, while the S&P 500 fell 6.65, or 0.3%, to 2066.13 and the Nasdaq Composite dropped 22.75, or 0.5%, to 4891.80. Commodities prices slipped, weighing on energy and materials shares. U.S. crude-oil prices fell 3% to $35.70 a barrel, with investors skeptical that a global agreement on oil-output levels will be reached in Doha, Qatar, on April 17, after Saudi Arabia on Friday said it would freeze production only if Iran did, too. Mining company Freeport-McMoRan fell 47 cents, or 4.8%, to $9.42, while aluminum producer Alcoa dropped 23 cents, or 2.4%, to 9.40. Major U.S. indexes have rallied for six of the past seven weeks. Many investors took comfort in Friday's solid reading on U.S. manufacturing activity and the March jobs report, which further eased worries about the strength of the U.S. economy. However, concerns about sluggish global growth remain, leaving some investors watching for a pullback. On Monday, the International Monetary Fund said problems in emerging markets, such as China, could translate into a drop in stock prices in the U.S. and elsewhere. "I think it's a very confused market right now," said Craig Sterling, head of equity research at Pioneer Investments. The yield on benchmark 10-year U.S. government debt reached its lowest level in more than a month, highlighting demand for safe assets. In late-afternoon trading, the yield on the benchmark 10-year Treasury note fell to 1.779%, from 1.793% Friday. That marked the yield's lowest closing level since Feb. 29. Yields fall as bond prices rise. Most investors expect the Federal Reserve to maintain its slow path toward higher interest rates after Chairwoman Janet Yellen last week said policy makers would proceed cautiously. The Fed's minutes from its March meeting could give further insight into the central bank's stance on Wednesday. Several Fed officials also are scheduled to deliver speeches throughout the week. While Friday's economic data were solid, "the Fed's hand isn't changed one way or another," said Ernie Cecilia, chief investment officer at Bryn Mawr Trust. "Any near-term rate increase is on the back burner for now," he said. A falling dollar has helped boost stocks in recent weeks. The dollar fell 0.3% against the yen to 111.33 yen Monday, while the euro was unchanged against the dollar at $1.1392. Biotechnology stocks, among the biggest laggards of 2016, rose. The Nasdaq Biotechnology Index gained 0.9%, trimming 2016 losses to 20%. Health-care companies were the biggest gainers in the S&P 500, rising 1%. Edwards Lifesciences led the gains, adding 15.16, or 17%, to 105.08, after reporting over the weekend positive results in tests of its heart-valve replacement. Vertex Pharmaceuticals rose 3.72, or 4.7%, to 82.87. Asian stocks moved lower early Tuesday. Japan's Nikkei was down 1.5%, Hong Kong's Hang Seng was down 1.2%, Australia's S&P ASX 200 was off 1%, while the Shanghai Composite was down 0.2%. Credit: By Riva Gold and Aaron Kuriloff
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Apr 5, 2016
column: Monday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778346602
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778346602?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Stages Late Rally; Negative fundamentals drag prices as few believe Qatar meeting will lead to production cuts
Author: Baxter, Kevin; Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Apr 2016: n/a.
Abstract:
The market is also monitoring developments around a meeting of major sovereign producers in Qatar later this month at which they are expected to discuss freezing output levels; participating countries, which include members and nonmembers of the Organization of the Petroleum Exporting Countries, have sent mixed signals about whether an agreement will be reached or how effective it will be.
Full text: U.S. and global oil markets managed to grind out gains Tuesday, rallying in the final minutes of trading after chopping around the break-even point most of the session. The benchmark U.S. oil contract surged into the close of trading, ending the day up 0.5% at $35.89 on the New York Mercantile Exchange, after spending much of the day in negative territory. The global Brent contract rose 0.5% to $37.87 a barrel on the ICE Futures Europe exchange. Analysts and brokers were hard-pressed to explain the late-session surge, and there was little in the way of headlines that explained the jump. In the mild trading that dominated before the end of the day, the market appeared to be taking a breather on a light news day after a 50% run-up between February and March followed by a 13% selloff in the last two weeks. "It's been a pretty strong slide," said Robert Yawger, director of futures at Mizuho Securities U.S.A. The market is gearing up for the release of weekly inventory data from industry trade group American Petroleum Institute late Tuesday, and official U.S. Energy Department data Wednesday morning. U.S. oil inventories are expected to have risen 3.3 million barrels last week, according to the consensus estimate of analysts surveyed by The Wall Street Journal. Inventories have been rising for the last seven weeks and are now near all-time highs. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 4.3-million-barrel decrease in crude supplies, a 100,000 barrel decrease in gasoline stocks and a 2.7-million-barrel rise in distillate inventories, according to market participants. The market is also monitoring developments around a meeting of major sovereign producers in Qatar later this month at which they are expected to discuss freezing output levels; participating countries, which include members and nonmembers of the Organization of the Petroleum Exporting Countries, have sent mixed signals about whether an agreement will be reached or how effective it will be. Commerzbank described the fall in price as a "correction" to what it saw as an artificial high last month. The rally was built on hope that sovereign producers including Saudi Arabia, Russia and several others, would agree to freeze output at January levels when they meet in Doha on April 17. But hope for an agreement has faded as Saudi Arabia insists Iran joins any agreement; Iran has said it won't freeze production until it restores output to pre-sanction levels. And Russia has boosted its own production to a record high. Still, the market got some support Tuesday from comments by a Kuwaiti oil minister saying she expected participating nations to come to a deal. Also, the second quarter is traditionally a slow period for crude demand as refineries enter maintenance periods ahead of the peak summer driving season. And Asia may have bought more oil than it needs recently, according to think tank Energy Aspects, which said in a note: "It seems like Asia may have somewhat overdone the crude buying and is therefore pausing for breath." February's 11% uptick in Iranian imports to India, one of Saudi Arabia's largest customers, was likely to be the major factor in Riyadh's change of heart, said Michael Poulsen, oil risk manager with the Copenhagen-based oil traders Global Risk Management. Analysts expect a build of 3.3 million barrels, with any further rise likely to trigger further bearish sentiment. In refined product markets, gasoline futures rose 0.1% to $1.3778 a gallon and diesel futures fell 1.3% to $1.0746 a gallon. Write to Kevin Baxter at Kevin.Baxter@wsj.com and Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Kevin Baxter and Christian Berthelsen
Subject: Petroleum industry; Agreements; Inventory; Futures
Location: United States--US Saudi Arabia
Company / organization: Name: American Petroleum Institute; NAICS: 813910, 541820; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 5, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778384723
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778384723?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Calgary Home Market Struggles With Oil Bust; Capital of Canada's energy sector suffers more than other big oil cities like Houston
Author: Kusisto, Laura; Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Apr 2016: n/a.
Abstract:
[...]Calgary's oil industry is more dependent on a pricey method of extraction that is more vulnerable to a drop in oil prices. The Property Report * Chinese Developers Aim to Expand in Canada * Weak Loonie Lures U.S. Home Buyers to Canada * Surge in Land Prices Adds Froth to Vancouver Market Averages home prices in Calgary have fallen nearly 5% from their high of C$491,609 in June 2014.
Full text: The housing market in Calgary, capital of Canada's struggling energy sector, has been hit so hard it makes the challenges faced by U.S. oil towns look relatively mild. March home sales volume tumbled 11% from the same period last year, according to the Calgary Real Estate Board. Some 2,000 miles to the south in the headquarters of the U.S. oil industry, Houston, home sales were up 2% in February--the most recent data available--compared with the same month last year, according to the Houston Association of Realtors. In Calgary the slowdown also has been felt by a wider range of homeowners. In Houston most of the pain so far is being felt among sellers of high-end homes priced at $500,000 and above--a sector that saw a 12% decrease in sales volume in the year ended in February. Until recently, this was also true in Calgary. The slowdown had been more or less confined to high-end homes worth C$700,000 (US$534,800) and higher. But now that trend is playing out in lower price ranges as well, especially in the C$500,000 to C$600,000 range, which includes the majority of the detached homes, according to Ann-Marie Lurie, chief economist with the Calgary Real Estate Board. Meanwhile, brokers in Calgary are reporting that sellers have been offering a wide range of incentives to buyers, including a Tesla in one case. Many prospective buyers are retreating to the sidelines in that city, brokers say. "I haven't got a buyer in real estate right now who isn't petrified to even buy," said Keith Crawford, a Calgary-based realtor with Century 21, adding buyers aren't sure if prices have hit a bottom. Calgary's housing market is suffering more partly because this city of about 1.2 million people has a less diversified economy than Houston. Also, Canada's economy overall also is still vulnerable to a slowdown right now, while the U.S. economy remains strong. Finally, Calgary's oil industry is more dependent on a pricey method of extraction that is more vulnerable to a drop in oil prices. "We are a higher-cost producer area. And we can see it with these lower [oil] prices. It really has translated into significant amount of layoffs," said Ann-Marie Lurie, chief economist with the Calgary Real Estate Board. Natural-resources employment in Alberta, the province that includes Calgary, decreased by 7,400, according to the Alberta Treasury Board and Finance, helping bring the unemployment rate to 7.9%--the highest in two decades. By contrast, the unemployment rate is a still-modest 4.8% in Houston, which also has employers in health care and aerospace. Much like Houston, Calgary's real-estate market was more deeply affected when oil prices declined during the 1980s. "In the '80s, it was a far steeper impact because at that time, we were even more reliant on oil than we are today," Ms. Lurie said. The Property Report * Chinese Developers Aim to Expand in Canada * Weak Loonie Lures U.S. Home Buyers to Canada * Surge in Land Prices Adds Froth to Vancouver Market Averages home prices in Calgary have fallen nearly 5% from their high of C$491,609 in June 2014. That is still well below the 25% drop they took in the 1980s, not adjusted for inflation. Calgary's average home price was C$468,572 in March, down more than 1% compared with the same month last year, according to the Calgary Real Estate Board. In Houston, the average home price edged up 0.5% to nearly $261,000 in February compared with one year earlier, according to the Houston Association of Realtors. Brokers say that the incentives being offered by Calgary home sellers indicate even a greater disparity. Their value is worth about C$3,000 to C$5,000, according to Roy Almog, founder of 2% Realty Inc., a discount brokerage. Typically, those inducements include cash back on closing--funds that could be used to finish a basement, as an example. In other cases, home sellers dangle other goodies such as offers to pay a buyer's condo fees for the first year. Incentives on luxury homes have included golf memberships, but those offers have curtailed a bit. "It's just not selling and so people, for the most part, have taken those homes off the market," said Keith Crawford, a Calgary-based realtor with Century 21. Mr. Crawford recently tried to sell a luxury home, listed over C$2 million, that came with an unusual perk: a free Tesla. When that didn't work, he simply lowered the price by an additional C$250,000. The slowdown in Calgary has rippled through the office and apartment rental markets. Calgary's downtown office market, once the envy of landlords everywhere, has seen a reversal of fortunes. The market has been flooded with space from companies rushing to sublease as well as new supply from towers that broke ground during headier times. This has sent the vacancy rate soaring past 17%, from less than 6% at the end of 2012, while rents have tumbled more than 30% in the same period, according to CBRE Group Inc. By comparison, the Houston office market is also reeling from an abundance of new supply and sublease space, though rents have been more stubborn--staying relatively flat during the same period. Many local real-estate executives expect rents to fall once more landlords come to terms with the new reality. In Houston, most analysts expect the rental market to fare the worst in the coming year because falling demand is colliding with a flood of new supply. Rent growth in Houston has slowed for 13 of the past 14 months, according to apartment-research firm Axiometrics Inc. Rents inched up just 0.7% in February, the firm said. Vacancies climbed to 6.6% from 5.8% in the same month last year. Investment-research firm Green Street Advisors expects rents to actually decline by 1.5% this year. "We think the Houston market continues to weaken and our expectations are that it will be worse this year than most expect," said Green Street analyst Dave Bragg. Similarly, the apartment rental market in Calgary is also suffering from rising vacancies. Vacancy rates in rental apartment buildings in the Calgary Census Metropolitan Area rose to 5.3% in October 2015 from 1.4% in the previous year, according to the Canada Mortgage and Housing Corporation. "The longer you have these people unemployed, the more we start to see it impact all aspects of the market," said Ms. Lurie, of the Calgary Real Estate Board. Eliot Brown contributed to this article. Write to Laura Kusisto at laura.kusisto@wsj.com and Rita Trichur at rita.trichur@wsj.com Credit: By Laura Kusisto and Rita Trichur
Subject: Real estate sales; Houses; Housing prices; Economic conditions; Unemployment; Homeowners
Location: United States--US Canada Calgary Alberta Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 5, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Busines s And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778463749
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778463749?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shell Ends Bid to Drill in Norway's Frontiers; The move represents a setback for Norway's nascent Arctic oil and gas ambitions
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Apr 2016: n/a.
Abstract:
OSLO--Royal Dutch Shell PLC is backing away from further energy exploration in frontier areas off Norway, the oil giant said on Monday, as it deals with weak prices for crude and shifts focus after a recent merger with BG Group PLC . The Anglo-Dutch firm's move represents a setback for Norway's nascent Arctic oil and gas ambitions and illustrates the Anglo-Dutch company's repositioning following its roughly $50 billion takeover of BG earlier this year.
Full text: OSLO--Royal Dutch Shell PLC is backing away from further energy exploration in frontier areas off Norway, the oil giant said on Monday, as it deals with weak prices for crude and shifts focus after a recent merger with BG Group PLC . The Anglo-Dutch firm's move represents a setback for Norway's nascent Arctic oil and gas ambitions and illustrates the Anglo-Dutch company's repositioning following its roughly $50 billion takeover of BG earlier this year. That deal closed in February and is intended to restructure the company strategically with an intensified focus on fast-growing liquefied natural gas markets and large deepwater developments. Related * Oil Firms Slow Exploration to Weather Low-Price Era * Woodside Petroleum Shelves Browse LNG Project * Shell Completes Acquisition of BG Group For now, costly and uncertain Arctic exploration doesn't seem to fit in the new portfolio. On top of that, the sharp slide in oil prices over the past two years has made relatively expensive oil and gas exploration in Arctic frontier waters less attractive. "The market situation is very challenging," said Andy Brown, head of oil and gas production at Shell. The company, which applied for several oil-exploration licenses in December, had already indicated it would reduce exploration in frontier areas for a period after the February merger with BG, Mr. Brown added. It is the latest blow to controversial moves to explore for oil and gas in virgin Arctic waters, where projects from the U.S. to Russia have faced delays and cancellations. Shell already scrapped one major push to find Arctic oil reserves offshore Alaska last year after sinking $7 billion on an exploration push that resulted in one of the industry's most expensive dry holes. Slumping oil prices, environmental protests and sanctions against Russia have all served to dampen the industry's enthusiasm for the largely unexplored region. Other energy giants including Exxon Mobil Corp., Chevron Corp. and Norway's Statoil ASA have shelved Arctic projects since oil prices began their long descent almost two years ago. In Norway, Italian oil company Eni SpA and Statoil's efforts to get oil pumping from the Barents Sea have faced numerous setbacks, delays and cost overruns. Oil prices have collapsed over the past two years, bringing the cost of a barrel down below $30 a barrel in early 2016, from above $100 between 2011 and 2014. Brent crude traded Tuesday at around $37 a barrel. Norway this summer expects to award its first new acreage since 1994, in its 23rd licensing round in the arctic, based on applications from 26 oil and gas companies. Exploration drilling is expected to start in 2017. "Shell has notified us that its decision [to pull the application] is based on short-term cash flow concerns and consolidation after the BG acquisition," said Tord Lien, Norway minister of petroleum and energy. "Shell is a competent and strong company that I'd like to see competing for new acreage on the Norwegian shelf," he added. Shell had applied for several licenses in Norway's southeastern Barents Sea, a previously disputed arctic area bordering Russia. The company said in December that it had relevant experience from operations in Alaska, Sakhalin in Russia and Greenland. "The situation requires that we prioritize global activities that will yield revenues earlier than what a discovery in the Barents Sea would have done," said Tor Arnesen, head of Shell's Norwegian operations. Shell has said it expects to spend $33 billion this year in capital investment, but according to analysts at Bernstein, that number could be reduced to $28 billion, as a result of reduced spending on exploration, cost reductions and project delays. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Petroleum industry; Prices; Natural gas utilities
Location: Norway Arctic region Russia
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Woodside Petroleum Ltd; NAICS: 211111; Name: Statoil ASA; NAICS: 324110, 211111; Name: Eni SpA; NAICS: 324110, 211111; Name: Chevron Corp; NAICS: 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 5, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778495898
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778495898?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Rally on Kuwait's Support for Production Freeze; Brent crude on London's ICE Futures exchange rose $0.65 to $38.52
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Apr 2016: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its own data for the period showed a 4.3-million-barrel drop in crude supplies, a 100,000 barrel decrease in gasoline stocks and a 2.7-million-barrel rise in distillate inventories, according to market participants.
Full text: Crude-oil prices were on a positive course in early Asia trade on Wednesday, driven by hopes that key global producers may agree to a production freeze later this month despite an escalating tussle between Iran and Saudi Arabia over the issue. Prices rose overnight after Kuwait, a heavyweight in the Organization of the Petroleum Exporting Countries, expressed confidence that players within and outside the bloc will move ahead with the proposal to limit crude output. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $36.88 a barrel at 0210 GMT, up $0.99 in the Globex electronic session but around 38% lower from a year ago. June Brent crude on London's ICE Futures exchange rose $0.65 to $38.52 a barrel, down roughly 42% from the previous year. Oil prices have been rangebound for months on speculation of a possible production freeze. Some analysts say that even if an agreement is reached at the Doha meeting on April 17, the move is unlikely to make any significant dent given persistent oversupply. Others view it as a step toward rebalancing the market. However, sentiment fell last week after Saudi Arabia, OPEC's largest producer and one of the original initiators of the plan, said Friday it would back out unless Iran is on board. Tehran plans to increase output until it reaches pre-sanction levels of around 4 million barrels a day. "Oil prices are mainly moving on rhetoric by OPEC officials and not fundamental changes. Market watchers will be keeping their ears sharp until the suspense of a possible production freeze is over," said Barnabas Gan, an OCBC commodities analyst. BMI Research said an agreement to freeze production "looks increasingly less likely" and expects any price-supportive communique from the meeting to be short-lived. The weekly U.S. crude inventories and production data are scheduled for release on Wednesday. Based on a Wall Street Journal survey, U.S. oil inventories are expected to have risen 3.3 million barrels last week. Inventories have been rising for the past seven weeks and are approaching all-time highs. The American Petroleum Institute, an industry group, said late Tuesday that its own data for the period showed a 4.3-million-barrel drop in crude supplies, a 100,000 barrel decrease in gasoline stocks and a 2.7-million-barrel rise in distillate inventories, according to market participants. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 101 points to $1.3879 a gallon, while May diesel traded at $1.0900, 154 points higher. ICE gasoil for April changed hands at $318.25 a metric ton, up $3.75 from Tuesday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Petroleum industry; Inventory
Location: Kuwait Iran Asia Saudi Arabia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778511660
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778511660?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
International Property: Canada: Oil Bust Squeezes Calgary Home Sales --- Capital of Canada's energy sector suffers more than other big oil cities like Houston
Author: Kusisto, Laura; Trichur, Rita
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Apr 2016: C.6.
Abstract:
[...]that trend is playing out in lower price ranges as well, especially in the C$500,000 to C$600,000 range, which includes the majority of the detached homes, according to Ann-Marie Lurie, chief economist with the Calgary Real Estate Board. [...]Calgary's oil industry is more dependent on a pricey method of extraction that is more vulnerable to a drop in oil prices.
Full text: The housing market in Calgary, capital of Canada's struggling energy sector, has been hit so hard it makes the challenges faced by U.S. oil towns look relatively mild. March home-sales volume tumbled 11% from the same period last year, according to the Calgary Real Estate Board. Some 2,000 miles to the south in the headquarters of the U.S. oil industry, Houston, home sales were up 2% in February -- the most recent data available -- compared with the same month last year, according to the Houston Association of Realtors. In Calgary, the slowdown also has been felt by a wider range of homeowners. In Houston most of the pain so far is being felt among sellers of high-end homes priced at $500,000 and above -- a sector that saw a 12% decrease in sales volume in the year ended in February. Until recently, this also was true in Calgary. The slowdown had been more or less confined to high-end homes worth C$700,000 (US$534,800) and higher. But now that trend is playing out in lower price ranges as well, especially in the C$500,000 to C$600,000 range, which includes the majority of the detached homes, according to Ann-Marie Lurie, chief economist with the Calgary Real Estate Board. Meanwhile, brokers in Calgary are reporting that sellers have been offering a range of incentives to buyers, including a Tesla automobile in one case. Many prospective buyers are retreating to the sidelines in that city, brokers say. "I haven't got a buyer in real estate right now who isn't petrified to even buy," said Keith Crawford, a Calgary-based realtor with Century 21, adding buyers aren't sure if prices have hit a bottom. Calgary's housing market is suffering more partly because this city of about 1.2 million people has a less diversified economy than Houston. Also, Canada's economy overall also remains vulnerable to a slowdown right now, while the U.S. economy remains strong. Finally, Calgary's oil industry is more dependent on a pricey method of extraction that is more vulnerable to a drop in oil prices. "We are a higher-cost producer area. And we can see it with these lower [oil] prices. It really has translated into significant amount of layoffs," Ms. Lurie said. Natural-resources employment in Alberta, the province that includes Calgary, decreased by 7,400, according to the Alberta Treasury Board and Finance, helping bring the unemployment rate to 7.9% -- the highest in two decades. By contrast, the unemployment rate is a still-modest 4.8% in Houston, which also has employers inhealth care and aerospace. Much like Houston, Calgary's real-estate market was more deeply affected when oil prices declined during the 1980s. "In the '80s, it was a far steeper impact because at that time, we were even more reliant on oil than we are today," Ms. Lurie said. Averages home prices in Calgary have fallen nearly 5% from their high of C$491,609 in June 2014. That still is well below the 25% drop they took in the 1980s, unadjusted for inflation. Calgary's average home price was C$468,572 in March, down more than 1% compared with the same month last year, according to the Calgary Real Estate Board. In Houston, the average home price edged up 0.5% to nearly $261,000 in February compared with one year earlier, according to the Houston Association of Realtors. Brokers say that the incentives being offered by Calgary home sellers indicate even a greater disparity. Their value is worth about C$3,000 to C$5,000, according to Roy Almog, founder of 2% Realty Inc., a discount brokerage. Typically, those inducements include cash back on closing -- funds that could be used to finish a basement, as an example. In other cases, home sellers dangle other goodies such as offers to pay a buyer's condo fees for the first year. Incentives on luxury homes have included golf memberships, but those offers have curtailed a bit. "It's just not selling and so people, for the most part, have taken those homes off the market," said Keith Crawford, a Calgary-based realtor with Century 21. Mr. Crawford recently tried to sell a luxury home, listed at more than C$2 million, that came with an unusual perk: a free Tesla. When that didn't work, he simply lowered the price by an additional C$250,000. The slowdown in Calgary has rippled through the office- and apartment-rental markets. Calgary's downtown office market, once the envy of landlords everywhere, has seen a reversal of fortunes. The market has been flooded with space from companies rushing to sublease as well as new supply from towers that broke ground during headier times. This has sent the vacancy rate soaring past 17%, from less than 6% at the end of 2012, while rents have tumbled more than 30% in the same period, according to CBRE Group Inc. --- Eliot Brown contributed to this article. Credit: By Laura Kusisto and Rita Trichur
Subject: Real estate sales; Housing prices; Economic conditions
Location: Calgary Alberta Canada
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.6
Publication year: 2016
Publication date: Apr 6, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778650273
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778650273?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fund Chief Survives Oil's Swings
Author: Fletcher, Laurence; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Apr 2016: C.1.
Abstract:
[...]the sharp downturn in commodity prices in recent years has left many mining and energy companies strapped for cash, forcing hedge funds run by firms including Clive Capital, Centaurus Capital and Brevan Howard to shut down. Big names including Andrew Hall's Astenbeck Capital notched big losses last year due to an overly bullish stance, while funds run by Brigade Capital Management and King Street Capital Management lost money after investing in oil firms' debt too early last year.
Full text: A day after oil prices plunged to a 13-year low in January, Pierre Andurand, a French hedge-fund manager who made millions betting against crude, started buying. For the former Goldman Sachs energy trader, one of the last commodity hedge-fund traders left standing in an oil slump littered with casualties, it was the first bet on rising prices since 2014. So far, his timing has proved correct. Despite investors' widespread fears of a persistent crude glut, the price of Brent, the international benchmark, has rallied close to 30% since Mr. Andurand's call on Jan. 21. "I started to have a lot of signals showing the market may be turning" from mid-December, Mr. Andurand, a kickboxing devotee with a reputation for aggressive trades, said in a recent interview at his firm's London offices. In March, he predicted a "multiyear bull run," according to a letter to investors reviewed by The Wall Street Journal. Andurand Capital Management LLP, set up three years ago from the ashes of $2.4 billion hedge fund BlueGold Capital Management LP, has been one of only a handful of funds globally to correctly call moves in the price of oil since the summer of 2014, when crude began its marked slump. Having bet against oil in September 2014, Mr. Andurand's fledgling fund gained almost 60% -- a profit of $160 million -- in four months as the price of oil almost halved. Hedge funds on average gained 0.1% over that period, according to Hedge Fund Research. So far this year, Andurand's $710 million fund is up 5.8%. In contrast, the sharp downturn in commodity prices in recent years has left many mining and energy companies strapped for cash, forcing hedge funds run by firms including Clive Capital, Centaurus Capital and Brevan Howard to shut down. Big names including Andrew Hall's Astenbeck Capital notched big losses last year due to an overly bullish stance, while funds run by Brigade Capital Management and King Street Capital Management lost money after investing in oil firms' debt too early last year. Mr. Andurand started betting against oil in late September 2014 because he had become concerned about sluggish global oil demand and burgeoning supply from the U.S. and Libya. Two months later, the Organization of the Petroleum Exporting Countries surprised the market by refusing to cut its output as it had in previous episodes of oversupply. The result of that meeting was "so clear a confirmation" of Mr. Andurand's views that he raised his position. "We had to increase relatively fast because we knew it would be a catalyst for a price move," he said. However, memories of past losses kept his position below the maximum he could run. "I had very high conviction level, but I got burned a few times a few years before, so I was still a little cautious," said Mr. Andurand, whose BlueGold fund chalked up huge gains during the credit crisis before folding after large losses in 2011. His new fund returned 38% in 2014, ranking it as one of the world's top-performing hedge funds, thanks to the bet on falling oil prices. Last year proved harder. Despite being correctly positioned -- oil fell 35% in 2015 -- Mr. Andurand was hit by sharp bear-market rallies, particularly in April. "The fundamental view was right, but it was difficult to generate really high returns from it" without risking big losses, he said. It was sticking with the position, rather than the size of the bet, that made the money, he said. Last year's more modest 4% return beat hedge funds' average 1.1% loss, according to HFR. Mr. Andurand's decision to flip his bets and start buying this year was based on his view that prices have fallen enough to induce falling supply. Oil prices are down close to 70% from the summer of 2014, pushed down by a global oversupply of crude. In recent weeks, oil prices also have been supported by hopes that major producers will agree to limit their output. Around a dozen oil-producing countries, including Saudi Arabia and Russia, will meet April 17 to discuss a deal to freeze output at January levels, though some analysts are skeptical that the producers will reach an agreement. Mr. Andurand doesn't think that such limits are needed. "You have 3.5% of world oil supply that is forever below cash cost," he said. "We see production declines already coming from a lot of countries -- U.S. output is falling, but also China, Azerbaijan, Kazakhstan, Mexico. . . ." Mr. Andurand prefers to form such trading views in the silence of his own office by reading reams of analysis, rather than amid the chatter of peers. Guests enter the trading floor between two large fish tanks, designed to add a calming influence. "I need to be really quiet," he said. "In order to be an independent thinker, you should not speak to too many people." He is the final decision maker on the fund. "I don't need other people agreeing with the view," he said, adding that the fund's risk limits help protect against losses. "Sometimes it will be too late before everybody agrees." Mr. Andurand, 39 years old, was born in France but spent six years growing up on the small French island of Reunion off the coast of Madagascar, because his father, a civil servant who bought guidance equipment for planes, wanted to live somewhere with better weather. Mr. Andurand began trading energy for Goldman Sachs in Singapore, when the oil price wasn't far from today's levels. He moved to Bank of AmericaCorp. andthen Vitol Group, the world's biggest independent oil trader, which transferred him to London. It was there that he branched out, co-founding BlueGold Capital with trader Dennis Crema. The fund began trading in February 2008, shortly before the financial crisis took hold. The fund made more than 30% in February alone and a staggering 209% that year, after betting against oil in the final four months of the year, as Lehman Brothers collapsed and oil plunged 60%. They then flipped the bet just as oil was starting a long recovery. But BlueGold shut down in 2012 after losing more than one-third the previous year, including a 23% loss in May 2011 alone, as its bullish bets were hit by falling prices. Mr. Andurand said the closure was unrelated to the losses and instead due to his desire to part ways with his partner. At the time, Mr.Andurandalso veered off into investing in equities, a move questioned by some investors. This time around, the fund has stuck to trading oil. Credit: By Laurence Fletcher and Georgi Kantchev
Subject: Hedge funds; Petroleum industry
People: Andurand, Pierre
Company / organization: Name: Andurand Capital Management LLP; NAICS: 525990
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 6, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778650669
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778650669?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Soar After Inventory Data; Chinese economic gauge also shows quicker-than-expected improvement
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Apr 2016: n/a.
Abstract:
"Refineries are ramping up to meet gasoline demand" this summer, when drivers are expected to take advantage of cheap gasoline and travel more, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "Refineries are definitely, no doubt about it, using more crude oil than they were last week."
Full text: NEW YORK--Oil prices rallied Wednesday on an unexpected decline in U.S. crude stockpiles. Light, sweet crude for May delivery settled up $1.86, or 5.2%, to $37.75 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose $1.97, or 5.2%, to $39.84 a barrel on ICE Futures Europe. U.S. crude-oil supplies fell by 4.9 million barrels in the week ended April 1, the Energy Information Administration said Wednesday. The prior week, crude stockpiles stood at the highest level in more than 80 years. Analysts surveyed by The Wall Street Journal had expected the EIA to report a 3.3-million-barrels rise. The inventory drawdown was due to a decline in imports and an increase in refinery activity. Refineries ran at 91.4% of capacity last week, the EIA said, up from 90.4% in the prior week. "Refineries are ramping up to meet gasoline demand" this summer, when drivers are expected to take advantage of cheap gasoline and travel more, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "Refineries are definitely, no doubt about it, using more crude oil than they were last week." However, the drop in imports was due to fog in the Houston Ship Channel, and imports are likely to rise again next week, said Matt Smith, director of commodity research at shipping tracker ClipperData. The price gains are "a knee-jerk reaction to a bullish headline crude number," Mr. Smith said. "But given that we should see a return to [inventory] builds next week, it seems like this could be a temporary move." Supplies of gasoline and distillates, including heating oil and diesel fuel, unexpectedly rose. Gasoline futures recently rose 1.4% to $1.3969 a gallon. Diesel futures rose 5.1% to $1.1294 a gallon. U.S. crude production fell by 14,000 barrels a day in the week but held above 9 million barrels a day, the EIA said. Investors are closely watching the 9-million-barrel mark. This week's data "would imply that we're going to slide below 9 million next week," Mr. Yawger said. "That's positive for the market." In China, a private gauge of service activity showed a faster pace of expansion last month following moves by Beijing to prop up growth after a shaky start of the year. China is the world's second largest oil consumer. The Caixin China services purchasing managers index rose to 52.2 in March from 51.2 in February, Caixin Media Co. and research firm Markit said overnight. A reading above 50 indicates a month-to-month expansion, while a level below that points to a contraction. Oil prices have gained in recent months on speculation of a possible production freeze among major producing nations. However, the rally stalled last week after Saudi Arabia said Friday it would back out unless Iran was on board. Tehran plans to increase output until it reaches pre-sanction levels of around 4 million barrels a day. Kuwait, a heavyweight in the Organization of the Petroleum Exporting Countries, expressed confidence Tuesday that players will agree to limit their output when OPEC and non-OPEC producers, including Russia, meet in Doha, Qatar, on April 17. "Market watchers will be keeping their ears sharp until the suspense of a possible production freeze is over," said Barnabas Gan, an OCBC commodities analyst. Georgi Kantchev and Jenny W. Hsu contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Crude oil prices; Petroleum refineries; Petroleum industry; Inventory; Purchasing managers index
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778673803
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778673803?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Russian Poverty to Grow at Fastest Rate Since 1998-99, World Bank Says; World Bank expects Russia's oil-dependent economy to take longer to return to growth
Author: Ostroukh, Andrey; Mills, Laura
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Apr 2016: n/a.
Abstract:
MOSCOW--The number of Russians living below the poverty line will grow at its fastest pace in more than 17 years in 2016 as the oil-dependent economy contracts further, the World Bank said Wednesday.
Full text: MOSCOW--The number of Russians living below the poverty line will grow at its fastest pace in more than 17 years in 2016 as the oil-dependent economy contracts further, the World Bank said Wednesday. The World Bank revised its economic forecasts and now expects Russia to spend rainy-day savings as its return to economic growth will take longer than previously thought. Gross domestic product will shrink by 1.9% in 2016 if oil prices average $37 a barrel, according to the World Bank's new base scenario. Previously, the bank had expected Russia's economy to contract 0.7% based on the price of crude, Russia's key export, averaging nearly $50 a barrel. "Russia is most likely on a long road to recovery," said Birgit Hansl, the World Bank's lead economist for Russia. In March, Russia's central bank also downgraded growth expectations, elevating its worst-case scenario of a 1.5% drop in GDP to become its base scenario. The central bank said it believed oil prices will average $30 per barrel this year before gradually growing to $40 by 2018. While the World Bank's economic outlook is close to that from the Bank of Russia, it goes well beyond just economic figures such as GDP or inflation. Amid recession this year, the number of people living in poverty--defined as those having a monthly income below the official minimum living wage--will grow by 1.1 million people in 2016 to 14.2% of the overall population, the World Bank expects. This would mark the largest increase in poverty since the economic crisis of 1998-1999 and largely undoing years of improvement. The increase in poverty will be worsened by inflation and rising unemployment. Related * Number of Russians Living in Poverty Rises (March 21) * Bank of Russia Keeps Rates on Hold (March 18) * Low Oil Prices Force Russian Defense Cuts (March 10) Last year, 19.2 million people in Russia, or 13.4% of the population were living in poverty , compared with 16.1 million people, or 11.2% of the population, in 2014. That is the highest number of people living below the poverty line--those with incomes of less than 9,452 rubles ($138) a month in late 2015--since 2006, Russia's official data showed last month. The fall in living standards, however, appears to have done little to dent the popularity of Russian President Vladimir Putin. Independent pollster Levada-Center said in March that 65% of Russians would like to see Mr. Putin taking the president's seat for the fourth time in 2018, while the share of those who approve of Mr. Putin stood at 73%. The state coffers will also feel the brunt from low oil prices and Western sanctions that have effectively cut off Russian borrowers from global capital markets. To plug in holes in the budget, Russia would deplete its reserve fund, which stood at $50.6 billion in early April, and would need to somehow increase borrowing, the World Bank said. But even if Moscow spends its rainy-day fund by the end of the year, the budget deficit will be higher than the 3% of GDP, the ceiling ordered by Mr. Putin. Even in the best-case scenario, the deficit could rise to 3.9% of GDP in 2016, the World Bank said. Echoing Moscow's official forecasts, the World Bank also predicts that the overall economic pattern will somewhat improve next year. In 2017, the economy has the chance to return to growth and expand by 1.1% should oil prices recover and average $50 a barrel, according to the international financial institution. The bank praised what it described as Russia's flexible fiscal and monetary response to the oil shock, which led to the rapid depreciation of the ruble. But the bank said that while the ruble's weakness could boost the competitiveness of Russian producers, failure to invest in new industries would leave Russia largely dependent on commodities prices in the future. "Commodity prices in general will continue to dominate Russia's medium-term outlook," the World Bank said in its 35th report on the Russian economy. The ruble's current weakness boosts the competitiveness of Russian producers, but without rapid and sustained investment in new industries, Moscow could miss the opportunity provided by the price advantage, the bank said. Lately, investments in key industries such as manufacturing and agriculture declined. "Despite the depreciation of the ruble there is very limited success in non-commodities exports," said Ms. Hansl, presenting the report. In the longer term, the bank reiterated its usual message that Russia will require much-needed structural reforms. "Administrative barriers to doing business, high transportation and logistics costs, and the perception of an uneven playing field all discourage investment, particularly in the non-resource sectors," the report said. Write to Andrey Ostroukh at andrey.ostroukh@wsj.com Credit: By Andrey Ostroukh and Laura Mills
Subject: Energy economics; Budget deficits; Recessions; Crude oil prices; Economic growth; Gross Domestic Product--GDP; Economic forecasts
Location: Russia
Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 6, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778680844
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778680844?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Angola to Seek IMF Aid to Cope with Looming Financial Crisis; Oil-dependent Angola joins growing list of African countries needing help due to plunge in commodity prices
Author: Stevis, Matina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Apr 2016: n/a.
Abstract: None available.
Full text: Angola will turn to the International Monetary Fund for a bailout to help cope with the oil-price rout that has hit its economy hard , joining a growing list of commodity-dependent African economies seeking assistance from the institution to weather the adverse economic climate . The announcement represents an about-face for a government that had previously rejected the idea of seeking IMF assistance and ends months of speculation over how the West African country will cope with a looming financial crisis on the back of record-low oil prices. The move could also have consequences for Portugal, one of the eurozone's most fragile economies whose companies have invested heavily in Angola in recent years amid an economic crisis at home. Portugal itself requested a three-year bailout from the IMF and European Union peers exactly five years ago. Angola, a former Portuguese colony, is Portugal's fourth-largest export market. These companies are suffering from a fall in consumption in Angola and from dollar shortages. Portuguese banks are also being squeezed. Shares of Banco BPI SA, which owns 50.1% of Angola's largest private lender, closed down 6% Wednesday. The bank is trying to reduce its exposure to Angola under orders from the European Central Bank. Angola represented more than half of BPI's profit in 2015. Capital Economics estimates the size of Angola's bailout could be hefty as the country's financing requirements this year could amount to $8 billion, or 9% of gross domestic product. The aid "should reduce the risk of a messy balance-of-payments crisis. But the fiscal austerity that is likely to accompany any deal supports our view that growth will be painful," Capital Economics economist John Ashbourne said. Late last year, in the midst of severe dollar shortages, Angola opted to raise $1.5 billion to plug foreign currency into the economy through the issuance of a 10-year Eurobond. But at 9.5% yield, it paid a dear price for it. Oil shipments account for 95% of export earnings and more than half of government revenue, a reliance the government admitted is too high. The country has also benefited greatly from Chinese largess in Africa, now retrenching as China's economy slows. "The government of Angola is aware that the high reliance on the oil sector represents a vulnerability to the public finances and the economy more broadly," the finance ministry said in a statement. "The government will work with the IMF to design and implement policies and structural reforms aimed at improving macroeconomic and financial stability, including through fiscal discipline," it added. The statement said discussions over the program would begin next week at the IMF and World Bank spring meetings in Washington, D.C. "The IMF stands ready to help Angola address the economic challenges it is currently facing by supporting a comprehensive policy package to accelerate the diversification of the economy, while safeguarding macroeconomic and financial stability," Min Zhu, IMF deputy managing director, said in a statement. A key criticism of Angola's economy is that too much control is exerted by longtime President José Eduardo dos Santos, who has ruled since 1979. While the World Bank estimates that nearly half of the nation's 24 million people survive on less than $1.25 a day, Mr. dos Santos' daughter, Isabel dos Santos, is Africa's richest woman, a contrast that has ignited questions over the source of her wealth. In a recent interview with The Wall Street Journal, Ms. dos Santos rejected claims she has enriched herself through the use of state money. "I'm not financed by any state money or any public funds," she said. "I don't do that." The IMF's assistance may spell the end of opaqueness in government finances as the institution is known for diving deep into state accounts in the countries it assists. In its statement, the Angolan government acknowledged the issue. "The government is committed to improving transparency in the public finances and the banking sector" it said. "There is a strong belief within the government that the continued drive toward enhanced transparency can be accelerated by partnering with an institution like the IMF." Patricia Kowsmann contributed to this article. Write to Matina Stevis at matina.stevis@wsj.com Credit: By Matina Stevis
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 6, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778777287
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778777287?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Crude-Oil Supplies Surprisingly Decline; Refinery Runs Rise; Analysts had predicted supplies would rise by 3.3 million barrels
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Apr 2016: n/a.
Abstract:
Distillate stocks, which include heating oil and diesel fuel, rose by 1.8 million barrels to 163 million barrels, and are above the upper limit of the average range, the EIA said.
Full text: U.S. crude stockpiles unexpectedly fell in the week ended April 1, while refinery activity continued to rise, according to data released Wednesday by the U.S. Energy Information Administration. Crude-oil stockpiles decreased by 4.9 million barrels to 529.9 million barrels, which are still historically-high levels for this time of year, the EIA said. Analysts surveyed by The Wall Street Journal had predicted supplies would rise by 3.3 million barrels on the week. Oil stored at the Cushing, Okla., delivery point for U.S. stocks increased by 357,000 barrels to 66.3 million barrels, the EIA said in its weekly report. Gasoline stockpiles surprisingly rose by 1.4 million barrels to 244 million barrels. Analysts were expecting a 1.5-million-barrel decline. Distillate stocks, which include heating oil and diesel fuel, rose by 1.8 million barrels to 163 million barrels, and are above the upper limit of the average range, the EIA said. Analysts had expected a 900,000-barrel weekly decrease. Refining capacity utilization jumped by one full percentage point from the previous week, to 91.4%. Analysts were expecting a 0.1-percentage-point drop from the previous week. Write to Dan Molinski at Dan.Molinski@wsj.com Credit: By Dan Molinski
Subject: Petroleum industry
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778788393
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778788393?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Low Oil Weighs on Royal Bank of Canada's Energy-Loan Review; RBC says oil-price rout has reduced credit availability for some energy companies
Author: Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Apr 2016: n/a.
Abstract:
[...]there have been concerns about the impact of low oil prices on our business.
Full text: Royal Bank of Canada has reached the midpoint in its latest review of energy loans, a process that has so far resulted in up to a 20% reduction in credit for some oil and gas companies, the lender's chief risk officer said Wednesday. The disclosure of the bank's so-called borrowing base redetermination comes as oil prices, while having regained some strength recently, remain well below previous highs. "We are seeing a lower [oil] price. That is reducing the some of the [credit] availability for the borrowing bases with our clients," said RBC Chief Risk Officer Mark Hughes on a conference call following the bank's annual meeting in Montreal. With the oil bust now in its second year, lower prices are weighing on the borrowing base redetermination process -- a biannual practice that occurs in the spring and fall when banks review their energy loans. "I would say we are about half way through. We have seen probably 15% to 20% reduction in borrowing bases on the ones we've done so far," said Mr. Hughes. The oil-price rout has reduced credit availability for some energy companies because banks often use a firm's reserves as collateral for lending . Lower oil prices erode the value of that underlying surety. RBC declined to provide its oil-price assumption for its spring review, but Mr. Hughes noted the price has come down since the redetermination process in the fall. A bank spokeswoman said the redetermination is based on the underlying WTI futures curve. In general, RBC expects oil prices to recover to around $40 a barrel for 2016 amid "a slow rebalancing of supply and demand," and then average about $50 a barrel next year, said Chief Executive David McKay. "Having said that, we continue to stress-test our portfolio," he said. RBC, Canada's largest bank by assets, has 8.4 billion Canadian dollars ($6.41 billion) in energy loans. About 80% of that exposure is considered "noninvestment grade." Even so, Mr. McKay assured investors that RBC's energy exposure remains manageable. "Naturally, there have been concerns about the impact of low oil prices on our business. Oil and gas represents about 1.6% of our total loan book and our provision for credit loss remains in line with historic norms," Mr. McKay said at the annual meeting. "We also believe the significant gains that oil markets have made since January will hold, given that the U.S. economy continues to grow, albeit slowly," he added. Canada's commodity sector accounts for about 20% of the country's nominal gross domestic product. On Tuesday, Bank of Montreal CEO Bill Downe told his bank's shareholders in Toronto that Canada hasn't lost its resource wealth. "Our institutional memory allows us to take in the full course of the cycle. And what we know with confidence is that Canada's resource wealth has not gone away," Mr. Downe said. "A market price correction does not mean that an enviable national asset has suddenly become a liability." Write to Rita Trichur at rita.trichur@wsj.com Credit: By Rita Trichur
Subject: Risk management; Prices; Loans; Energy industry; Natural gas utilities
Location: Canada Montreal Quebec Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778835095
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fed Looks at Relationship Between Oil Prices and Inflation Compensation
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Apr 2016: n/a.
Abstract: None available.
Full text: New research from the Federal Reserve suggests that only demand-induced oil-price declines --those responding to economic activity, rather than oil-specific developments--cause large declines in inflation compensation. Although lower oil prices should result in lower inflation over the next year, it shouldn't reduce inflation five to 10 years in the future, Fed economists Alejandro Perez-Segura and Robert Vigfusson wrote in a posting on the Fed's website. "Our main finding is that demand-induced oil price declines can explain most of the move in inflation compensation. As a consequence, economists would do well to pay less attention to oil prices and more attention to macroeconomic factors in explaining the decline in inflation compensation."
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 6, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778844808
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778844808?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil's Rally Is Sour for Royalty Trusts; One quirky way individuals have invested in oil has backfired in recent weeks, even as crude prices have soared
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Apr 2016: n/a.
Abstract:
The Yorkville Royalty Trust Universe Total Return Index, which tracks oil, natural-gas and iron-ore royalty trusts, was down 8.1% in March, even as oil prices rose 14% that month. The Prudhoe Bay trust's shares fell 23% on March 9 after CAS Investment Partners LLC, a New York investment firm with $92 million in assets under management, highlighted in a news release a prior corporate filing that said Prudhoe Bay expected quarterly payments to end after 2020 instead of 2028.
Full text: One quirky way individuals have invested in oil has backfired in recent weeks, even as crude prices have soared. The investments, known as royalty trusts, often entice investors with yields of 10% or more. But many of them fell sharply in March. The trusts, typically established by commodity producers, are designed to pay cash to shareholders every quarter or year based on the producers' oil, natural-gas or mining output. Royalty trusts give shareholders a payout based on the activity of specific fields or regions. But as investors were reminded this year, those payments can disappear if prices are too low to make production profitable. "It's not just lower prices, it's potentially lower volumes" that could limit royalty-trust payouts, said Dan Pickering, chief investment officer of TPH Asset Management in Houston, which oversees $1.7 billion. "I think that double whammy has scared the buy-and-hold crowd." The Yorkville Royalty Trust Universe Total Return Index, which tracks oil, natural-gas and iron-ore royalty trusts, was down 8.1% in March, even as oil prices rose 14% that month. The percentage-point gap between the two was the biggest since 2009. The royalty trusts included in the index have a combined market value of about $2.2 billion. They are traded like stocks. Some royalty trusts' shares have plunged lately because even after oil rallied more than 40% from its February trough, prices never got much above $40. That level still was too low to make production profitable for many companies. In turn, many trust holders now expect minimal payments if any at all. BP Prudhoe Bay Royalty Trust, which pays out for production on part of Alaska's biggest oil field operated by BP Alaska, is a case study in what can go wrong: The trust disclosed on Feb. 29 that it expects to pay no royalties after 2020 based on recent oil prices. A year ago, the trust said it expected to pay through 2028. Its shares fell 46% in March and are down another 3.5% this month. Prudhoe Bay's production costs are around $33 a barrel and are set to rise in the coming years, according to trust filings. U.S. oil prices averaged $33.63 in the first quarter of 2016. BP Alaska announced in March that it was reducing its drilling rigs in Prudhoe Bay from five to two. The decision was made "in response to the low oil-price environment," a spokeswoman said. "I think investors are now starting to realize that the trust probably needs $70 or $80 oil to continue on as long as maybe they had hoped," said Gabe Daoud Jr., an analyst at J.P. Morgan Chase & Co. Mr. Pickering's TPH held shares of the Prudhoe Bay trust as of Dec. 31, according to a filing. Mr. Pickering declined to comment on its current holdings. The Prudhoe Bay trust's shares fell 23% on March 9 after CAS Investment Partners LLC, a New York investment firm with $92 million in assets under management, highlighted in a news release a prior corporate filing that said Prudhoe Bay expected quarterly payments to end after 2020 instead of 2028. The trust's shares fell another 23% the following day. Clifford Sosin, founder of CAS who in the release disclosed his wager that the trust's share price would fall, said he got phone calls after the release came out from investors who owned shares in the trust. "It was abundantly clear that these were people who didn't understand what was going to happen," he said. "It made me feel sad." U.S. Global Investors Inc., which manages $600 million, sold its shares of the trust more than a month ago, said chief investment officer Frank Holmes. Mr. Holmes said he sees the trust as "an opportunistic trade," not a long-term investment, because "you're subject to the underlying volatility of the commodity." Some trusts are pricing in an expectation that oil prices will rise from current levels. The biggest royalty trust by market capitalization, the Sabine Royalty Trust, said in its most recent annual filing that its future cash available for distribution is $140 million. The trust's market value is $437 million. That means investors are willing to pay more for shares in the trust than the trust expects to pay out in the future. To be sure, some royalty trusts rose in March and the performance of the Prudhoe Bay trust helped drag down the broader index. Royalty trusts have existed since at least the 1950s but became more popular in the 1970s and 80s. Unlike master-limited partnerships, royalty trusts typically don't acquire new assets after they are formed. Even in times of rising commodity prices, shareholders who buy into these trusts are generally buying into dwindling assets. Oil and natural-gas wells naturally deplete as they age. Royalty trusts are largely owned by retail investors, analysts say. Credit: By Nicole Friedman
Subject: Petroleum industry; Trusts; Financial executives; Crude oil prices
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778847295
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778847295?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Rise on Unexpected Decline in U.S. Crude Inventories; June Brent crude rose $0.30 to $40.14 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Apr 2016: n/a.
Abstract:
Analysts say as supply continues to outpace demand, prices are unlikely to stage a sustained rally without a drastic tightening in supply. Since the beginning of the year, the industry has been waiting for some price supportive action from the major oil producers, who have tossed around the possibility of a coordinated production freeze.
Full text: Crude-oil prices continued to rise in Asian trade Thursday, driven by an unexpected decline in U.S. crude inventories. U.S. crude-oil supplies fell by 4.9 million barrels in the week ended April 1, the Energy Information Administration said Wednesday. The prior week, crude stockpiles stood at the highest level in more than 80 years. Analysts surveyed by The Wall Street Journal had expected stockplies to rise by 3.3 million barrels. The inventory drawdown was due to a decline in imports and an increase in refinery activity, EIA said. Refineries ran at 91.4% of capacity last week, up from 90.4% in the prior week. "In theory, the drop in imports could be the result of delayed arrivals, an effort by refiners to reduce excess stocks, or a lack of availability [of crude oil]," said Tim Evans, a Citi Futures analyst. The decline doesn't necessarily indicate that the global market is rebalancing, Mr. Evans said, adding that would be true only if a lack of available barrels was the cause. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $38.15 a barrel, up $0.40. June Brent crude on London's ICE Futures exchange rose $0.30 to $40.14 a barrel. Despite the prolonged collapse in prices, crude suppliers around the world have been pumping at top speed to defend their market share. Analysts say as supply continues to outpace demand, prices are unlikely to stage a sustained rally without a drastic tightening in supply. Since the beginning of the year, the industry has been waiting for some price supportive action from the major oil producers, who have tossed around the possibility of a coordinated production freeze. Several key players, including Saudi Arabia and Russia, are expected to meet on April 17 in Doha to discuss the plan. "Only a feeble mind sees a freeze in production as good news! It is the worst news as it guarantees over production and rising inventories. But, the market was so desperate for some good news it mistakenly took the freeze as good news!" said Dr. Fereidun Fesharaki, the chairman of consulting group FGE. Dr. Fesharaki said he doesn't expect the Doha meeting to result in anything significant. Earlier this week, oil prices fell after Saudi Arabia said the kingdom will freeze its oil production only if Iran agrees to curb its output. Tehran, however, has vowed to keep ramping up production until output rises to pre-sanction levels. "Investor sentiment towards oil is likely to remain cautious until the 17 April meeting when key oil producers again try and reach an agreement on controlling supply," said ANZ Research. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 145 points to $1.4092 a gallon, while May diesel traded at $1.1505, 102 points higher. ICE gasoil for April changed hands at $337.25 a metric ton, up $8.25 from Wednesday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Petroleum industry; Inventory; Futures; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778868514
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778868514?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil's Rally Sour for Royalty Trusts
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Apr 2016: C.1.
Abstract:
The Yorkville Royalty Trust Universe Total Return Index, which tracks oil, natural-gas and iron-ore royalty trusts, was down 8.1% in March, even as oil prices rose 14% that month.
Full text: One quirky way individuals have invested in oil has backfired in recent weeks, even as crude prices have soared. The investments, known as royalty trusts, often entice investors with yields of 10% or more. But many of them fell sharply in March. The trusts, typically established by commodity producers, are designed to pay cash to shareholders every quarter or year based on the producers' oil, natural-gas or mining output. Royalty trusts give shareholders a payout based on the activity of specific fields or regions. But as investors were reminded this year, those payments can disappear if prices are too low to make production profitable. "It's not just lower prices, it's potentially lower volumes" that could limit royalty-trust payouts, said Dan Pickering, chief investment officer of TPH Asset Management in Houston, which oversees $1.7 billion. "I think that double whammy has scared the buy-and-hold crowd." The Yorkville Royalty Trust Universe Total Return Index, which tracks oil, natural-gas and iron-ore royalty trusts, was down 8.1% in March, even as oil prices rose 14% that month. The percentage-point gap between the two was the biggest since 2009. The royalty trusts included in the index have a combined market value of about $2.2 billion. They are traded like stocks. Some royalty trusts' shares have plunged lately because even after oil rallied more than 40% from its February trough, prices never got much above $40. That level still was too low to make production profitable for many companies. In turn, many trust holders now expect minimal payments if any at all. BP Prudhoe Bay Royalty Trust, which pays out for production on part of Alaska's biggest oil field operated by BP Alaska, is a case study in what can go wrong: The trust disclosed on Feb. 29 that it expects to pay no royalties after 2020 based on recent oil prices. A year ago, the trust said it expected to pay through 2028. Its shares fell 46% in March and are down another 3.5% this month. Prudhoe Bay's production costs are around $33 a barrel and are set to rise in the coming years, according to trust filings. U.S. oil prices averaged $33.63 in the first quarter of 2016. BP Alaska announced in March that it was reducing its drilling rigs in Prudhoe Bay from five to two. The decision was made "in response to the low oil-price environment," a spokeswoman said. "I think investors are now starting to realize that the trust probably needs $70 or $80 oil to continue on as long as maybe they had hoped," said Gabe Daoud Jr., an analyst at J.P. Morgan Chase & Co. Mr. Pickering's TPH held shares of the Prudhoe Bay trust as of Dec. 31, according to a filing. Mr. Pickering declined to comment on its current holdings. The Prudhoe Bay trust's shares fell 23% on March 9 after CAS Investment Partners LLC, a New York investment firm with $92 million in assets under management, highlighted in a news release a prior corporate filing that said Prudhoe Bay expected quarterly payments to end after 2020 instead of 2028. The trust's shares fell another 23% the following day. Clifford Sosin, founder of CAS who in the release disclosed his wager that the trust's share price would fall, said he got phone calls after the release came out from investors who owned shares in the trust. "It was abundantly clear that these were people who didn't understand what was going to happen," he said. "It made me feel sad." U.S. Global Investors Inc., which manages $600 million, sold its shares of the trust more than a month ago, said chief investment officer Frank Holmes. Mr. Holmes said he sees the trust as "an opportunistic trade," not a long-term investment, because "you're subject to the underlying volatility of the commodity." Some trusts are pricing in an expectation that oil prices will rise from current levels. The biggest royalty trust by market capitalization, the Sabine Royalty Trust, said in its most recent annual filing that its future cash available for distribution is $140 million. The trust's market value is $437 million. That means investors are willing to pay more for shares in the trust than the trust expects to pay out in the future. To be sure, some royalty trusts rose in March and the performance of the Prudhoe Bay trust helped drag down the broader index. Unlike master-limited partnerships, royalty trusts typically don't acquire new assets after they are formed. Even in times of rising commodity prices, shareholders who buy into these trusts are generally buying into dwindling assets. Oil and natural-gas wells naturally deplete as they age. Royalty trusts are largely owned by retail investors, analysts say.
Credit: By Nicole Friedman
Subject: Royalties; Petroleum industry; Crude oil prices
Company / organization: Name: BP Exploration Alaska Inc; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 7, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778926160
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778926160?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Angola Seeks IMF Aid Amid Oil-Price Rout
Author: Stevis, Matina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Apr 2016: A.11.
Abstract:
Angola will turn to the International Monetary Fund for a bailout to help cope with the oil-price rout that has hit its economy hard, joining a growing list of commodity-dependent African economies seeking assistance from the institution to weather the adverse economic climate.
Full text: Angola will turn to the International Monetary Fund for a bailout to help cope with the oil-price rout that has hit its economy hard, joining a growing list of commodity-dependent African economies seeking assistance from the institution to weather the adverse economic climate. The announcement represents an about-face for a government that had previously rejected the idea of seeking IMF assistance and ends months of speculation over how the West African country will cope with a looming financial crisis on the back of low oil prices. The move could also have consequences for Portugal, one of the eurozone's most fragile economies, whose companies have invested heavily in Angola in recent years amid an economic crisis at home. Portugal requested a three-year bailout from the IMF and European Union peers five years ago. Angola, a former Portuguese colony, is Portugal's fourth-largest export market. These companies are suffering from a fall in consumption in Angola and from dollar shortages. Portuguese banks are also being squeezed. Angola's bailout could be hefty as the country's financing requirements this year could amount to $8 billion, or 9% of gross domestic product, according to Capital Economics. Credit: By Matina Stevis
Subject: Bailouts
Location: Angola
Company / organization: Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.11
Publication year: 2016
Publication date: Apr 7, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778927290
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778927290?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Coconuts Go Upscale, Boosting Price of Conventional Coconut Oil; Coconut water and sugar make a splash, reducing supply for use as ingredients in less sexy products like dish detergent
Author: Craymer, Lucy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Apr 2016: n/a.
Abstract: None available.
Full text: Coconut oil prices have soared nearly 20% in a month, largely because of the growing popularity of specialty products such as coconut water. In supermarkets, coconuts are being sold with pull tabs to be drunk like beer. Coconut sugar is being touted as healthier for diabetics. And U.S. actress Gwyneth Paltrow is among celebrity coconut fans, once revealing she swishes around virgin coconut oil for oral health and whitening her teeth. Such trendy products come from young green coconuts, fresh coconut and the trees' flowers. That leaves less dried coconut--copra--to be made into the conventional oil that is used in everything from dish detergent to medicine. The result has been a jump in prices since February, to an average in March of $1,448 a metric ton, according to World Bank data released late Wednesday. That is more than 50% higher than the average price in 2013. Meanwhile, the interest in specialty products is only expected to grow. Global consumption of coconut water jumped 13% from 2014 to 2015, following a 24% increase the previous year, according to data from beverage research firm Canadean. The trend toward specialty products is being felt throughout the coconut industry, suggesting that prices for conventional oil aren't likely to drop significantly in the near future, analysts say. Farmers in the Philippines, the world's largest producer of coconut oil, for example, are increasingly being asked to harvest younger coconuts, as middlemen chase after the higher prices they net over fully mature ones. In the Philippines, coconut-water exports more than doubled to 66.3 million liters and virgin coconut oil was up 61% to 34,227 metric tons in the 11 months to November 2015, according to the latest available data from the United Coconut Associations of the Philippines. In the same period, copra and coconut-oil exports fell slightly, and the industry group predicts they will drop 6.9% to 2.1 million metric tons in 2016 from last year. "Increase in cost of production narrowed down margins, and the industry players naturally moved towards high-margin [coconut] products," said Maduka Perera, owner of Ceylon Tropics, a coconut business in Sri Lanka. Meanwhile, supplies will continue to feel pressure. The Philippines is still reeling from the 2013 Supertyphoon Haiyan, which damaged or destroyed 44 million coconut palms--about 15% of its trees. It will take at least until next year for new trees to bear fruit. And Indonesia, the world's top harvester of coconuts, hasn't undertaken a program to replace old coconut trees that because of age are seeing less fruit, meaning plantations are producing less nuts. The government is instead focused on expanding rice, corn and soybean production. Manufacturers aren't likely to stampede to coconut-oil substitutes, analysts say. That is because substituting with, for example, petroleum-based fatty alcohols can disrupt product formulas and threaten a product's branding as being environmentally friendly. Palm-kernel oil, which is produced from the seed of the oil palm, may get a boost instead. James Fry, chairman at agribusiness analyst firm LMC International Ltd., sees some relief coming in the fourth quarter of this year, as the worst of the El Niño phenomenon since 1997-1998 has passed. The current El Niño has reduced rainfall in Southeast and Southern Asia, putting stress on coconut palms and reducing the amount of fruit on the tree. An El Niño occurs when winds in the equatorial Pacific slow down or reverse direction. That causes waters to warm over a vast area, which in turn can upend weather around the world. PT Cargill Indonesia, which crushes copra into oil, described copra supplies as the worst he has seen in 16 or 17 years, largely because of the high demand for whole coconuts. Cargill is "struggling big time" to get hold of copra, said Satria Wardaja, Cargill's communications manager. Write to Lucy Craymer at Lucy.Craymer@wsj.com Credit: By Lucy Craymer
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778951754
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778951754?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Slip as Investors Dismiss Inventories Decline; Growing doubts major oil producers will agree to curb output keep prices in check
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Apr 2016: n/a.
Abstract:
Front-month Brent crude futures for June delivery briefly traded above July futures, a market structure called "backwardation" that is seen by some as a sign of tightness in the market.
Full text: Oil prices fell Thursday as some investors dismissed an unexpected decline in U.S. crude inventories and harbored growing doubts that major oil producers will agree to curb their output. Light, sweet crude for May delivery settled down 49 cents, or 1.3%, at $37.26 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 41 cents, or 1%, to $39.43 a barrel on ICE Futures Europe. The market had been getting support from an unexpected decrease in U.S. crude-oil supplies, down by 4.9 million barrels last week, the Energy Information Administration said Wednesday. But many are now pointing to data deeper in the EIA report that suggest that decrease may be an anomaly if not irrelevant altogether. Gasoline stocks rose by 1.4 million barrels following six consecutive weeks of declines while inventories at the key crude delivery hub of Cushing, Oklahoma, rose 357,000 barrels last week, the EIA said. Despite the draw down on crude, total stocks of oil and all petroleum products grew again from already historic highs, up 1.1 million barrels to 1.357 billion barrels. Exports also dropped, a bad sign for demand. And much of last week's fall in crude stockpiles came from declining imports, which is likely to be a one-week anomaly because of bad weather halting deliveries around Houston or just because of the routine week-to-week changes, analysts said. "I don't think the (numbers) from yesterday were nearly as bullish as the headlines," said Kyle Cooper, managing director at Criterion Research LLC, a Houston consulting firm. "I don't think global supply dropped all that much." Thursday's decline also marks another pullback from the late-winter rally tied to hopes that major producers will agree to limit their output. Several key players, including Saudi Arabia and Russia, are expected to meet on April 17 in Doha, Qatar, to discuss a plan to alleviate the global oversupply and boost prices However, earlier this week, oil prices fell after Saudi Arabia said the kingdom will freeze its oil production only if Iran agrees to curb its output. Tehran, however, has vowed to keep ramping up production until output rises to pre-sanction levels. There are also growing doubts about Libya's attendance of the talks. "Without the participation of the two countries with the most capacity headroom, a production 'freeze' is a misnomer at best," said Michael Hsueh, analyst at Deutsche Bank. "Such an agreement would do little to change the supply outlook." The market did get a boost at the end of the day, rallying sharply in the last few minutes of trading to pare losses by half. Front-month Brent crude futures for June delivery briefly traded above July futures, a market structure called "backwardation" that is seen by some as a sign of tightness in the market. The spread between near-term and far-term futures prices has been narrowing in recent weeks, so much that many ways of storing oil have become unprofitable, said John Saucer, vice president of research and analysis at Mobius Risk Group in Houston. If the trend continues, it foreshadows a sustained rally that many expect for later this year or early next year as oversupply wanes and demand increases, said Todd Gross, chief investment officer at QERI LLC. "The market is tighter than most people think," Mr. Saucer said. Gasoline futures settled down 1.35 cents, or 1%, at $1.3812 a gallon. Diesel futures lost 1.46 cents, or 1.3%, to $1.1257 a gallon. Nicole Friedman contributed to this article. Write to Timothy Puko at tim.puko@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Timothy Puko and Georgi Kantchev
Subject: Petroleum industry; Inventory; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Deutsche Bank AG; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1778961418
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1778961418?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Vietnam Tells China to Remove Oil Rig From Disputed Waters; Previous placement of rig HYSY 981 sparked riots in Vietnam
Author: Vu, Trong Khanh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Apr 2016: n/a.
Abstract:
The country's legislature on Thursday formally elected Nguyen Xuan Phuc as prime minister, replacing Nguyen Tan Dung, an outspoken and popular critic of China's military and commercial expansion in the South China Sea in recent years.
Full text: HANOI--Vietnam's government on Thursday said it had told China to pull an oil rig from waters between the two countries that haven't been demarcated and urged Beijing not to drill for oil or gas in the area. China National Offshore Oil Corp. towed the same rig, known as HYSY 981, into a disputed area of the South China Sea in May 2014, triggering an uproar in Vietnam. Anti-Chinese riots broke out in several parts of the country while Chinese and Vietnamese coast-guard and fishing vessels stood off against each other at sea. In a statement on Vietnam's government website, foreign ministry spokesman Le Hai Binh said China last pulled the rig to its present location in the mouth of the Gulf of Tonkin on Sunday. It was towed to a nearby location in January. "Vietnam strongly protests this and demands that China drop its drilling plans and move it out of the area," Mr. Binh said. He said Vietnam had lodged an official protest with China's embassy in Hanoi. Officials in China couldn't immediately be reached for comment. This latest spat comes as relations between the two countries deteriorate again. Vietnamese authorities last week seized a Chinese ship they said had illegally entered Vietnamese waters carrying 100,000 liters of diesel fuel. State media in Hanoi reported the captain of the three-man vessel as saying the boat was supplying oil to Chinese fishing boats in the area. It also comes as Vietnam completes its new leadership lineup . The country's legislature on Thursday formally elected Nguyen Xuan Phuc as prime minister, replacing Nguyen Tan Dung, an outspoken and popular critic of China's military and commercial expansion in the South China Sea in recent years. Mr. Phuc joins State President Tran Dai Quang and Communist Party Secretary General Nguyen Phu Trong, who has grown more critical of China's role in the region, as the third of the country's top leaders. Write to Vu Trong Khanh at Trong-Khanh.Vu@dowjones.com Credit: By Vu Trong Khanh
Location: Beijing China China Vietnam Gulf of Tonkin South China Sea
People: Trong, Nguyen Phu Dung, Nguyen Tan
Company / organization: Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York , N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 7, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779187496
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyri ght owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Wintershall to Delay Norway, U.K. Oil Projects
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Apr 2016: n/a.
Abstract:
The announcement is another blow to Norway's oil ambitions, after Royal Dutch Shell said earlier this week it would withdraw its application for new drilling licenses in the country's 23rd licensing round, amid weak oil prices and tougher priorities after its merger in February with BG Group.
Full text: OSLO--Oil and gas producer Wintershall AG, a subsidiary of Germany's BASF SE (BAS.XE), said Thursday it would delay the development of the Skarfjell oil field off Norway and a project to boost output at the U.K. Wingate field, in a bid to optimize the projects amid weak oil prices. "We have to weigh up the investments very carefully," said Wintershall Chief Executive Mario Mehren. The Skarfjell discovery in the North Sea, made in 2012, is estimated to hold more than 100 million barrels of oil equivalent. A development plan is expected in 2017, with production starting by 2022, according to the Norwegian Petroleum Directorate. Wintershall didn't provide a new timeline for the project. The announcement is another blow to Norway's oil ambitions, after Royal Dutch Shell said earlier this week it would withdraw its application for new drilling licenses in the country's 23rd licensing round, amid weak oil prices and tougher priorities after its merger in February with BG Group. A string of projects have been delayed recently by oil companies operating in Norway and the U.K., including the Johan Castberg field in Norway's Barents Sea, the Aasta Hansteen gas field in the Norwegian Sea, and the Mariner heavy oil field off the U.K., all operated by Statoil ASA (STO). Wintershall said it plans to invest around 4.8 billion euros ($5.47 billion) in the next five years to expand its global oil and gas activities, and said EUR1 billion of that amount would be spent in 2016, down 29% from the previous year. The German oil and gas producer said it would cut costs by up to EUR200 million this year and drill fewer exploration wells to cope with a roughly 60% drop in oil prices over the last two years. Brent traded at $39 a barrel on Thursday. The company said its shale oil and gas projects in Argentina would also be developed more slowly than previously planned. Wintershall increased its production 13% to 419,000 barrels a day in 2015, and said it aimed to increase it to around 521,000 barrels a day in 2018. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Petroleum industry; Oil fields
Location: Germany United Kingdom--UK Norway North Sea
Company / organization: Name: BASF SE; NAICS: 551112, 325320, 325412, 325620, 325998; Name: Statoil ASA; NAICS: 324110, 211111; Name: BG Group PLC; NAICS: 486210, 211111, 221210; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Wintershall AG; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 7, 2016
Section: Business
Publisher: Dow Jones & Co mpany Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779187836
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779187836?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Chevron CEO Watson's Compensation Drops 15% in 2015; Oil giant's 2015 profit marked the lowest annual total in 13 years
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Apr 2016: n/a.
Abstract:
Related * Chevron Once Again Cuts Spending Plans * Chevron Posts Loss, Readies More Layoffs * Oil Firms Slow Exploration to Weather Low-Price Era * U.S. Shale Producers Face Reality, Cut Output Mr. Watson, who has been chief executive since 2010, last year collected $1.86 million in base salary, up 1.6% from a year ago; $14.68 million in stock and options, up 9.5% from the previous year; and $2.45 million in bonuses, which fell 21%.
Full text: Chevron Corp. said Thursday that Chief Executive John Watson received $22 million in total compensation in 2015, a decline of 15% from the previous year. Much of the difference came from a 62% drop in Mr. Watson's pension value and nonqualified deferred compensation earnings, to $2.81 million from $7.36 million in 2014, according to a regulatory filing. Related * Chevron Once Again Cuts Spending Plans * Chevron Posts Loss, Readies More Layoffs * Oil Firms Slow Exploration to Weather Low-Price Era * U.S. Shale Producers Face Reality, Cut Output Mr. Watson, who has been chief executive since 2010, last year collected $1.86 million in base salary, up 1.6% from a year ago; $14.68 million in stock and options, up 9.5% from the previous year; and $2.45 million in bonuses, which fell 21%. Chevron's full-year 2015 profit of $4.6 billion marked the lowest annual total in 13 years in a glaring sign of the challenges facing the energy sector , as oil and gas prices languish at their lowest levels in more than a decade. Chevron late last year said it would reduce its employee count by about 10%. To achieve that cut, 3,200 workers were let go in 2015 and another 4,000 layoffs are slated for this year. Write to Ezequiel Minaya at ezequiel.minaya@wsj.com Credit: By Ezequiel Minaya
Subject: Deferred compensation; Petroleum industry; Layoffs; Wages & salaries; Energy industry
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 7, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779222171
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779222171?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Stocks Edge Higher as Rising Oil Prices Encourage Investors; Global stocks mostly inched higher Friday while haven assets cooled, as rising oil prices helped rekindle investors' appetite for risk.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2016: n/a.
Abstract:
[...]helping restore investors' confidence, Federal Reserve Chairwoman Janet Yellen and three former Fed leaders on Thursday sought to dispel worries about the U.S. economy while emphasizing a gradual path for U.S. interest rates.
Full text: Global stocks mostly inched higher Friday while haven assets cooled, as rising oil prices helped rekindle investors' appetite for risk. The Stoxx Europe 600 gained 0.8% in early trade, led by shares of banks and oil and gas companies. Brent crude oil was up 1.8% at $40.12 a barrel, while copper futures in London rose 0.7% to $4,667 a ton. Also helping restore investors' confidence, Federal Reserve Chairwoman Janet Yellen and three former Fed leaders on Thursday sought to dispel worries about the U.S. economy while emphasizing a gradual path for U.S. interest rates. Futures pointed to a modest opening gain for the S&P 500, after Wall Street saw its steepest decline since February in the previous session. Shares in Asia mostly followed U.S. stocks lower Friday, but Japan's Nikkei Stock Average gained as 0.5% as the yen declined after hitting its strongest level against the dollar in a year and a half. The dollar was last up 0.4% against the yen at Yen108.7490 after Japan's finance minister Taro Aso said he may act against what he called "one-sided" yen rises. Other haven assets retreated. Gold fell 0.3% to $1,234 an ounce, while the yields on 10-year U.S. and German government bonds inched higher. Yields rise as prices fall. Write to Riva Gold at riva.gold@wsj.com
Subject: International finance; Petroleum industry; Investments; Natural gas utilities
Location: Japan Asia United States--US
People: Aso, Taro
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779286005
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779286005?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Rebound; Market Remains Cautious Ahead of OPEC Meeting; June Brent crude rose $0.54 to $39.97 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2016: n/a.
Abstract:
Crude-oil prices staged a rebound in early Asia trade Friday after an overnight retreat, but the market will likely remain cautious ahead of the Doha meeting later this month when key producers are set to discuss a production freeze to salvage prices.
Full text: Crude-oil prices staged a rebound in early Asia trade Friday after an overnight retreat, but the market will likely remain cautious ahead of the Doha meeting later this month when key producers are set to discuss a production freeze to salvage prices. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $37.94 a barrel at 0247 GMT, up $0.68 in the Globex electronic session. June Brent crude on London's ICE Futures exchange rose $0.54 to $39.97 a barrel. Prices slid overnight after investors looked deeper into recent U.S. energy department data which showed a 1.4 million-barrel growth in gasoline stocks last week, snapping six consecutive weeks of declines. The data showed despite the draw-down on crude, total stocks of oil and all petroleum products grew again from already historic highs, up 1.1 million barrels to 1.357 billion barrels. "The rebound in Asia is mainly due to short-covering. Prices are likely to fluctuate range bound until the April 17 meeting," said an oil analyst at an Australia-based bank. Oversupply has been the main culprit of persistently low prices, which are around 30% lower than at the same time last year. The proposed production freeze provided some temporary relief but the market is still on edge over worries the freeze may not materialize because two major heavyweights--Iran and Saudi Arabia--remain at odds over whether to participate in the accord. Iran has refused to curtail production and vowed to keep pumping until production is on par with the levels seen before sanctions. Iran's oil minister last week said the country's oil exports jumped again in March, rising by 250,000 barrels a day, to surpass 2 million barrels a day. Saudi Arabia, one of the original initiators of the pact, has signalled it would back out of the plan unless Iran is on board. "The market is in suspense until the meeting. Until then, unless there are sudden changes in rhetoric by the major players, the market will stay in a wait-and-see mode," said Barnabas Gan, a commodity analyst at OCBC. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 222 points to $1.4034 a gallon, while May diesel traded at $1.1432, 175 points higher. ICE gasoil for April changed hands at $334.50 a metric ton, up $11.00 from Thursday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Petroleum industry; Price increases
Location: Iran Asia United States--US Saudi Arabia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779289131
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779289131?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks End Down On-Week, Despite Late Lift From Oil; Stocks around the globe declined this week as growth worries resurfaced
Author: Driebusch, Corrie; Gold, Riva
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2016: n/a.
Abstract: None available.
Full text: Rising oil prices buoyed stocks Friday, but major U.S. indexes still posted weekly losses in a rocky stretch. Stocks around the globe declined this past week, as worries resurfaced about the ability of central bankers to lift a sluggish global economy after years of easy monetary policy. It was the second week of declines in three weeks for the major U.S. stock indexes. The choppiness in the markets follows a rally that started in mid-February, when stocks posted gains of at least 1% every week for more than a month. Today's Highlights * Dow Beats Peers as Risk-Taking Fades * Millennial Employees Confound Big Banks * Intelligent Investor: You--Not the Government--Are Responsible for Your Retirement Savings "In many ways, the market came roaring back because the recession story was not validated," said Andrew Slimmon, portfolio manager with Morgan Stanley Investment Management. "Having said that, now we're at a juncture." He said that in order for stocks to climb, there needs to be signs of solid earnings growth, and better-than-expected guidance from companies as they report first-quarter results could provide this boost. Investors will get a glimpse in the coming week as several notable companies, including major financial firms, are set to release first-quarter results. As of March 31, first-quarter earnings for S&P 500 companies are forecast to contract 8.5% from the year-earlier period, which would mark a fourth consecutive quarterly decline, according to FactSet. Analysts expect quarterly earnings to rise in the second half of the year. The Dow Jones Industrial Average added 35 points, or 0.2%, Friday to 17576.96 after earlier rising as much as 153 points. The S&P 500 rose 5.69, or 0.3%, to 2047.60, giving it a gain of 0.2% so far this year. The Dow industrials and the S&P 500 both posted weekly losses of 1.2%. The Nasdaq fell 1.3% for the week and is still down 3.1% in 2016. Big gains in the price of oil spurred the stock market's early gains on Friday, as U.S.-traded crude oil jumped 6.6% to $39.72 a barrel, bringing its weekly gain to 8%. Energy companies in the S&P 500 advanced 2% on Friday, the best-performing sector in the index. "As oil has come off its lows, the market has been trading on that," said Stephen Carl, head equity trader at Williams Capital Group. One of the biggest decliners was the consumer-discretionary sector, which was weighed down by retail apparel companies. After the market closed Thursday, Gap reported that sinking sales would pressure profit margins in its current quarter. Gap's stock slid $3.83, or 14%, to $23.85 Friday. On Thursday, stocks in the U.S. pulled back, notching the Dow's biggest drop since late February. Late Thursday, Federal Reserve Chairwoman Janet Yellen and three former Fed leaders sought to dispel worries about the U.S. economy while emphasizing a gradual path for interest rates. "I don't think December was a mistake," Ms. Yellen said, referring to the central bank's interest-rate increase. "We remain on a reasonable path." The yield on the 10-year Treasury rose to 1.722% Friday , from 1.689% Thursday, but notched its second consecutive week of declines. Yields rise when prices fall. The Stoxx Europe 600 index rose on Friday but posted a 0.4% weekly decline, its fourth in a row. During that period, the index fell 3%, putting its year-to-date decline at 9.3%. The Japanese yen , which tends to rise in times of market stress, rose slightly Friday, hitting its strongest level against the dollar since late October 2014. The dollar dropped 0.1% against the yen to ¥108.06. Japan's Nikkei Stock Average rose 0.5% Friday but fell 2.1% for the week. More in Markets * Oil Surges on Fed Comments * Treasurys Weaken on Swing to Risk * Yen Retreats as Verbal Intervention Escalates * Gold Rises on Weaker Dollar Write to Corrie Driebusch at corrie.driebusch@wsj.com and Riva Gold at riva.gold@wsj.com Credit: By Corrie Driebusch and Riva Gold
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 8, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779343708
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779343708?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Crude Surges Near $40 a Barrel; Traders view strong economy, retreating dollar, OPEC meeting as fuel for oil rebound
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2016: n/a.
Abstract:
"Yesterday's speeches by Fed's Janet Yellen increased market optimism on the U.S. economy," said Michael Poulsen, oil analyst at Global Risk Management.
Full text: Oil prices surged to one of their strongest performances of the year as signs that oversupply may wane and the global economy may improve keep encouraging traders to bet on an oil rebound. Oil prices jumped 8% on the week, their best week in a month, largely from Friday's rally. For U.S. oil, it was the 12th session in a little more than two months that prices climbed about 5% or more. The market has become prone to large swings upward with many traders eager to bet a big recovery is on the way after 20 months of steady losses sent oil to a 13-year-low in February. There were few clear triggers for Friday's rally, though most boil down to further speculation on a recovery, brokers and traders said. Federal Reserve officials late Thursday and early Friday made comments considered optimistic on the U.S. economy and flat U.S. interest rates, both factors that can help support oil prices. And many traders are also still hopeful that global exporters could finalize a deal to cap output at a high-stakes summit scheduled for April 17. Light, sweet crude for May delivery gained $2.46, or 6.6%, to $39.72 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, settled up $3.27, or 8.5%, at $41.94 a barrel on ICE Futures Europe. Both had their largest daily gains Friday since mid-February. U.S. oil is up in six of its past eight weeks and Brent is now up in five of the past seven weeks. In a speech late Thursday, U.S. Federal Reserve Chairwoman Janet Yellen sought to dispel worries the U.S., the world's biggest oil consumer, is heading back toward recession. Earlier this year, concerns about weak economic growth helped push oil prices to decade lows. Federal Reserve Bank of New York President William Dudley on Friday morning said he still favors a go-slow approach to raising the central bank's short-term interest rate target. Keeping interest rates stable could do the same for the dollar or even weaken it, and a weaker dollar often leads to higher prices for oil and other dollar-denominated currencies by making them cheaper for international buyers. Oil traders have spent months with an eye on Federal Reserve policy, the global economy and the dollar. Several times in the past year a rallying dollar and weakening emerging markets have led to big falls in oil, and an end to those roadblocks could help smooth the path for oil to rebound. Oil's recent gains match similar swings upward last year, and oil typically has a seasonal rally early in the year as traders anticipate the annual spike in gasoline demand, said Brian LaRose, senior technical analyst at the brokerage ICAP PLC. U.S. gasoline consumption has just set new records for March , another factor that has helped push oil higher in recent months. "The whole seasonal pattern, I don't think it's done," Mr. LaRose said. "And there's a lot of hope...that OPEC's going to save the day." Qatar is hosting a rare meeting for some leaders of the Organization of the Petroleum Exporting Countries to meet with producers from outside the cartel. It is a follow-up to a Feb. 16 pact among Saudi Arabia, Russia, Qatar and Venezuela to freeze their output at January levels in a bid to bring oil supply back in line with demand and raise prices. The has been one of the biggest sparks for oil in the past two months, causing its sharpest rally in years, but investors are still divided about whether a deal will be reached or whether it will be helpful even if it is. Many have pointed out that Iran, the world's seventh-largest producer, has said it won't join, keeping plans for a rapid increase in production now that economic sanctions against it have recently ended. Late Friday Bloomberg reported that Carlos Pareja Yannuzelli, Ecuador's Minister of Hydrocarbons, said producers won't talk about output cuts at the meeting. And analysts at Société Générale SA estimated only 50% chance of a successful freeze agreement. But that news did little to pare Friday's gains in the crude market. "A freeze agreement excluding Iran is all about market psychology. It will have little to no impact on real crude production," Société Générale analyst Michael Wittner wrote. "However, the impact of market psychology could still be quite large." Bullish traders have also been optimistic about signs U.S. supply is declining and high stockpiles are starting to fall, brokers and analysts said. U.S. crude-oil supplies fell by 4.9 million barrels in the week ended April 1, the Energy Information Administration said Wednesday. Some dismissed that change as an anomaly, but others are watching refinery outages that have cut off gasoline supplies and increased distillate loadings on export ships in the Gulf of Mexico, and anticipating all that will cause oversupply to wane faster than expected, said Scott Shelton, broker at ICAP PLC. That has bullish speculators driving prices in the short-term, despite a lot of data that suggests oversupply hasn't significantly improved, he added. "Perception rules in April, and reality starts hitting in May and June, which is that we have more than enough product," Mr. Shelton said. "This market is borderline untradeable." Gasoline futures settled up 8.25 cents, or 6%, at $1.4637 a gallon. It finished the week up 6.21 cents, or 4.4%, its best week in about a month and now up five times in the past seven weeks. Diesel futures rose 7.47 cents, or 6.6%, to $1.2004 a gallon. It finished the week up 6.87 cents, or 6.1%, ending a two-week losing streak with its best weekly performance in about a month. Georgi Kantchev contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Oil consumption; Recessions; Crude oil prices; Petroleum industry
Location: Iran United States--US
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779357620
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Vietnam Tells China to Remove Oil Rig From Disputed Waters; Previous placement of rig HYSY 981 sparked riots in Vietnam
Author: Vu, Trong Khanh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2016: n/a.
Abstract:
The country's legislature on Thursday formally elected Nguyen Xuan Phuc as prime minister, replacing Nguyen Tan Dung, an outspoken and popular critic of China's military and commercial expansion in the South China Sea in recent years.
Full text: HANOI--Vietnam's government on Thursday said it had told China to pull an oil rig from waters between the two countries that haven't been demarcated and urged Beijing not to drill for oil or gas in the area. China National Offshore Oil Corp. towed the rig, known as HYSY 981, into a disputed area of the South China Sea in May 2014, triggering an uproar in Vietnam. Anti-Chinese riots broke out in several parts of the country while Chinese and Vietnamese coast-guard and fishing vessels stood off against each other at sea. In a statement on Vietnam's government website, foreign ministry spokesman Le Hai Binh said China last pulled the rig to its present location in the mouth of the Gulf of Tonkin on Sunday. It was towed to a nearby location in January. "Vietnam strongly protests this and demands that China drop its drilling plans and move it out of the area," Mr. Binh said. He said Vietnam had lodged an official protest with China's embassy in Hanoi. In Beijing, Foreign Ministry spokesman Hong Lei told a news briefing on Friday that the "operation is in undisputed Chinese waters and it is a normal, commercial exploration. We hope relevant countries would take an objective and reasonable view on this." This latest spat comes as relations between the two countries are deteriorating again. Vietnamese authorities last week seized a Chinese ship they said had illegally entered Vietnamese waters carrying 100,000 liters of diesel fuel. State media in Hanoi reported the captain of the three-man vessel as saying the boat was supplying oil to Chinese fishing boats in the area. It also comes as Vietnam completes its new leadership lineup . The country's legislature on Thursday formally elected Nguyen Xuan Phuc as prime minister, replacing Nguyen Tan Dung, an outspoken and popular critic of China's military and commercial expansion in the South China Sea in recent years. Mr. Phuc joins State President Tran Dai Quang and Communist Party Secretary-General Nguyen Phu Trong, who has grown more critical of China's role in the region, as the third of the country's top leaders. Write to Vu Trong Khanh at Trong-Khanh.Vu@dowjones.com Credit: By Vu Trong Khanh
Location: China Beijing China Vietnam Gulf of Tonkin South China Sea
People: Trong, Nguyen Phu Hong Lei Dung, Nguyen Tan
Company / organization: Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 8, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779358226
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Copyright: (c) 20 16 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Petrofac Launches Investigation Into Bribery and Corruption Allegations; Internal inquiry comes after allegations of bribery and corruption related to some oil deals and contracts
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2016: n/a.
Abstract:
Australia's Fairfax Media and the Huffington Post, citing access to what those media outlets say are tens of thousands of leaked emails, have reported that Monaco-based Unaoil S.A.M. paid bribes on behalf of other firms, including Petrofac, to secure oil industry-related work around the world.
Full text: LONDON--U.K. oil-services company Petrofac PLC said it launched an internal investigation into allegations of bribery and corruption related to some oil deals and contracts. Australia's Fairfax Media and the Huffington Post, citing access to what those media outlets say are tens of thousands of leaked emails, have reported that Monaco-based Unaoil S.A.M. paid bribes on behalf of other firms, including Petrofac, to secure oil industry-related work around the world. Those reports have triggered the disclosure of probes into the matter in the U.K. and Monaco. Iraq's prime minister earlier this month called for an investigation as well. The reports couldn't be independently verified. The two outlets reported Unaoil paid bribes on behalf of Petrofac to win contracts in Kazakhstan, Kuwait, Iraq and Syria. Petrofac said late Thursday in a statement on its website that it hadn't found any evidence of wrongdoing. But it said it has appointed law firm Freshfields Bruckhaus Deringer and consultancy KPMG LLP to assist in conducting a full investigation. "We take any allegations of activities that may contravene our strict antibribery and corruption standards very seriously," Petrofac said. "We aspire to the highest standards of ethical behavior and we are determined to investigate these allegations to the fullest extent possible," the statement added. Unaoil said in a statement earlier this month that it denies the "grave allegations." The company and its controlling family "take these extremely seriously and will do all that we can to defend ourselves," it said. "Many appalling things have been said about our business, allegations are being treated as fact, and speculation is rife." Authorities in Monaco have said that they raided Unaoil's offices there last week and searched the homes of some of its executives, in cooperation with an investigation being conducted by Britain's Serious Fraud Office. Unaoil executives were also questioned, Monaco authorities said in a statement last week. The raids and interviews are part of an "investigation into bribery involving international oil companies," the statement said. A spokesman at Britain's SFO said it was aware of the allegations against Petrofac and Unaoil, but couldn't confirm or deny its interest in the matter. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Subject: Petroleum industry; Bribery
Location: Australia Kuwait Monaco United Kingdom--UK Iraq Syria Kazakhstan
Company / organization: Name: Petrofac; NAICS: 541330, 236210; Name: Fairfax Media; NAICS: 511120; Name: Huffington Post; NAICS: 519130, 518210; Name: KPMG LLP; NAICS: 541211; Name: Freshfields Bruckhaus Deringer; NAICS: 541110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 8, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779371658
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Government Bonds Weaken as Investors Swing to Risk; With equities and oil on the rise, haven assets taper off
Author: Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2016: n/a.
Abstract:
U.S. government bonds weakened Friday, as investor sentiment swung back in favor of riskier assets, buoyed by rising oil prices, a weaker Japanese yen and reassurances from Federal Reserve Chairwoman Janet Yellen about the strength of the domestic economy.
Full text: U.S. government bonds weakened Friday, as investor sentiment swung back in favor of riskier assets, buoyed by rising oil prices, a weaker Japanese yen and reassurances from Federal Reserve Chairwoman Janet Yellen about the strength of the domestic economy. Comments from Japan's finance minister Taro Aso that he may act against "one-sided" yen increases helped pushed down the value of the yen against the dollar after it surged Thursday, raising concerns about the world's third-largest economy, the effectiveness of central bank policies and, by extension, global growth prospects. In a speech late Thursday, Ms. Yellen also strove to ease economic anxieties, saying the U.S. economy is "on a solid course" and is "not a bubble economy." That helped push up oil prices, which in turn has bolstered investors' risk appetite, analysts said. "This week has been a bit of a drift," said Gennadiy Goldberg, U.S. rates strategist at TD Securities. "We've taken cues mainly from risk sentiment, and risk sentiment has taken a lot of cues from oil." In recent trading, the yield on the benchmark 10-year Treasury note was 1.724%, according to Tradeweb, compared with 1.689% Thursday. Yields rise as bond prices fall. Despite the small increase Friday, government bond yields have fallen sharply this year as investors continue to grapple with low growth and subdued inflation. While the labor market continues to improve, expectations for first-quarter growth have declined recently, with the Federal Reserve Bank of Atlanta's GDPNow model now forecasting a growth rate of just 0.4%, compared with 1.4% on March 24. Unconventional monetary stimulus adopted by central banks in Japan and Europe have generated a growing pool of negative-yield government bonds, making U.S. government bonds look attractive by comparison. Renewed concerns over Greece's debt problems and speculation about the U.K.'s fate in the European Union before a referendum in June have also been driving investors to preserve capital in high-grade debt markets, as has the Federal Reserve's cautious stance in raising interest rates. Despite her confidence in the stability of the economy, Ms. Yellen has repeatedly said that Fed is in no hurry to tighten monetary policy, given the uncertain global outlook. Interest rate futures, which investors use to bet on the Fed's rate policy outlook, have priced in only one rate increase before the end of the year. Write to Sam Goldfarb at sam.goldfarb@wsj.com Credit: By Sam Goldfarb
Subject: Central banks; Interest rates; Federal Reserve monetary policy; Government bonds; American dollar
Location: United States--US Japan
People: Aso, Taro
Company / organization: Name: European Union; NAICS: 926110, 928120; Name: Federal Reserve Bank of Atlanta; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779493954
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779493954?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Weekly U.S. Oil-Rig Count Declines by 8; Number of oil-drilling rigs is viewed as a proxy for activity in the sector
Author: Stahl, George
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Apr 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs rose by one to 89 from a week ago .
Full text: The U.S. oil-rig count fell by eight to 354 in the latest week, according to Baker Hughes Inc., maintaining a trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to fall. But it hasn't fallen enough to relieve the global glut of crude. There are now about 78% fewer rigs of all kinds from a peak of 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs rose by one to 89 from a week ago . The U.S. offshore-rig count was 25 in the latest week, down one from the previous week and down eight from a year earlier. Oil prices rose Friday , continuing their strong week, amid signs that the energy glut may be waning and the global economy may be improving. Recently, U.S. crude oil gained 6% to $39.52 a barrel. Write to George Stahl at george.stahl@wsj.com Corrections & Amplifications An earlier version of this article miscalculated the percentage drop in oil rigs from the peak in October 2014. The number of oil rigs dropped 78% from the peak, not 72%. (May 6, 2016) Credit: By George Stahl
Subject: Oil service industry; Supply & demand
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779532859
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779532859?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Pay Shrinks for Most Oil CEOs, as Crude's Swoon Hits Stocks; For Exxon's Tillerson, total compensation for 2015 fell 18%, but BP's Dudley got pay bump
Author: Olson, Bradley; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Apr 2016: n/a.
Abstract:
In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest.
Full text: Most--but not all--top oil executives are seeing their pay shrink, after a plunge in crude prices that has erased $200 billion in stock-market value from the world's largest publicly traded energy companies. Bob Dudley, BP PLC's chief executive, enjoyed about a 20% bump in pay to $19.6 million in 2015, despite his company's $5.2 billion loss for the year and an accompanying stock-price decline of 11%. Many BP shareholders are incensed by the increase, and investor-advisory firms including Institutional Shareholder Services are counseling them not to ratify Mr. Dudley's pay package at the company's annual meeting Thursday. "This proposed increase is both unreasonable and insensitive," said Ashley Hamilton Claxton, corporate-governance manager at Royal London Asset Management, which holds BP shares worth about $600 million. She plans to vote against Mr. Dudley's pay. BP defended the pay package. "Despite the very challenging environment, BP's safety and operating performance was excellent throughout 2015, and management also responded early and decisively to the steep fall in the oil price," a company spokesman said. Other executive pay packages shrank along with stock prices. Exxon Mobil Corp. released data Wednesday that showed CEO Rex Tillerson's salary rose 6% to $3 million in 2015 even as the company's shares lost 15% of their value. But Mr. Tillerson's total pay fell 18% to $27.3 million, due to a lower bonus, stock awards and interest-rate-related changes in his pension. For the past five years, oil giants Exxon, Chevron Corp., Royal Dutch Shell PLC and BP have paid their top bosses nearly $500 million in combined compensation, even though the companies' annualized returns for the period have undershot those of the S&P 500. In 2015, Chevron chief John Watson's pay, including salary, bonus and stock options, rose 3%, but with pension-benefit changes his total compensation fell by 15% to about $22 million. Most of Mr. Watson's pay rises and falls with shareholder value, based on stock prices, with added emphasis on safety and other factors aligned with good corporate governance, said Kurt Glaubitz, a company spokesman. "Overall, Mr. Watson's 2015 compensation package recognizes and reflects the value he continues to deliver to Chevron's stockholders," Mr. Glaubitz said. The salary and bonus of Anglo-Dutch Shell's CEO, Ben van Beurden, who is paid in euros, fell 13% to $5.5 million when translated into dollars. Mr. van Beurden's overall pay for 2015, including pension changes, tumbled 81%. Shell's profit for the year plunged 80%. "Shell's executive compensation reflects delivery of our strategy, measured by both short-term and long-term targets," said Jonathan French, a Shell spokesman. "There is a clear alignment between the company's performance and our compensation policies." Stockholders at Chevron, Exxon and Shell will get to vote on executive pay next month--though the votes aren't binding. At those meetings, the companies are expected to outline their worst first-quarter performances in decades, analysts say. Including BP, the four biggest Western oil companies have laid off, or are in the process of shedding, more than 25,000 workers because of the protracted downturn in energy prices. At the two dozen energy companies in the S&P 500 index, median pay, excluding pension changes, fell less than 1% from 2014 last year, according to an analysis by ISS Corporate Solutions Inc. That's far less than the cumulative 24% price decline for those companies. Executive compensation in other industries, except for retailing, increased last year. In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest. Those incentives are paid out over the long term, but they often get counted as part of annual pay packages. Compensation packages at many energy companies are built to work well in most market conditions, but some were never set up to manage the impact of a crash in oil-and-gas prices, said John Roe, head of advisory at ISS Corporate Solutions. "Sometimes, that produces results that don't pass the smell test," he said. "When that happens, companies need to step back and make sure that they are more responsive and aligned with shareholders. When they don't, they will run into issues year after year." ISS hasn't issued its recommendations on whether shareholders should endorse or reject pay packages at Exxon, Chevron and Shell, but says it will do so in coming weeks. One reason for discrepancies between executive pay and stock performance is that BP and other oil companies reward executives based on relative shareholder returns. That can blunt the impact of rising or falling oil prices because payouts depend more on how well a company performs relative to its peers, said Kevin Murphy, a professor at the University of Southern California's Marshall School of Business. Compared with the other three major oil companies, BP shares fell the least in 2015, dropping 11.7% including reinvested dividends, according to data from Morningstar. That is slightly ahead of Exxon's 12.6% share-price decline. Chevron's stock fell 16% last year, while Shell's was down 26%. Write to Bradley Olson at Bradley.Olson@wsj.com and Sarah Kent at sarah.kent@wsj.com Corrections & Amplifications For Exxon's Tillerson, total compensation for 2015 fell 18%. The sub-heading of an earlier version of this article misstated the year as 2005. (April 14, 2016) Credit: By Bradley Olson and Sarah Kent
Subject: Executive compensation; Petroleum industry; Chief executive officers; Prices; Wages & salaries; Energy industry
People: van Beurden, Ben Tillerson, Rex W
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Royal London Asset Management; NAICS: 523930; Name: University of Southern California; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780766133
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780766133?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Iran and Oil: You Ain't Seen Nothing Yet; Iran's feared return to the oil market has been underwhelming, but just wait
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Apr 2016: n/a.
Abstract:
A more significant problem according to Helima Croft, head of commodity strategy at RBC Capital Markets, is residual U.S. sanctions on dollar transactions.
Full text: "Freeze" is a word rarely heard in balmy Doha, but it will be the talk of the town this week. That isn't because a delegation from frigid Moscow plans an unusual appearance at a meeting of oil exporters being held in Qatar's capital next Sunday. The star of the show, and quite possibly the spoiler, will be from nearby Iran. Several large oil producers have pledged to freeze output at current levels if others do the same . But Iran, recently freed from sanctions, is in the process of ramping up output and in no mood to stop . A funny thing happened when restrictions were lifted on Iran, though: the market sold the rumor and bought the fact, as it were. Oil prices were under pressure at the prospect of Iran's return but have bounced 50% over the past two months. While such upside-down reactions aren't unusual in some markets--bond yields acting oddly after Federal Reserve policy changes, for example--there is as much of a fundamental as a psychological basis in this case. The number that everyone in the energy market has penciled in for Iran's output, absent voluntary restraint, is 4 million barrels a day. That number stems from both the country's presanctions peak and Iran's stated ambition. Whether it gets there and how quickly is a matter of disagreement. Iran's oil minister Bijan Zangeneh said that for the one-month period ended April 19, exports would be some 2 million barrels a day. He also predicted that exports will have reached 4 million by next March. The current export figures are an improvement but lower than expected. True, Iran's fields and infrastructure are sorely in need of investment, and production can't simply be switched on and off. But analysts thought the country had 30 million to 50 million barrels or more stored in a giant fleet of supertankers in mid-January. Many of those tankers aren't completely seaworthy, though, or lack proper insurance for voyages to European ports. There also have been reports of Saudi Arabia and Bahrain restricting port access to Iranian vessels. A more significant problem according to Helima Croft, head of commodity strategy at RBC Capital Markets, is residual U.S. sanctions on dollar transactions. That has made Iran's re-entry onto western markets difficult. The upshot is that Iran's slow start may have given false comfort to the rebounding oil market. Some analysts think that the amount of Iranian crude stored on supertankers has even increased. Betting that those barrels won't show up at a refinery soon or that Iran will willingly cut short its return to the oil market would be naive. Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Subject: Petroleum industry
Location: Qatar Iran
Company / organization: Name: RBC Capital Markets; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 10, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779768688
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779768688?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
TransCanada Restarts Keystone Oil Pipeline After Leak; Company says repairs made to leak in South Dakota
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Apr 2016: n/a.
Abstract:
The 3,000-mile-long Keystone pipeline carries light and heavy crude oil from Hardisty, Alberta to a refinery and oil terminal in Illinois, as well as storage facilities at Cushing, Okla. and refineries in Port Arthur, Texas.
Full text: TransCanada Corp. said its Keystone oil pipeline resumed pumping Sunday after a nearly weeklong shutdown due to a leak discovered in South Dakota. The Canadian company said it has completed repairs to the leak , which caused a spill of about 400 barrels, or 16,800 gallons near the company's Freeman pump station in Hutchinson County. It said it would initially operate the pipeline at reduced pressure to make sure it is working normally, with aerial patrols and visual inspections of the leak site. "Clean up and land restoration has already started and will continue over the coming days," the company said regarding the spill. The 3,000-mile-long Keystone pipeline carries light and heavy crude oil from Hardisty, Alberta to a refinery and oil terminal in Illinois, as well as storage facilities at Cushing, Okla. and refineries in Port Arthur, Texas. Phillips 66 said last week that it has been forced to run its 306,000-barrel-a-day refinery in Wood River, Illinois at a slower pace while Keystone was closed. Write to Dan Molinski at Dan.Molinski@wsj.com Credit: By Dan Molinski
Subject: Pipelines; Petroleum industry; Petroleum refineries
Location: Texas Illinois Wood River Hutchinson County Texas South Dakota
Company / organization: Name: TransCanada Corp; NAICS: 486210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779783469
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779783469?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibit ed without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Pay Shrinks for Most Oil CEOs, as Crude's Swoon Hits Stocks; For Exxon's Tillerson, total compensation for 2015 fell 18%, but BP's Dudley got pay bump
Author: Olson, Bradley; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Apr 2016: n/a.
Abstract:
In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest.
Full text: Most--but not all--top oil executives are seeing their pay shrink, after a plunge in crude prices that has erased $200 billion in stock-market value from the world's largest publicly traded energy companies. Bob Dudley, BP PLC's chief executive, enjoyed about a 20% bump in pay to $19.6 million in 2015, despite his company's $5.2 billion loss for the year and an accompanying stock-price decline of 11%. Many BP shareholders are incensed by the increase, and investor-advisory firms including Institutional Shareholder Services are counseling them not to ratify Mr. Dudley's pay package at the company's annual meeting Thursday. "This proposed increase is both unreasonable and insensitive," said Ashley Hamilton Claxton, corporate-governance manager at Royal London Asset Management, which holds BP shares worth about $600 million. She plans to vote against Mr. Dudley's pay. BP defended the pay package. "Despite the very challenging environment, BP's safety and operating performance was excellent throughout 2015, and management also responded early and decisively to the steep fall in the oil price," a company spokesman said. Other executive pay packages shrank along with stock prices. Exxon Mobil Corp. released data Wednesday that showed CEO Rex Tillerson's salary rose 6% to $3 million in 2015 even as the company's shares lost 15% of their value. But Mr. Tillerson's total pay fell 18% to $27.3 million, due to a lower bonus, stock awards and interest-rate-related changes in his pension. For the past five years, oil giants Exxon, Chevron Corp., Royal Dutch Shell PLC and BP have paid their top bosses nearly $500 million in combined compensation, even though the companies' annualized returns for the period have undershot those of the S&P 500. In 2015, Chevron chief John Watson's pay, including salary, bonus and stock options, rose 3%, but with pension-benefit changes his total compensation fell by 15% to about $22 million. Most of Mr. Watson's pay rises and falls with shareholder value, based on stock prices, with added emphasis on safety and other factors aligned with good corporate governance, said Kurt Glaubitz, a company spokesman. "Overall, Mr. Watson's 2015 compensation package recognizes and reflects the value he continues to deliver to Chevron's stockholders," Mr. Glaubitz said. The salary and bonus of Anglo-Dutch Shell's CEO, Ben van Beurden, who is paid in euros, fell 13% to $5.5 million when translated into dollars. Mr. van Beurden's overall pay for 2015, including pension changes, tumbled 81%. Shell's profit for the year plunged 80%. "Shell's executive compensation reflects delivery of our strategy, measured by both short-term and long-term targets," said Jonathan French, a Shell spokesman. "There is a clear alignment between the company's performance and our compensation policies." Stockholders at Chevron, Exxon and Shell will get to vote on executive pay next month--though the votes aren't binding. At those meetings, the companies are expected to outline their worst first-quarter performances in decades, analysts say. Including BP, the four biggest Western oil companies have laid off, or are in the process of shedding, more than 25,000 workers because of the protracted downturn in energy prices. At the two dozen energy companies in the S&P 500 index, median pay, excluding pension changes, fell less than 1% from 2014 last year, according to an analysis by ISS Corporate Solutions Inc. That's far less than the cumulative 24% price decline for those companies. Executive compensation in other industries, except for retailing, increased last year. In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest. Those incentives are paid out over the long term, but they often get counted as part of annual pay packages. Compensation packages at many energy companies are built to work well in most market conditions, but some were never set up to manage the impact of a crash in oil-and-gas prices, said John Roe, head of advisory at ISS Corporate Solutions. "Sometimes, that produces results that don't pass the smell test," he said. "When that happens, companies need to step back and make sure that they are more responsive and aligned with shareholders. When they don't, they will run into issues year after year." ISS hasn't issued its recommendations on whether shareholders should endorse or reject pay packages at Exxon, Chevron and Shell, but says it will do so in coming weeks. One reason for discrepancies between executive pay and stock performance is that BP and other oil companies reward executives based on relative shareholder returns. That can blunt the impact of rising or falling oil prices because payouts depend more on how well a company performs relative to its peers, said Kevin Murphy, a professor at the University of Southern California's Marshall School of Business. Compared with the other three major oil companies, BP shares fell the least in 2015, dropping 11.7% including reinvested dividends, according to data from Morningstar. That is slightly ahead of Exxon's 12.6% share-price decline. Chevron's stock fell 16% last year, while Shell's was down 26%. Write to Bradley Olson at Bradley.Olson@wsj.com and Sarah Kent at sarah.kent@wsj.com Corrections & Amplifications For Exxon's Tillerson, total compensation for 2015 fell 18%. The sub-heading of an earlier version of this article misstated the year as 2005. (April 14, 2016) Credit: By Bradley Olson and Sarah Kent
Subject: Executive compensation; Petroleum industry; Chief executive officers; Prices; Wages & salaries; Energy industry
People: van Beurden, Ben Tillerson, Rex W
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Royal London Asset Management; NAICS: 523930; Name: University of Southern California; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780748658
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780748658?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Climbs Back Above $40; Hopes of an output freeze build as members of OPEC and Russia are set to meet in Doha
Author: Berthelsen, Christian; Baxter, Kevin; Hsu, Jenny W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Apr 2016: n/a.
Abstract:
"China will remain a sizable crude importer, as strong domestic demand for gasoline and petrochemical feedstock, refining capacity additions and continued stockpiling activities drive imports," said BMI Research.
Full text: The U.S. oil benchmark settled above $40 a barrel for the first time in nearly three weeks and the global Brent contract touched a four-month high Monday, as the dollar faded and hopes rose for a coming agreement among sovereign producers that would begin to reduce the global crude glut. Both major contracts rose for the second trading session in a row, after surging more than 6% on Friday. The U.S. benchmark ended 1.6% higher at $40.36 a barrel on the New York Mercantile Exchange, while the Brent contract rose 2.1% to end at $42.83 a barrel on the ICE Futures Europe exchange. Analysts said there appeared to be little direct reason for the gains Monday, and said it was likely a combination of a softening dollar, hopes that U.S. oil production and inventory data this week would extend declines last week and that Sunday's meeting of producers in Doha, Qatar, would yield an agreement to freeze output levels. A softening dollar can drive oil higher as it becomes cheaper for traders using foreign currencies. Oil prices have surged more than 14% in the last week, including Friday's 6% gain, as U.S. Energy Department data last week showed a surprise decline in U.S. supplies, prompting bearish speculative traders to close out short sales against the market. And the agency's estimate of domestic oil production was just barely above 9 million barrels a day, stoking hopes that it would fall under that threshold in this week's report. Meanwhile, investors are becoming increasingly optimistic that Sunday's meeting in Qatar among major sovereign oil producers will yield results. The meeting will include members and nonmembers of the Organization of the Petroleum Exporting Countries, which may agree to freeze production at January or February levels. "It does appear some people are willing to roll the dice on the possibility there's some kind of agreement at Doha," said Robert Yawger, director of the futures division at Mizuho Securities USA. Yet that has largely been at odds with the view of analysts and strategists, who think that even if an agreement is reached it will do little to curb the world's growing crude glut. Indeed, Iraq said Sunday that it boosted production to a record 4.55 million barrels a day in March. "We do not expect the meeting to deliver a bullish surprise as we believe production cuts make little sense given it has taken 18 months for the rebalancing to finally start," Goldman Sachs said in a note. Morgan Stanley said the 4.9 million barrel decline in U.S. inventories last week was counter-seasonal and due to a number of factors that won't be repeated. The bank predicted that sentiment will turn negative again this week, leading to lower prices. Commerzbank warned of a price correction if the Doha meeting doesn't produce a viable plan for freezing production. As supply isn't likely to fall off much in the near term, investors are looking at major oil consumers, such as China, to soak up excess crude. Preliminary data on China's March oil imports and exports will be released Wednesday. "China will remain a sizable crude importer, as strong domestic demand for gasoline and petrochemical feedstock, refining capacity additions and continued stockpiling activities drive imports," said BMI Research. In February, China's crude imports rose nearly 25% on-year to 31.8 million metric tons, equivalent to roughly 8 million barrels a day, the highest daily average on the record. In refined product markets, gasoline futures rose 3% to $1.5077 a gallon, while diesel futures gained 1.2% to end at $1.2147 a gallon. Write to Christian Berthelsen at christian.berthelsen@wsj.com , Kevin Baxter at Kevin.Baxter@wsj.com and Jenny W. Hsu at jenny.hsu@wsj.com Credit: By Christian Berthelsen, Kevin Baxter and Jenny W. Hsu
Subject: Petroleum industry; Supply & demand; Agreements; Futures; Petroleum production
Location: United States--US Qatar
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: Morgan Stanley; NAICS: 523110, 52312 0, 523920; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 11, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779860028
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779860028?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Mexico's February Industrial Production Helped by Leap Year; Industrial production rose from a year earlier, but was down slight from January on lower construction and oil output
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Apr 2016: n/a.
Abstract:
Industrial production rose 2.6% from February 2015, with increases in manufacturing, utilities and construction offset slightly by lower oil and gas output, the National Statistics Institute said Monday.
Full text: MEXICO CITY--Mexican industrial production rose more than expected in February from a year before, helped by an extra leap year day, but was down slightly from January on lower construction and oil output. Industrial production rose 2.6% from February 2015, with increases in manufacturing, utilities and construction offset slightly by lower oil and gas output, the National Statistics Institute said Monday. The increase was above the 1.3% median estimate of nine economists polled by The Wall Street Journal. Excluding the positive leap-year calendar effect, output rose 0.8%. Weakness in mining and construction led to a 0.1% seasonally adjusted decline from January, although factory output and utilities were higher. With February's increase from a year earlier, industrial production in the first two months of the year was up 1.7% from the same period in 2015. The positive calendar effect will be more than offset in March, when the Easter holiday week has already shown signs of lowering economic activity. The auto industry reported an 11% drop in production of cars and light trucks in March, attributing the decline mostly to the holiday. Leading retailer Wal-Mart de Mexico also reported slower-than-expected sales growth for that month. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Subject: Automobile industry; Industrial production
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 11, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779930689
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779930689?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Mexico to Use Central Bank Transfers to Pay Down Debt; Fraction of funds could be used to pay state oil company Pemex's debt
Author: Montes, Juan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Apr 2016: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexico's government said Monday it will use most of the $13.6 billion in excess funds from the central bank to reduce public debt, in a moment of fragility for the public finances after the sharp drop in oil prices. The Finance Ministry said it would use $9.5 billion, or 70% of the total, to repurchase existing federal government debt and lower the amount of debt to be issued this year. The rest will be transferred to a budget stabilization fund, and a small part used for Mexico's contributions to multilateral organizations such as the World Bank. The move is expected to support confidence in public finances after Moody's Investors Service changed the outlook for Mexico's sovereign debt rating to negative from stable, citing low oil prices and weak economic growth. Moody's said last month it was concerned about the impact that government financial support for state oil company Petróleos Mexicanos could have on its plans to lower fiscal deficits. The government is committed to lowering the public sector deficit this year to 3.5% of gross domestic product from 4.1% in 2015, and has announced spending cuts in the two last years. But a bailout of Pemex could threaten those ambitious goals. It was unclear whether the government will use any of the central bank funds to support Pemex, which has been suffering liquidity problems after prices of Mexico's oil benchmark fell around 70% since mid-2014. A fraction of the funds could be used by the federal government to pay Pemex's overdue payments to suppliers and prepay other company debts, according to a senior Pemex official who spoke on condition of anonymity because he isn't authorized to talk. Government support for Pemex, which last year had a record after-tax loss of $30 billion, is conditioned to the implementation of an austerity plan to stem wasteful spending and operational inefficiencies, the official said. Pemex has committed to cut spending by around $5.7 billion this year. Mexico's Finance Ministry said it is still evaluating different tools to support Pemex. An announcement is expected in coming days. Pemex's financial troubles are so serious that the company has already had severe liquidity problems. One week in January, Pemex's coffers were down to just $8 million left in cash, according to the Pemex official. A major problem for Pemex is the lack of flexibility to adjust spending when income falls. The company can't easily adjust its workforce of more than 150,000--well above other major oil companies--and has pension liabilities that amounted last year to around $85 billion. Pemex reached an agreement in November with the powerful oil workers union to overhaul the pension benefits, a much-needed lifeline that is expected to save around $10.6 billion. The government has committed to assume a portion of Pemex's pension-related debt equivalent to the savings already agreed. But so far it is unclear how the government will finance those liabilities. Low oil prices and declining oil output have impacted Mexico's budget, which is still dependent on oil revenue, limiting the government's maneuvering room. Mexico's public debt is still relatively low at 46% of GDP, but has been steadily rising in recent years. The funds from the Bank of Mexico are almost eight times as much as the previous year. Last year, the central bank transferred 31.4 billion pesos to the government from its 2014 operations. In 2015, the amount increased with the sharp depreciation of the Mexican peso against the U.S. dollar. Under changes made last year in the budget laws, the government must use most of the money from the central bank to lower public debt. Anthony Harrup contributed to this article. Write to Juan Montes at juan.montes@wsj.com Credit: By Juan Montes
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 11, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1779967067
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1779967067?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Marathon to Sell $870 Million in Wyoming Assets; The oil company increases its target for noncore asset sales
Author: Beckerman, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Apr 2016: n/a.
Abstract:
Marathon Oil Corp. will sell its Wyoming upstream and midstream assets for $870 million, as big energy producers continue to reshape their portfolios during a severe and extended pricing downturn.
Full text: Marathon Oil Corp. will sell its Wyoming upstream and midstream assets for $870 million, as big energy producers continue to reshape their portfolios during a severe and extended pricing downturn. The Houston company said in February that it would increase its target for noncore asset sales to a range of $750 million to $1 billion, from $500 million, as part of a goal of "living within our means." The Wyoming transaction and other deals announced Monday totaled $950 million, putting Marathon ahead of its revised target with about $1.3 billion of sale agreements since last year. A Marathon news release didn't identify the buyers. The Wyoming deal will include waterflood developments in the Big Horn and Wind River basins and the 570-mile Red Butte pipeline. "Ongoing portfolio management continues to drive the simplification and concentration of our portfolio to lower risk, higher return U.S. resource plays," Marathon said. Several energy producers have been successful in efforts to raise cash in stock offerings. Marathon's upsized stock sale worth up to $1.275 billion priced on Feb. 29 . Marathon announced a 2016 capital spending program of $1.4 billion in February, down from $3 billion last year. The company posted a $793 million fourth-quarter loss. Write to Josh Beckerman at josh.beckerman@wsj.com Credit: By Josh Beckerman
Subject: Portfolio management; Petroleum industry; Financial performance
Location: Wyoming United States--US Wind River
Company / organization: Name: Marathon Oil Corp; NAICS: 486110, 324110, 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780003228
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780003228?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced w ith permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Nigeria Grapples With Abrupt End to Rapid Growth; Dwindling oil revenue puts brakes on Africa's top economy, sparks a currency crisis and long lines for gasoline
Author: Hinshaw, Drew; Parkinson, Joe
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Apr 2016: n/a.
Abstract:
"No shower, no toothbrush....If this continues, there will be big trouble." [...]recently, Nigeria and its economic capital were symbols of Africa's new consumer class. To show his commitment, the central bank governor recently buried his mother in a made-in-Nigeria funeral, with food, drink and decorations all sourced locally: "The central bank governor practiced what he preached," said one senior bank official.
Full text: LAGOS, Nigeria--In Africa's top economy, the oil bust is beginning to hit the streets. With 187 million people, and trillions of dollars in untapped crude oil, Nigeria was meant to power Africa's rise. Instead, it is becoming--for the moment--a symbol of how fast and far low oil prices have dragged emerging markets down. Months of dwindling oil revenue have prompted a scarcity of dollars here, as the government hoards foreign currency to safeguard shrinking reserves. That is starting to hit Nigerians rich and poor alike: On Monday, the country's stock market fell almost 3% on news that MSCI is considering removing the country from its benchmark frontier markets index. Meanwhile, the World Bank said Nigeria's economic growth slid to 2.8% in 2015 from 6.3% the year before, and the International Monetary Fund says this year's growth will slip to 2.3%, slower than the population, which adds 13,000 people daily. Factories are closing because they can't find dollars to import parts. Supermarkets are struggling to keep shelves stocked. Power plants have virtually stopped producing electricity because they can't pay for maintenance. New shopping malls are empty and ordinary citizens are going to lengths to find some basic goods. To keep his economy growing, President Muhammadu Buhari is traveling to China this week, hoping to secure a multibillion-dollar loan for new infrastructure, including railroads, spokesman Garba Shehu said. This year, Nigeria may issue its first yuan-denominated bond, Finance Minister Kemi Adeosun said on Saturday. Back home, Africa's top oil producer is unable to import enough gasoline. Drivers in this city of 21 million have spent days inching through miles-long lines to fill their tanks at the few pumps still operating. To keep order, soldiers snap whips at oil can-toting line-jumpers and break up fights between exasperated drivers. "We are hungry and angry," said Victor Eten, a taxi driver who slept in his cab for three days to buy gas. "No shower, no toothbrush....If this continues, there will be big trouble." Until recently, Nigeria and its economic capital were symbols of Africa's new consumer class. Cineplexes, car dealerships and a fast-food arms race--KFC and Domino's, among others, opened here--spoke to the aspirations of the continent's largest city, Lagos. A decade of 7% economic growth brought Nigeria close to entering the world's 20 largest economies. It also lured home Nigerian talent from jobs and schools in the U.S. and Europe. These days, the euphoria has dimmed in Africa's most populous nation. The government, which sees the downturn as an opportunity to industrialize--breaking Nigeria's dependence on imports in an economy that relies on oil for three-quarters of revenue--also concedes that its constituents could face years of pain. "It will take a minimum of 18 months before we begin to see a recovery," said presidential spokesman Femi Adesina. "Through deft economic engineering, things will bounce back, but it's not going to be magic. It's not going to be overnight." Mr. Buhari has made progress in beating back the jihadist insurgency Boko Haram since taking office in May. Soldiers now hold down towns and highways once controlled by the Islamist group, whose violence occurs far from the country's economic nerve center. He is also making moves against corruption: Each day at 3 p.m., the new finance minister calls a different government agency and combs through its expenditures, item by item. But on the streets, daily frustrations are mounting. Electricity is so scarce that the country's national power plants didn't produce a single watt for several days last week--they couldn't import parts and services, said two senior members of Mr. Buhari's administration. Internet providers face similar woes. Nigerians abroad are stuck with ATM cards they can't use because the central bank has limited withdrawals outside the country. Bitcoin trades are up as Nigerian professionals scrounge for ways to move money--and increasingly, themselves--out of the country. "The structural worry I see is the middle class," said Keith Richards, a Guinness executive who has worked in Nigeria for four decades. "We could see an exodus of the future of this country. People are already leaving." Mr. Buhari says he hopes the scarcity of foreign goods will lead Nigerians to buy from their own farms and factories, sparking an industrial renaissance. Many new regulations encourage people to use Nigerian steel, eat local rice, and spend within the country's borders. To show his commitment, the central bank governor recently buried his mother in a made-in-Nigeria funeral, with food, drink and decorations all sourced locally: "The central bank governor practiced what he preached," said one senior bank official. Civil servants have been particularly hit: Mr. Buhari says his government inherited an empty treasury after crude prices collapsed starting in 2014. Twenty-seven of the country's 36 states are struggling to pay civil servants, he has said. He has asked lawmakers to cut spending, but they have balked, leaving the president without a budget he is willing to sign. Revenue recently took a second hit when saboteurs went underwater to break open a pipeline that carries 130,000 barrels of crude a day. The government says that attack, which it sees as a political move to undermine the president, cost the state $122 million in February alone. Aggravating the oil shock is a mounting foreign-currency crisis. In a bid to defend the naira, Nigeria's central bank has sharply restricted the availability of dollars. A weekly committee stipulates which banks are allowed to sell dollars and to whom, for what purchases, and at what price. The result: Businesses are increasingly unable to get the foreign exchange they need to import spare parts, pay off foreign lenders, travel internationally, and keep the economy running. Nigerians entrepreneurial enough to find dollars sell them for as much as twice the official exchange rate in back-alley trading shops, restaurants and on the street. Mr. Buhari's administration, which rode into power in May 2015 with a pledge to oust corruption, is running out of political room to act. Last year, his supporters danced at rallies waving his campaign logo--a broom--signifying a clean start. In recent months, newspapers have run stories about disenchanted voters burning brooms in bonfires. "They've got to get started," said Bismarck Rewane, managing director of Lagos research firm Financial Derivatives Co. "People are getting a bit impatient. That means there has to be action....There's some tension growing." From her laptop emporium in a four-story Lagos mall, saleswoman Joyce Nwando has watched young professionals who were meant to power her country's rise vanish. A year ago, selfie-snapping shoppers packed the food court: "It used to be that everything that happens in Lagos happens here," she said. Now, many stores are vacant, the lights are often off and some shopkeepers say they may close in the next few months. On Friday, a 3-D theater upstairs was about to screen the debut of "Batman v. Superman." Not a single customer was there. "People really don't have the money," said the theater's general manager, Franson Davis. "Everybody is just waiting for the light at the end of the tunnel." Write to Drew Hinshaw at drew.hinshaw@wsj.com and Joe Parkinson at joe.parkinson@wsj.com Credit: By Drew Hinshaw and Joe Parkinson
Subject: Power plants; Economic growth
Location: Africa Nigeria
Company / organization: Name: International Monetary Fund--IMF; NAICS: 522298; Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 11, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780010508
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780010508?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Pay Shrinks for Most Oil CEOs, as Crude's Swoon Hits Stocks; For Exxon's Tillerson, total compensation for 2015 fell 18%, but BP's Dudley got pay bump
Author: Olson, Bradley; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Apr 2016: n/a.
Abstract:
In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest.
Full text: Most--but not all--top oil executives are seeing their pay shrink, after a plunge in crude prices that has erased $200 billion in stock-market value from the world's largest publicly traded energy companies. Bob Dudley, BP PLC's chief executive, enjoyed about a 20% bump in pay to $19.6 million in 2015, despite his company's $5.2 billion loss for the year and an accompanying stock-price decline of 11%. Many BP shareholders are incensed by the increase, and investor-advisory firms including Institutional Shareholder Services are counseling them not to ratify Mr. Dudley's pay package at the company's annual meeting Thursday. "This proposed increase is both unreasonable and insensitive," said Ashley Hamilton Claxton, corporate-governance manager at Royal London Asset Management, which holds BP shares worth about $600 million. She plans to vote against Mr. Dudley's pay. BP defended the pay package. "Despite the very challenging environment, BP's safety and operating performance was excellent throughout 2015, and management also responded early and decisively to the steep fall in the oil price," a company spokesman said. Other executive pay packages shrank along with stock prices. Exxon Mobil Corp. released data Wednesday that showed CEO Rex Tillerson's salary rose 6% to $3 million in 2015 even as the company's shares lost 15% of their value. But Mr. Tillerson's total pay fell 18% to $27.3 million, due to a lower bonus, stock awards and interest-rate-related changes in his pension. For the past five years, oil giants Exxon, Chevron Corp., Royal Dutch Shell PLC and BP have paid their top bosses nearly $500 million in combined compensation, even though the companies' annualized returns for the period have undershot those of the S&P 500. In 2015, Chevron chief John Watson's pay, including salary, bonus and stock options, rose 3%, but with pension-benefit changes his total compensation fell by 15% to about $22 million. Most of Mr. Watson's pay rises and falls with shareholder value, based on stock prices, with added emphasis on safety and other factors aligned with good corporate governance, said Kurt Glaubitz, a company spokesman. "Overall, Mr. Watson's 2015 compensation package recognizes and reflects the value he continues to deliver to Chevron's stockholders," Mr. Glaubitz said. The salary and bonus of Anglo-Dutch Shell's CEO, Ben van Beurden, who is paid in euros, fell 13% to $5.5 million when translated into dollars. Mr. van Beurden's overall pay for 2015, including pension changes, tumbled 81%. Shell's profit for the year plunged 80%. "Shell's executive compensation reflects delivery of our strategy, measured by both short-term and long-term targets," said Jonathan French, a Shell spokesman. "There is a clear alignment between the company's performance and our compensation policies." Stockholders at Chevron, Exxon and Shell will get to vote on executive pay next month--though the votes aren't binding. At those meetings, the companies are expected to outline their worst first-quarter performances in decades, analysts say. Including BP, the four biggest Western oil companies have laid off, or are in the process of shedding, more than 25,000 workers because of the protracted downturn in energy prices. At the two dozen energy companies in the S&P 500 index, median pay, excluding pension changes, fell less than 1% from 2014 last year, according to an analysis by ISS Corporate Solutions Inc. That's far less than the cumulative 24% price decline for those companies. Executive compensation in other industries, except for retailing, increased last year. In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest. Those incentives are paid out over the long term, but they often get counted as part of annual pay packages. Compensation packages at many energy companies are built to work well in most market conditions, but some were never set up to manage the impact of a crash in oil-and-gas prices, said John Roe, head of advisory at ISS Corporate Solutions. "Sometimes, that produces results that don't pass the smell test," he said. "When that happens, companies need to step back and make sure that they are more responsive and aligned with shareholders. When they don't, they will run into issues year after year." ISS hasn't issued its recommendations on whether shareholders should endorse or reject pay packages at Exxon, Chevron and Shell, but says it will do so in coming weeks. One reason for discrepancies between executive pay and stock performance is that BP and other oil companies reward executives based on relative shareholder returns. That can blunt the impact of rising or falling oil prices because payouts depend more on how well a company performs relative to its peers, said Kevin Murphy, a professor at the University of Southern California's Marshall School of Business. Compared with the other three major oil companies, BP shares fell the least in 2015, dropping 11.7% including reinvested dividends, according to data from Morningstar. That is slightly ahead of Exxon's 12.6% share-price decline. Chevron's stock fell 16% last year, while Shell's was down 26%. Write to Bradley Olson at Bradley.Olson@wsj.com and Sarah Kent at sarah.kent@wsj.com Corrections & Amplifications For Exxon's Tillerson, total compensation for 2015 fell 18%. The sub-heading of an earlier version of this article misstated the year as 2005. (April 13, 2016) Credit: By Bradley Olson and Sarah Kent
Subject: Executive compensation; Petroleum industry; Chief executive officers; Prices; Wages & salaries; Energy industry
People: van Beurden, Ben Tillerson, Rex W
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Royal London Asset Management; NAICS: 523930; Name: University of Southern California; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780749481
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780749481?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Edge Lower; All Eyes on OPEC Meeting; Brent June contract lower at $42.73 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
Crude oil prices lost ground in Asia morning trade Tuesday as traders took profit following the overnight surge, underscoring the growing mixed views that key oil producers could agree on a production freeze this Sunday.
Full text: Crude oil prices lost ground in Asia morning trade Tuesday as traders took profit following the overnight surge, underscoring the growing mixed views that key oil producers could agree on a production freeze this Sunday. The U.S. oil benchmark settled above $40 a barrel for the first time in three weeks and the global Brent benchmark touched a four-month high Monday, thanks to a weaker dollar and higher anticipation that major oil players, such as Russia and Saudi Arabia, would reach a coordinated production freeze to revive prices. In early Asia day, although U.S. oil held on by staying above the $40 mark, it lost 10 cents at $40.26 0211 GMT on the New York Mercantile Exchange in the Globex electronic session, while the Brent June contract was 10 cents, or 0.23%, lower at $42.73 a barrel on the ICE Futures Europe exchange. "Expectations for something to be done in the upcoming Doha talks is likely mounting, given that no news of a cancellation has been made and it remains to be ground knowledge that higher oil prices through the Doha talks would primarily benefit the oil producers and alleviate fiscal concerns," said Barnabas Gan, an economist at the Singapore-based OCBC. For nearly two months, oil prices have been volatile as the market tried to gauge the likelihood of a concerted effort by the oil majors to tighten supply. The initial mention of a meeting back in February stoked a buying spree but prices dove when Saudi Arabia, one of the original initiators of the pact, later showed reluctance to participate in the agreement unless Iran pledges to do the same. However, Tehran has repeatedly showed zero interest in a production freeze at the current level, saying it would keep pumping until productions reaches the pre-sanction level of around 4 million barrels a day. Goldman Sachs forecasts the Sunday meeting won't yield any "bullish surprise" and said arresting output at the current level could be "self-defeating" because any moves to push prices up would entice more producers to turn the taps wider, introducing more barrels into the market. "We find ourselves more persuaded by the broader market arithmetic that recognizes that freezing output at a high level leaves a surplus in place, with rising Iranian output still likely to dictate a further increase in total OPEC supply to 33 million barrels a day, with the global market remaining in surplus until the second half of 2017 as a result," said Tim Evans, an analyst at Citi Futures. Analysts at Societe Generale estimate a 50% probability that the meeting would result in a general production freeze. "A freeze excluding Iran is all about market psychology. It will have little to no impact on real crude production. However, the impact of market psychology could still be quite large," said in an analysts note. For this week, market watchers will be taking cues from the weekly U.S. crude inventories and production data scheduled for release on Wednesday. In a survey of analysts conducted by pricing agency Platts, U.S. crude stockpiles likely added 1 million barrels in the week ended April 8, driven by stronger imports due to stronger refining margin and sagging U.S. crude output. U.S. gasoline stocks is expected to have contracted by 1.9 million barrels in the same period. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--fell 80 points to $1.4997 a gallon, while May diesel traded at $1.2130, 17 points lower. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Petroleum industry; Crude oil prices; Crude oil
Location: Russia United States--US Asia Saudi Arabia
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: Societe Generale; NAICS: 522110, 522120, 523110, 523120; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780022376
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780022376?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Energy Shares Supply Juice for a Stock Rally; Crude-oil prices jump 4.5% on hopes that major producers will reach a deal to freeze production levels
Author: Gold, Riva; Josephs, Leslie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract: None available.
Full text: Stocks rose as surging oil prices sparked a rally in energy shares. U.S. crude-oil prices jumped 4.5% on expectations that major producers would reach a deal to freeze production levels at a meeting Sunday , giving investors hope that the pressure on commodity-linked companies could ease after a long rout. Today's Highlights * Banks Face Massive New Headache on Oil Loans * J.P. Morgan May Cut the Cord for Traders * Investors Stockpile Cash, in Warning Sign on Stocks The energy sector was by far the best performer Tuesday in the S&P 500, rising 2.8%, its largest gain since Feb. 17. Chevron led the Dow industrials, rising $2.27, or 2.4%, to $97.51. "We're in the process of turning a corner," said Jim Margard, senior portfolio manager at Rainier Investment Management, which has about $3 billion in assets under management. Mr. Margard said he has been buying shares of energy companies this week. Crude for May delivery gained $1.81, to $42.17 a barrel on the New York Mercantile Exchange, its highest settlement price since Nov. 25. The financial sector was the second-best performer in the S&P 500, rising 1.3%. Investors have been concerned about banks' loans to the energy sector as oil prices have languished near multiyear lows. The Dow Jones Industrial Average notched its largest one-day point and percentage gain since March 11, rising 164.84 points, or 0.9%, to 17721.25. The S&P 500 rose 19.73 points, or 1%, to 2061.72, while the Nasdaq Composite Index added 38.69 points, or 0.8%, to 4872.09. All 30 Dow components rose for the first time since Feb. 25 and every sector in the S&P gained. "That does suggest overall that it's broader investor optimism than just the rebound in oil," said Kate Warne, investment strategist at Edward Jones. Despite the recent stock-market rebound, the S&P 500 has closed in positive territory only 12 times in 69 sessions in 2016, bringing its year-to-date gain to 0.9%. Companies' outlooks for the rest of the year will be in focus for many investors during the earnings season. "After a weak first quarter, I don't expect much surprisingly positive forward guidance," said Tony Roth, chief investment officer at Wilmington Trust. "We expect to see companies beat on the bottom line, but the top line won't look good." Haven assets such as U.S. government debt and gold are still up this year, as many investors have remained cautious about a rally in stocks and energy prices since mid-February. Investors "aren't fully committed to the rally," said Ernesto Ramos, head of equities at BMO Global Asset Management. Gold for April delivery gained 0.2%, to settle at $1,259.40 a troy ounce. Treasury prices fell, pushing the yield on the 10-year note to 1.781%, compared with 1.724% Monday, as yields move inversely to prices. In addition to weak expected earnings, investors are also grappling with meager global growth. The International Monetary Fund on Tuesday warned that the world economy is increasingly at risk of stalling and again cut its forecast for global growth. The Stoxx Europe 600 rose 0.5%. Japan's Nikkei Stock Average gained 1.1%, as the yen weakened against the dollar, boosting shares of exporters. The dollar rose to ¥108.54, from ¥107.94 on Monday, after the Japanese finance minister warned against excessive yen strength. The Japanese currency had risen against the dollar for seven consecutive sessions. In the Markets * Oil Rises on Hopes for Output Freeze * Dollar Strengthens Against Yen * Weaker Yen Buoys Japan Stocks * Oil Rally Sparks a Selloff in Government Bonds * Gold Prices Rise as Commodities Gain Corrections & Amplifications: Chevron shares rose 2.3% to $97.38 in afternoon intraday trading. An earlier version of this article misstated their performance. Also, earlier versions of this article omitted a first reference for Mark Harris, head of multiasset at City Financial.(April 12) Write to Leslie Josephs at leslie.josephs@wsj.com and Riva Gold at riva.gold@wsj.com Credit: By Riva Gold and Leslie Josephs
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780099451
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780099451?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Banks Face New Headache on Oil Loans; Banks start announcing earnings on Wednesday, and a big focus will be on little-known but massive unfunded loans
Author: Ensign, Rachel Louise
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
The $147 billion in unfunded loans have been disclosed by 10 of the largest U.S. banks, according to fourth-quarter data from Barclays PLC. The four largest U.S. banks--J.P. Morgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co.--pledged the majority of this amount.
Full text: The $147 billion question for banks: Will energy companies max out their credit lines? When big banks announce earnings starting Wednesday , the spotlight will be on vast energy loans that most investors didn't know much about until recently. These unfunded loans have been promised to energy companies, which haven't yet tapped the money. Many banks historically haven't disclosed these loans, but began doing so recently following the extended slide in prices for oil and gas. Related * What to Watch for in Bank Earnings * Bank Earnings: Where to Look for Silver Linings * Miserable Year for Banks: Stocks Suffer as Rates Stay Low In the first quarter, a handful of energy borrowers announced more than $3 billion of drawdowns against these types of loans. Those commitments are expected to trickle down to bank earnings and saddle firms with more energy exposure just as they are trying to pare it back. "Let's not sugarcoat it. This is not necessarily a loan a bank wants to make at this point," said Glenn Schorr, a bank analyst at Evercore ISI. Oil prices have risen in recent weeks , with the U.S. benchmark settling at $42.17 a barrel on Tuesday, but analysts say the unfunded loans to the sector still are a headache for banks at that price. Banks in recent months have set aside billions of dollars to cover potential losses tied to energy companies, a trend likely to continue as more loans go bad. Fitch Ratings Inc. released a report Tuesday that said that nearly 60% of unrated and below-investment-grade energy companies are likely to have loans labeled as "classified," or in danger of default under regulatory guidelines. "It's grim," said Sharon Bonelli, senior director of leveraged finance at Fitch. Banks often use a company's proven energy reserves as collateral for loans and typically reset the value of these reserves twice a year, usually in spring and fall. The draws made so far were done ahead of the spring redetermination process, in which banks are expected to cut the credit lines of energy firms by an average of more than 30%, according to a survey from law firm Haynes & Boone LLP. Ms. Bonelli and other analysts say bank loans are increasingly vital lifelines for energy companies, because other funding sources have dried up. The $147 billion in unfunded loans have been disclosed by 10 of the largest U.S. banks, according to fourth-quarter data from Barclays PLC. The four largest U.S. banks--J.P. Morgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co.--pledged the majority of this amount. Smaller U.S. lenders and large international banks have made billions more of these loans. "With oil at $60, it's not that big of a deal. With oil at $40, it becomes more of a source of concern," Barclays analyst Jason Goldberg said of the unfunded loans. "Will companies draw down in difficult times?" Lenders routinely offer these commercial lines of credit to industrial companies. But the energy loans, often promised before prices started their steep decline, face a unique set of pressures. James Dimon, J.P. Morgan's chief executive, said in February that the unfunded loans are "the most unpredictable part of our assumptions" about the bank's energy exposure. Mr. Dimon also said he isn't expecting a large percentage of the unfunded money to get drawn because most of those promised loans went to investment-grade companies that he thinks are unlikely to need access to additional cash. Banks hold reserves against unfunded loans in addition to reserves for loans that have been taken out. A mounting number of troubled energy firms have tapped their unfunded loans. Denver-based oil-and-gas firm Bonanza Creek Energy Inc., for instance, said in March that it drew $209 million from its credit facility from a group of banks led by Cleveland-based KeyCorp. Bonanza Creek's chief executive said in a news release that the move was "a risk-management decision" and praised its "committed and supportive commercial bank syndicate." A KeyCorp spokesman declined to comment. Tidewater Inc., which provides vessels to the offshore drilling industry, said in March it took out the maximum $600 million from its credit facility led by Bank of America. The firm's chief executive cited "the uncertainty surrounding the future direction in oil and gas prices," in a news release announcing the withdrawal. A Bank of America spokesman declined to comment. To stem such withdrawals, some banks have negotiated what are known as anti-cash-hoarding provisions when energy firms have asked for amendments to their loans in recent months. These clauses require the companies to use extra cash to repay the balance on their credit lines in exchange, according to regulatory filings. But for distressed firms facing bankruptcy that can contractually do so, "you'd seriously have to consider a game plan to draw down," said Ian Peck, head of the bankruptcy practice at Haynes & Boone. Write to Rachel Louise Ensign at rachel.ensign@wsj.com Credit: By Rachel Louise Ensign
Subject: Bank earnings; Trends; Banking industry; Prices; Loans; Bank reserves; Energy industry
Location: United States--US
Company / organization: Name: Barclays PLC; NAICS: 522110, 523110, 551111; Name: Haynes & Boone; NAICS: 541110; Name: Fitch Inc; NAICS: 523930; Name: Bank of America Corp; NAICS: 522110, 551111; Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780116414
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780116414?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Crude Up But Investors Cautious Ahead of Doha Talks; Analyst sees oil surplus continuing after key oil talks between major producers next week
Author: Kantchev, Georgi; Hsu, Jenny W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
On Tuesday, Igor Sechin, the head of Russia's state oil company Rosneft, said that the current downturn in oil prices won't last for a protracted period.
Full text: LONDON--Oil prices rose in volatile trade on Tuesday after the dollar slumped but doubts over whether major producers can agree on curbing their output are keeping the market on edge. Brent crude, the global oil benchmark, rose 1.7% to $43.54 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 1.3% at $40.88 a barrel. The U.S. oil benchmark settled above $40 a barrel for the first time in three weeks on Monday while Brent touched a four-month high. "Dollar weakness and a generally positive sentiment toward commodities took oil prices higher," said analysts at PVM brokerage. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, fell 0.25% on Monday. As oil is priced in dollars, it becomes more attractive for holders of other currencies as the greenback depreciates. Meanwhile, investors are bracing for key oil talks between major producers, including Saudi Arabia and Russia. The producers, meeting in Doha, Qatar, on April 17, will discuss a deal to freeze their supply at January or February levels in a bid to boost prices. However, Iran has repeatedly balked at participating in any freeze deal, saying it would keep pumping until production reaches the pre-sanction level of around 4 million barrels a day. "We find ourselves more persuaded by the broader market arithmetic that recognizes that freezing output at a high level leaves a surplus in place," said Tim Evans, an analyst at Citi Futures. "Rising Iranian output [is] still likely to dictate a further increase in total OPEC supply to 33 million barrels a day, with the global market remaining in surplus until the second half of 2017 as a result." On Tuesday, Igor Sechin, the head of Russia's state oil company Rosneft, said that the current downturn in oil prices won't last for a protracted period. "It is inevitable the market will become stable," Mr. Sechin told the FT Commodities Global Summit in Lausanne, adding that he doesn't believe the current price slump will "be prolonged or last very long." Market watchers will be taking cues from the weekly U.S. oil inventories data. The American Petroleum Institute, an industry group, will publish its estimate later on Tuesday, while the official data by the Energy Information Administration will follow Wednesday. Last Wednesday, the EIA reported that U.S. crude-oil supplies fell by 4.9 million barrels in the previous week against market expectations of an increase. Nymex reformulated gasoline blendstock--the benchmark gasoline contract--up 0.6% to $1.52 a gallon. ICE gasoil changed hands at $367.75 a metric ton, up $1.52 from the previous settlement. Miriam Malek and Sarah Kent in Lausanne contributed to this article Write to Georgi Kantchev at georgi.kantchev@wsj.com and Jenny W. Hsu at jenny.hsu@wsj.com Credit: By Georgi Kantchev and Jenny W. Hsu
Subject: Petroleum industry; Futures; Price increases
Location: Russia United States--US
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: OAO Rosneft; NAICS: 324110; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Econ omics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780116779
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780116779?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Copper Prices Rise With U.S. Oil; Metal benefits from boost in oil prices and improved sentiment around China's economy
Author: Yang, Stephanie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
Copper prices have suffered over the past year as investors worry over China's economy and slowing demand for the industrial metal, despite several rounds of stimulus from the country's central bank.
Full text: Copper prices settled higher Tuesday, bolstered by a jump in crude oil and new data out of China. Copper for May delivery closed up 2.7% to $2.1470 a pound on the Comex division of the New York Mercantile Exchange. U.S. oil was recently up 3.9% to $41.92 a barrel, amid reports that Saudi Arabia and Russia have reached an agreement on a production freeze. Fluctuations in the price of oil tend to affect copper, because many funds trade the two commodities in one basket, with a larger share allocated to oil. Copper prices also benefited from improved sentiment around China's economy, including reports of increased car sales in March and some increasingly positive analyst expectations for the country's GDP, scheduled to be released this month. The fear of a hard landing in China has tempered recently, said Bill O'Neill, a broker at LOGIC Advisors. But despite Tuesday's move higher, Mr. O'Neill said copper prices will likely remain under considerable pressure. "I think it's very questionable whether this will be anything significant to the upside, given the current situation," he said. China is the world's largest copper consumer, accounting for 45% of demand. Copper prices have suffered over the past year as investors worry over China's economy and slowing demand for the industrial metal, despite several rounds of stimulus from the country's central bank. Write to Stephanie Yang at Stephanie.Yang@wsj.com Credit: By Stephanie Yang
Subject: Copper industry; International finance; Prices
Location: United States--US China Russia Saudi Arabia
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780121028
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780121028?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Rises to Highest Level Since November on Hopes for Output Freeze; Major producers to meet Sunday in Qatar, though some doubt any real impact
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
"The best thing that can come out of it is at least they're talking," said Scott Sheffield, chief executive of U.S. shale-oil producer Pioneer Natural Resources Co. Expectations of declining U.S. oil supply also boosted prices. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 6.2-million-barrel increase in crude supplies, a 1.6-million-barrel decrease in gasoline stocks and a 530,000-barrel decrease in distillate inventories, according to market participants.
Full text: NEW YORK--Oil prices rose to the highest level of the year Tuesday on increased expectations that major oil producers will agree to freeze output at a meeting coming on Sunday. The global oil market remains oversupplied more than a year and a half after prices started plunging in mid-2014. While production has started to fall in some regions due to cuts in spending, especially in U.S. shale-oil regions, global output continues to outpace demand. Traders are waiting on a Sunday meeting of major producers in Doha, Qatar, to discuss freezing production. Some investors see this as a prelude to an output cut later in the year, while others say that freezing production at levels that are already high will do little to alleviate the global glut of crude. News reports from Russia in support of the deal boosted prices Tuesday. But questions remain whether the participating countries can reach an agreement. Iran has balked at joining any freeze deal, saying it would keep pumping until production reaches the level it was at before sanctions were put in place, a level of around four million barrels a day. "The fact that Russia's at the table now is really quite key here, because it's a big change in rhetoric from last year," said Michael Tran, director of energy strategy at RBC Capital Markets. For oil prices, he said, "I do think the lows of the year are in." More * Investors on Edge Ahead of Production Talks * The Real Reason Crude Glut Will Ease * Energy Traders Call Bottom of Slump * Copper Slide: Bad Tidings for Oil? Light, sweet crude for May delivery settled up $1.81, or 4.5%, to $42.17 a barrel on the New York Mercantile Exchange on Tuesday, the highest settlement since November. The U.S. oil benchmark settled above its 200-day moving average for the first time since 2014, when prices were above $100 a barrel. That is a key bullish signal for traders who rely on chart-based strategies, analysts say. Brent, the global benchmark, rose $1.86, or 4.3%, to $44.69 a barrel on ICE Futures Europe, also the highest level since November. Glencore PLC's oil chief, Alex Beard, speaking at a conference in Switzerland, was dismissive of the idea that the coming meeting would have much effect on the market. "Even if you come up with some sort of political agreement for a freeze, it doesn't actually change the dynamics of the oil markets today," Mr. Beard said. "I think there is a chance of disappointment and I can't see a huge positive surprise." Other market participants were more optimistic. "The best thing that can come out of it is at least they're talking," said Scott Sheffield, chief executive of U.S. shale-oil producer Pioneer Natural Resources Co. Expectations of declining U.S. oil supply also boosted prices. The U.S. Energy Information Administration said in its short-term energy outlook Tuesday that U.S. crude production fell by 90,000 barrels a day in March from February. The agency lowered its U.S. output forecasts for 2016 and 2017. "It really doesn't matter what OPEC does. Supply is going to come down because of a drop in U.S. production," said Roland Morris, commodities strategist at VanEck, which manages $24.7 billion in assets. "U.S. production won't stop falling unless we get prices around $45 or $50, and at that point it will only stabilize." U.S. crude production has dropped from a multidecade peak of 9.7 million barrels a day in April 2015 to 9 million barrels a day last month, the EIA said. The agency is due to release a production estimate for last week's output on Wednesday. The weekly number could fall below 9 million barrels a day for the first time since 2014. The weekly report will also include closely watched inventory data. U.S. crude inventories are near a record high, which has weighed on prices. Analysts surveyed by The Wall Street Journal expect the EIA to report that crude stockpiles rose by 1.8 million barrels last week, while gasoline supplies fell. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 6.2-million-barrel increase in crude supplies, a 1.6-million-barrel decrease in gasoline stocks and a 530,000-barrel decrease in distillate inventories, according to market participants. Oil demand growth was strong in 2015 due to low oil prices, but analysts are divided on their expectations for demand growth this year. On Tuesday, the International Monetary Fund cut its 2016 global growth forecast by 0.2 percentage point to 3.2%, the fourth straight downward revision in a year. The International Energy Agency often cites the IMF's growth forecasts in its oil demand outlooks. The IEA's monthly supply-and-demand outlook is set to be released Thursday. Gasoline futures settled up 2.66 cents Tuesday, or 1.8%, at $1.5343 a gallon, the highest settlement since August 2015. Diesel futures rose 6.12 cents, or 5%, to $1.2759 a gallon, the highest since December. --Timothy Puko, Sarah Kent and Miriam Malek contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Crude oil prices; Crude oil; Supply & demand
Location: United States--US Russia
Company / organization: Name: Glencore PLC; NAICS: 211111, 212210, 212234, 311314; Name: New York Mercantile Exchange; NAICS: 523210; Name: RBC Capital Markets; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780134812
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780134812?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Benchmark Settles Above $40
Author: Berthelsen, Christian; Baxter, Kevin; Hsu, Jenny W
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Apr 2016: C.4.
Abstract:
Oil prices have surged more than 14% in the last week, including Friday's 6% gain, as U.S. Energy Department data last week showed a surprise decline in U.S. supplies, prompting bearish speculative traders to close out short sales against the market.
Full text: The U.S. oil benchmark settled above $40 a barrel for the first time in nearly three weeks, and the global Brent contract touched a four-month high Monday, as the dollar faded and hopes rose for a coming agreement among sovereign producers that would begin to reduce the global crude glut. Both major contracts rose for the second trading session in a row, after surging more than 6% Friday. The U.S. benchmark ended 1.6% higher at $40.36 a barrel on the New York Mercantile Exchange, while the Brent contract rose 2.1% to 42.83 a barrel on the ICE Futures Europe exchange. Analysts said there appeared to be little direct reason for the gains Monday and said it was likely a combination of a softening dollar, hopes that U.S. oil production and inventory data this week would extend declines last week and that Sunday's meeting of producers in Doha, Qatar, would yield an agreement to freeze output levels. A softening dollar can drive oil higher as it becomes cheaper for traders using foreign currencies. Oil prices have surged more than 14% in the last week, including Friday's 6% gain, as U.S. Energy Department data last week showed a surprise decline in U.S. supplies, prompting bearish speculative traders to close out short sales against the market. And the agency's estimate of domestic oil production was just barely above 9 million barrels a day, stoking hopes that it would fall under that threshold in this week's report. Meanwhile, investors are becoming increasingly optimistic that Sunday's meeting in Qatar among major sovereign oil producers will yield results. The meeting will include members and nonmembers of the Organization of the Petroleum Exporting Countries, which may agree to freeze production at January or February levels. "It does appear some people are willing to roll the dice on the possibility there's some kind of agreement at Doha," said Robert Yawger, director of the futures division at Mizuho Securities USA. Yet that has largely been at odds with the view of analysts and strategists, who think that even if an agreement is reached it will do little to curb the world's growing crude glut. Indeed, Iraq said Sunday that it boosted production to a record 4.55 million barrels a day in March. Credit: By Christian Berthelsen, Kevin Baxter and Jenny W. Hsu
Subject: Commodity prices; Crude oil
Location: United States--US
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Apr 12, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780137141
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780137141?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Import Prices Rose 0.2% Amid Signs of Inflation; First rise in nine months fueled by a rebound in oil prices
Author: Torry, Harriet
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
Related * Economists Trim Estimates for Growth, Jobs After Early-2016 Turmoil * Government Spending Cuts Escalate Clashes Over Monetary Policy * Five Things to Watch on the Economic Calendar The monthly increase largely reflected a rebound in oil prices.
Full text: WASHINGTON--Prices for imported goods rose for the first time in nine months in March, a sign that a rebound in oil prices is slowly pushing up inflation pressures in the U.S. Import prices increased 0.2% in March from the prior month after falling a revised 0.4% in February, the Labor Department said Tuesday. The increase marked the first time prices posted a monthly gain since last June, however the pace of growth fell short of expectations. Economists surveyed by The Wall Street Journal had expected import prices to increase 0.9% from February to March. Related * Economists Trim Estimates for Growth, Jobs After Early-2016 Turmoil * Government Spending Cuts Escalate Clashes Over Monetary Policy * Five Things to Watch on the Economic Calendar The monthly increase largely reflected a rebound in oil prices. Petroleum import prices rose 6.5% from February. The price of crude tanked in February, but rebounded last month on hopes that declines in oil drilling around the world and an output deal among major producers would shrink the global glut of crude. Despite last month's rise, import prices are still weak historically, and posted a decline of 6.2% in the year to March. Outside of petroleum, import prices broadly declined. Prices for non-petroleum imports decreased 0.2% in March from the prior month and were down 2.7% on the year. Excluding the volatile fuel and food categories, import prices fell 0.1% from February, and are down 2.3% from March 2015. The continuing weakness in import prices-for items ranging from capital goods to coffee-reflects the persistent drag from weak global growth, a strong dollar and cheap oil. Some categories posted gains however: import prices for industrial supplies and materials increased 1.8% on the month, the first monthly advance since June 2015. Prices for imported automotive vehicles ticked 0.1% higher, the first monthly increase since last July. Alongside a strong dollar, weak global oil prices since mid-2014 have been a major curb on U.S. inflation. Imported petroleum prices are still 39.5% lower from a year ago. U.S. export prices were flat in March after falling 0.5% in February. Export prices are down 6.1% year-over-year. The dollar weakened in the first quarter as the Federal Reserve indicated a slower-than-expected pace of interest rate increases , but it remains strong historically, which effectively makes U.S. exports more expensive while making imports cheaper. Joshua Shapiro, chief economist at MFR, Inc., said in a note to clients Tuesday that downward influence of the dollar is fading and "core import prices are likely to move toward stability on a year over year basis in the months ahead." Federal Reserve officials are closely watching inflation measures as they consider whether the economy is strong enough to withstand higher borrowing costs. The Fed raised short-term interest rates in December for the first time in nearly a decade, but held them steady at their subsequent meetings in January and March. Minutes from the Fed's March meeting showed some officials were prepared to rule out a rate increase at their next meeting later this month. Federal Reserve Bank of Philadelphia President Patrick Harker said Tuesday it may be prudent for Fed officials to wait for more evidence of firming inflation before they raise short-term interest rates again. "It might prove prudent to wait until the inflation data are stronger before we undertake a second rate hike," he said in Philadelphia. Write to Harriet Torry at harriet.torry@wsj.com Credit: By Harriet Torry
Subject: Interest rates; Inflation; Central banks; Federal Reserve monetary policy; US exports
Location: United States--US
Company / organization: Name: MFR Inc; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780148459
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780148459?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journa l
Global Oil Markets Have Hit Bottom, Senior Oil Traders Say; Chiefs of some of the world's biggest energy merchants said the era of low oil prices has passed as the market moves into a price-recovery period.
Author: Malek, Miriam; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
LAUSANNE--Global oil markets have hit bottom, according to a host of the world's most senior oil traders.
Full text: LAUSANNE--Global oil markets have hit bottom, according to a host of the world's most senior oil traders. The chief executives of some of the world's biggest energy merchants said Tuesday that the era of low oil prices has passed, with the market moving into what is the beginning of a price-recovery period. But Torbjorn Tornqvist, chief executive of Gunvor Group, said the price recovery wouldn't be as fast as the market expects, with several factors such as slowing business in refineries likely to affect prices this year. In the future, a level of around $60-$70 a barrel would be sufficient to secure oil flow, he said during a panel discussion at the Financial Times Commodities Summit in Lausanne, Switzerland. "We're going to have a lot of volatility going forward, but from here on the trend is up," Mr. Tornqvist said. Prices will begin to rebalance by the end of the third quarter or in the fourth quarter of this year, according to Jeremy Weir, Trafigura's chief executive. "We've seen the bottom unless some catastrophic situation occurs," Mr. Weir said. Further ahead, Marco Dunand, chief executive of Mercuria Energy Group Ltd., said the market should expect a price of above $50 a barrel in 2017. Glencore PLC's (GLEN.LN) oil chief, Alex Beard, was more equivocal. Though the consensus is that oil stocks will stop building in the third quarter, it will likely take time for prices to rebound, Mr. Beard said. Credit: By Miriam Malek and Sarah Kent
Subject: Executives; Petroleum industry; Prices
Location: Switzerland
People: Dunand, Marco
Company / organization: Name: Mercuria Energy Group Ltd; NAICS: 483111, 493190; Name: Glencore PLC; NAICS: 211111, 212210, 212234, 311314
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Busin ess And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780148889
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780148889?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Gazprom Agrees to Link Price of Gas Sold to Engie to Gas Market,Not Oil Market; French power utility Engie said main supplier Gazprom agreed to link the price of gas sold to Engie to the international gas price instead of the oil price.
Author: Landauro, Into
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
The company said it agreed with Gazprom to tie the price of long-term gas contracts to gas market conditions in a bid to reduce the volatility of the price it pays for its natural gas, as gas prices are less volatile than oil prices.
Full text: PARIS--French power utility Engie SA (ENGI.FR) said one of its main gas suppliers, Russia's Gazprom, has agreed to link the price of gas sold to Engie to the international gas price instead of the oil price. The company said it agreed with Gazprom to tie the price of long-term gas contracts to gas market conditions in a bid to reduce the volatility of the price it pays for its natural gas, as gas prices are less volatile than oil prices. A spokesman for the company said the price of gas bought from Gazprom will be tied to the international price of gas, instead of the international price of oil. He declined to say whether the agreement will make Engie's gas supply cheaper or more expensive at first. In the past, Engie, formerly known as GDF Suez, has said it wanted to tie its gas contracts to the gas market and not to the oil market. Engie declined to specify how much gas it has agreed to buy from Gazprom though it said gas supply contracts with Gazprom will represent around 22% of all Engie's long-term gas supply in Europe in 2016. The deal with Gazprom is part of a Engie's strategy to reduce its exposure to the fluctuations of energy spot prices that have made part of its business of selling energy unprofitable over the past few years as a result of adverse market conditions in Western Europe. Credit: By Into Landauro
Subject: Natural gas; Petroleum industry; Price increases
Location: Russia Western Europe
Company / organization: Name: OAO Gazprom; NAICS: 211111, 221210; Name: GDF Suez; NAICS: 221112, 221122
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780148924
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780148924?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Traders Call Bottom of Oil Price Slump; The prediction for crude markets comes as oil prices start to recover from lows hit earlier this year
Author: Kent, Sarah; Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
LAUSANNE--Global oil markets have hit the bottom of the barrel, according to a host of the world's most senior oil traders.
Full text: LAUSANNE--Global oil markets have hit the bottom of the barrel, according to a host of the world's most senior oil traders. The chief executives of some of the world's biggest energy merchants said Tuesday that the end is in sight for a near two-year slump in crude prices that has hammered energy companies' earnings and sent shock waves through the global financial system. "We're going to have a lot of volatility going forward, but from here on, the trend is up," Swiss trading house Gunvor Group's CEO Torbjorn Tornqvist told the FT Commodities Global Summit in Lausanne, predicting a slow recovery to around $60 to $70 a barrel. Mr. Tornqvist's view was echoed broadly by a number of his peers, though opinions on exactly when and how fast prices might recover were more varied. Oil traders make their money moving cargoes of crude and refined products around the world, benefiting from price discrepancies at different times and in different places. Their business relies on intimate knowledge of global supply-and-demand balances that gives them a deep insight into market trends. Related Articles * Oil Prices Up in Volatile Trade (April 12) * Oil Prices Soar 12.3% on Hopes of Production Cuts (Feb. 12) * Oil Prices Tumble Below $30 a Barrel (Jan. 15) "We've seen the bottom unless some catastrophic situation occurs," Jeremy Weir, the head of Trafigura Group Pte. Ltd. said, predicting that the market would begin to rebalance in the third of fourth quarter of the year. Marco Dunand, chief executive of Swiss trading house Mercuria Energy Group, said he expected prices at $50 a barrel or higher next year. Glencore PLC's oil chief Alex Beard was possibly the most cautious on the prospect for a rebound in oil prices, warning that the market would have to drain a huge stockpile of crude before prices move back up. A return to market stability could cap a highly profitable period for oil traders--one of the few parts of the energy industry that have benefited from the price slump . Traders thrive on volatility and strong refining margins, and a market structure known as contango--when spot prices are lower than prices in the future--also created favorable trading conditions in the past year. Gunvor Group reported record profits for 2015, while Trafigura enjoyed its strongest trading year on record. Though Glencore reported a large annual loss, mostly owed to its mine holdings, earnings before interest, taxes, depreciation and amortization in its energy market division rose nearly 50% in 2015 to $826 million. As oil markets come back into balance though, those dynamics might begin to change. The circumstances for trading houses generally were very favorable, Gunvor's Mr. Tornqvist said. "But I'm not so sure it will be as easy this year as last year. There are some signs we will have to work a bit harder." The call on crude markets comes with oil prices up off lows hit earlier this year ahead of a meeting of major oil producers to discuss a possible output freeze. Oil-rich countries, including Saudi Arabia and Russia, are set to meet to negotiate a deal in an effort to boost prices. Still, Glencore's Mr. Beard was dismissive of the prospect that this meeting would have much affect on the market. "Even if you come up with some sort of political agreement for a freeze, it doesn't actually change the dynamics of the oil markets today," Mr. Beard said. "I think there is a chance of disappointment and I can't see a huge positive surprise." Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent and Miriam Malek
Subject: Petroleum industry; Volatility; Crude oil prices; Energy industry
People: Dunand, Marco
Company / organization: Name: Glencore PLC; NAICS: 211111, 212210, 212234, 311314
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780148970
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780148970?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited wit hout permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Investors on Edge Ahead of Oil Producers' Doha Meeting; Whatever the outcome, investors expect a big market reaction
Author: Kantchev, Georgi; Baxter, Kevin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract: None available.
Full text: Investors are bracing this week for a meeting of the world's largest oil producers that could make or break crude's recent price rally. On April 17, oil heavyweights including Saudi Arabia and Russia will meet to talk about a production freeze that investors hope will curb the oversupply that has pressured the oil price for almost two years. To reach an agreement, these countries have to negotiate the complexities of Middle East politics while hoping that producers not at the table, from the U.S. to Norway, don't take advantage and ramp up their production. Underscoring the uncertainty, analysts haven't reached a consensus on what will happen in Doha. Whatever the outcome, investors expect a big market reaction, with oil moving by as much as $5 in either direction. More * Traders Call Bottom of Oil Price Slump * Crude Futures Hover as Output Talks Loom "It's 50-50 they are going to get it done," said Michael Wittner, chief oil analyst at Société Générale SA "If they do, prices could quickly jump by up to $5--but also fall by as much if the negotiations break down." On Tuesday, Brent, the global oil benchmark, was trading up 1.1% at $43.29 a barrel. West Texas Intermediate, the U.S. price gauge, was up 0.7% at $40.63 a barrel. Hopes of an agreement have influenced the market since Saudi Arabia, Russia, Venezuela and Qatar said on Feb. 16 they would freeze oil production at January levels if other producers joined in. Some, such as Kuwait and the United Arab Emirates, did express support for the deal. That lifted prices by around 30% over the following weeks. But the rally then stalled as Saudi Arabia indicated that it would only agree to curb production if still more producers followed suit. That may be hard. Shortly after the February meeting, Iran's oil minister called the plan "a joke," denting market optimism about the deal. Iran had only recently returned to international oil markets after sanctions were lifted in January, and the country wants to regain lost market share. "It would be suicide for politicians in Tehran to capitulate to Saudi Arabia and freeze output," said Saadallah al-Fathi, a U.A.E.-based consultant and former official at the Organization of the Petroleum Exporting Countries. "How can Saudi Arabia seriously ramp up to over 10 million barrels a day, say it is going to freeze and then expect Iran to comply with that?" Saudi Arabia raised its oil output above 10 million barrels a day last year in a bid to gain market share. Iran, currently pumping around 3.1 million barrels a day, plans to raise its output to 4 million barrels a day. Negotiations have hit other obstacles that have added market volatility, including uncertainty over whether OPEC members Iraq and Libya will participate. Meanwhile, some analysts question the effectiveness of a freeze at current high levels. Russian oil output, for instance, has chalked up several post-Soviet records in recent months. But as oil ministers sit down in Doha, they will be thinking about those countries not present. If a deal is reached, global output could still rise as other big producers, from the U.S. to Canada and Norway, man the pumps, analysts say. The U.S. alone produces close to 10% of global crude. "It is nearly impossible to reach an agreement--if you limit your output, someone else will take your place on the market," said Fereidun Fesharaki, chairman of energy consultancy FGE. That is the market's conundrum. An agreement could extend the recent rally and encourage new supply from nimble U.S. shale drillers, which would put pressure back on the oil price. "Any resolute agreement that would support prices from current levels would prove self-defeating," Goldman Sachs said in a report Monday. The bank sees greater odds that the Doha meeting delivers a bearish catalyst for oil prices and predicts $35 a barrel in the second quarter. Not all market players are downbeat. Some expect the oil price to gain, given that cheap oil has already led to massive cuts in exploration budgets. That will lead to shrinking supply down the road--regardless of whether delegates in Doha clinch an agreement. "We're going to have a lot of volatility going forward, but from here on, the trend is up," Torbjorn Tornqvist, the chief executive of Swiss trading house Gunvor Group told an industry conference on Tuesday. He is predicting a slow recovery to around $60 to $70 a barrel. Other heads of trading houses were equally upbeat at the Swiss conference, with Jeremy Weir, the CEO head of Trafigura Group Pte. Ltd., predicting that the market would begin to rebalance in the third of fourth quarter of the year. Some say the very fact that producers inside and outside of OPEC are meeting is a positive sign. "They are making the right noises this time," said Doug King, chief investment officer at RCMA Asset Management and manager of that firm's $240 million Merchant Commodity hedge fund. Hedge funds and other money managers have grown more bullish about oil since a planned freeze was announced and as worries about the global economy have receded. The number of long positions in Brent--bets that prices will rise--increased to a record 409 million barrels last week, data from the Intercontinental Exchange Inc. showed Monday. But most investors are predicting uncertainty in the coming weeks, particularly given the potential that Doha's attendees will kick the can down the road and say an agreement could come later. "If they come out harmonious, that's another egg in the basket of those saying that the market is healing. If it falls apart, oil can quickly fall to $35," said Mr. King, whose hedge fund is neutrally positioned ahead of the Doha talks. "We are in a wait-and-see mode." Write to Georgi Kantchev at georgi.kantchev@wsj.com and Kevin Baxter at Kevin.Baxter@wsj.com Credit: By Georgi Kantchev and Kevin Baxter
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780149048
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780149048?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil-Trading Firms Remain Cautious on Iran Until All U.S. Sanctions Lifted; Iran's oil production is growing, but more slowly than expected by Tehran
Author: Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract: None available.
Full text: LAUSANNE--The U.S. needs to clarify its position on Iranian sanctions if any progress is to be made in the Islamic Republic's oil sector, according to the chief executives of several major oil trading firms. Speaking at the Financial Times Commodities Summit the chief executives said their companies are continuing to look at Iran with a cautious eye while a lack of clarity over U.S. sanctions persists. Despite the lifting of some major sanctions against Iran, activity with the country has been limited because of a number of existing U.S. sanctions related to charges of terrorism. Oil production is growing , but more slowly than expected by Tehran. "The U.S. has made no effort to facilitate or clarify what's going on so not seeing much movement on transactions," said Torbjörn Törnqvist, chief executive of Gunvor Group. These U.S. sanctions are deterring some banks from dealing with Iran because they cannot clear financial transactions through the dollar-clearing system. "Banks are being cautious and watching to see if there's any progress [in Iran]," said Jeremy Weir, Trafigura's chief executive. "The Iranian situation is complex, and the U.S. elections could change the future of Iran sanctions," according to Marco Durand, chief executive of Mercuria. The trading houses agreed that although opportunities in Iran are promising in the long run, in the short term the speed at which Iran returns to the global oil stage depends on Iran itself. This is partly because an increase in Western technologies to Iran soon after the lifting of sanctions is unlikely, according to Alex Beard, chief executive of Glencore PLC. Politically, Iranians must also decide how closely they would like to align themselves with the West, Mr. Beard said. Credit: By Miriam Malek
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780155937
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780155937?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Kayne Anderson Backs New Oil and Gas Company With $250M Commitment
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
The firm had intended to merge with publicly traded asset manager Ares Management LP; the deal was canceled last year because of differing views between the firms on how to respond to the energy industry downturn. http://www.kaynecapital.com Write to Shasha Dai at asknewswires@wsj.com Credit: By Shasha Dai
Full text: Kayne Anderson Energy Funds made a $250 million equity commitment to Phoenix Natural Resources LLC, a newly formed oil and gas company, according to a news release. Based in Houston, Phoenix will seek to acquire oil and gas assets "throughout select North American basins with an initial focus on the Eagle Ford," the company said in the release. Phoenix is being led by former executives from such companies as Chief Oil & Gas LLC and Hilcorp Energy Co. Executives from Phoenix and Kayne Anderson didn't respond to messages seeking comment. Kayne Anderson Energy Funds are managed by Kayne Anderson Capital Advisors, of Los Angeles. The firm is marketing Kayne Anderson Energy Fund VII LP, which as of December, had raised more than $700 million, LBO Wire previously reported. A predecessor vehicle, Kayne Anderson Energy Fund VI LP, closed in 2012 with $1.6 billion. The funds invest in the oil and gas exploration and production sector as well as the midstream and oil-field services space. In addition to private equity investing in the energy sector, Kayne Anderson also makes real estate and credit investments. The firm had intended to merge with publicly traded asset manager Ares Management LP; the deal was canceled last year because of differing views between the firms on how to respond to the energy industry downturn. http://www.kaynecapital.com Write to Shasha Dai at asknewswires@wsj.com Credit: By Shasha Dai
Subject: Petroleum industry; Energy industry
Location: Los Angeles California
Company / organization: Name: Kayne Anderson Capital Advisors; NAICS: 523930, 523999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780155985
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780155985?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fitch Cuts Saudi Arabia's Credit Rating; Ratings firm downgrades country to AA-minus from AA as low oil prices weigh on outlook
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
Saudi Arabia, one of the world's leading oil producers, benefited from crude prices over the past decade, often rising above $100 to accumulate reserves and to boost its domestic economy.
Full text: DUBAI--Fitch Ratings cut Saudi Arabia's credit rating on Tuesday, another sign of how low oil prices are taking their toll on the kingdom's finances. Fitch reduced Saudi Arabia's long-term foreign and local currency ratings to AA-minus from AA while retaining a negative outlook. The ratings agency predicts oil prices for 2016 and 2017 to be at $35 and $45 a barrel, a level that would have "major negative implications for Saudi Arabia's fiscal and external balances." Fitch's ratings downgrade follows similar moves by Standard & Poor's and Moody's. S&P in February lowered the country's rating to A-minus , also because of the low oil prices. Moody's had previously placed Saudi Arabia's credit rating on review for a potential downgrade. Saudi Arabia, one of the world's leading oil producers, benefited from crude prices over the past decade, often rising above $100 to accumulate reserves and to boost its domestic economy. But since the middle of 2014, oil prices have sunk to as low as $30 a barrel, straining the country's finances . Saudi Arabia's government deficit expanded to 14.8% of its gross domestic product in 2015 from 2.3% in 2014 as oil revenues, its chief source of income, dwindled. The preceding years, Saudi Arabia had posted a surplus. In response to its widening deficit, the country has started to raise fresh funds and draw down its foreign reserves. It is currently in talks with international lenders to secure a loan of up to $10 billion and is looking to tap the international bond market later this year, according to bankers familiar with the matter. Fitch says the borrowings will push up the country's government debt to GDP ratio to 9.4% in 2017 from 1.5% in 2014, which it still considers at a low level compared with its peers. Saudi Arabia has also raised utility and fuel prices and raised some taxes to find alternative revenue sources. The oil exporter is expected to announce further economic reforms to reduce its dependence on oil. "Even if fully implemented, the measures will not prevent a substantial erosion of fiscal and external buffers during 2016 and 2017," said Fitch. Saudi Arabia's Deputy Crown Prince Mohammed bin Salman is widely seen as the driving force behind the recent economic measures but the concentration of so many roles in the hands of one person has added an element of unpredictability, according to Fitch. "This may have contributed to an acceleration of the economic policy-making process, but has also reduced the predictability of decision-making," the ratings firm said. Write to Nicolas Parasie at nicolas.parasie@wsj.com Credit: By Nicolas Parasie
Subject: Ratings & rankings; Bond issues; International finance; Economic development; Bond ratings; Crude oil prices; Gross Domestic Product--GDP; Economic reform
Location: Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780155988
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780155988?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Rally Sparks Selloff in Global Government Bonds; U.S. Treasury begins three days of debt sales with an auction of three-year notes
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
The Treasury market "is very complacently priced" in terms of inflation risk, said Richard Gilhooly, head of interest rate strategy at CIBC World Markets Corp. Annual inflation in the U.K. accelerated in March to its highest level in more than a year, but still remained well below the Bank of England's 2% target.
Full text: Soaring crude oil prices on Tuesday boosted investors' risk appetites and sparked a broad selloff in government bonds from both sides of the Atlantic. Benchmark 10-year government bond yields in the U.S., Germany and the U.K. rose to the highest level in more than a week. Yields rise as bond prices fall. The yield on the benchmark 10-year U.S. Treasury note closed at 1.781%, compared with 1.724% Monday. U.S. crude oil gained 4.5% and settled at the highest level since November 2015. U.S. stocks and copper also strengthened. "Oil is the most visible symbol of improving optimism," which sapped demand for haven bonds, said Jim Vogel, head of interest-rate strategy at FTN Financial. "Bond traders are particularly impressed with crude oil's ability the last several weeks to ratchet upward'' from a recent low. New debt sales put additional selling pressure on bonds. A $20 billion sale of 10-year Treasury notes is due on Wednesday, followed by a $12 billion sale of 30-year bonds Thursday. Another factor hurting demand for bonds: a report showing inflation pressure in the U.K. picked up momentum from very low level. Inflation chips away bonds' fixed returns over time and is the main threat to long-term government bonds. The yield on the 10-year German government bond rose to 0.175% and the 10-year U.K. government debt increased to 1.463%, according to Tradeweb. Bond yields remain near historical low levels amid a world of sluggish growth and low interest rates. The International Monetary Fund on Tuesday cut its forecast for the global economy's expansion this year to 3.2% and warned that the world economy is increasingly at risk of stalling. Bond yields have dropped sharply since the start of the year as an uncertain global growth and inflation outlook have driven investors to preserve capital in high-grade sovereign bonds. Unconventional monetary stimulus adopted by central banks in Japan and a number of European countries have generated a growing pool of negative-yield government bonds, intensifying investors' struggle to obtain income. U.S. Treasurys offer one of the highest yields in the developed world, attracting investors in Asia and Europe. "There is a small but growing fear that the U.S. will get sucked into a negative rate environment the way that ships sink in a whirlpool,'' said John Brady, managing director at futures brokerage R.J. O'Brien. Buying bonds at historically low yields carry considerable risks, analysts warn. The U.S. 10-year Treasury yield is less than 0.4 percentage point above its closing record low set in the summer of 2012 when fear over a breakup of the eurozone intensified. Bondholders are vulnerable if sentiment sours and investors shed positions at the same time. The government bond markets in the U.S., Germany and Japan have been hit with violent price swings in the past few years, generating pain for bondholders in the short term. The Treasury market "is very complacently priced" in terms of inflation risk, said Richard Gilhooly, head of interest rate strategy at CIBC World Markets Corp. Annual inflation in the U.K. accelerated in March to its highest level in more than a year, but still remained well below the Bank of England's 2% target. Consumer prices rose 0.5% on the year in March from 0.3% in February, the Office for National Statistics said Tuesday, the fastest rate of inflation since December 2014. Few expect runaway inflation in this low growth world. But recent data have showed an uptick in inflation in the U.S. Some inflation indicator has risen above the Fed's 2% target. Oil priced have also gained ground this year after a big drop between the summer of 2014 and the end of last year, raising some speculation that oil prices might have reached a bottom. If oil gains more momentum, it may raise inflation expectations and push up consumer prices, say some analysts. Federal Reserve Chairwoman Janet Yellen has said in recent weeks that it remains to be seen whether the rise in inflation would be sustained. Ms. Yellen said she would be very slow in raising interest rates due to a muddy global growth outlook. Analysts say the Fed's go-slow stance in tightening policy reduces the risk of a big rise in U.S. bond yields. Write to Min Zeng at min.zeng@wsj.com Credit: By Min Zeng
Subject: Bond markets; Government bonds; Crude oil prices; Treasuries
Location: United States--US United Kingdom--UK Germany
Company / organization: Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780162732
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780162732?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Calpers Pushes Exxon to Outline Potential Effects of Climate-Change Initiatives; Following global accord to limit earth's warming, shareholders ask for added disclosures from energy investments
Author: Friedman, Nicole; Olson, Bradley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
Exxon and Chevron executives have had a consistent message for years on the future of oil and gas drilling, saying that economic growth in emerging economies such as India and China will power fossil-fuel demand for many decades.
Full text: Investors holding more than $5 billion in Exxon Mobil Corp. shares are urging the company to disclose how its business would be affected by the global push to slow warming atmospheric temperatures. The California Public Employees' Retirement System is planning an effort to put its muscle behind climate-related shareholder proposals for the first time. The outreach campaign is expected to test the strength of climate activism among shareholders of the world's largest publicly traded oil company, whose stock-market value was $345.55 billion as of Monday, according to FactSet. Environmentally minded Exxon investors have sought for decades to use the company's annual meeting, set for next month, as a bully pulpit, usually with limited success. This year, a change in investor attitude following the December climate talks in Paris and an active proxy campaign could garner far more votes than in previous contests, analysts say. Similar proposals passed overwhelmingly last year after executives at Royal Dutch Shell PLC and BP PLC decided to embrace them, but climate-related resolutions have never exceeded 35% in votes at the annual meetings of Exxon or Chevron Corp. "This isn't an environmental issue. This has moved into the mainstream following the Paris agreement," said Anne Simpson, Calpers' investment director of global governance. Nearly 200 countries pledged in Paris in December to hold the rise in average global temperatures to less than two degrees Celsius above pre-industrial levels. Calpers is launching a campaign to encourage shareholders to support proposals urging Exxon, Chevron and 10 other energy and mining companies to examine how much of their reserves would have to be left untapped if the two-degree goal were to be achieved, Ms. Simpson said. Exxon and Chevron executives have had a consistent message for years on the future of oil and gas drilling, saying that economic growth in emerging economies such as India and China will power fossil-fuel demand for many decades. The companies as well as forecasters including the International Energy Agency don't yet consider the low-carbon scenario contemplated in the Paris agreement to be a base case, or most likely, outcome. Last week, Chevron recommended a vote against the proposal. The company said it already accounts for climate risks in its project planning, and that such a disclosure would put it at a competitive disadvantage. Both Exxon and Chevron sought to keep the two-degree proposals from reaching their proxy ballot, telling the U.S. Securities and Exchange Commission they are vague and unnecessary given their other disclosures about climate risks. Last month, the SEC ruled the proposals could go forward. The resolutions are nonbinding. More than 30 investors, including New York City's pension funds and Legal & General Investment Management, have committed to supporting the Exxon resolution, according to Ceres, a non profit that advocates for sustainable business. The campaign is part of a nascent movement advocating for greater understanding of climate risks. The central idea is that to achieve the two-degrees Celsius goal, a significant amount of oil, gas and coal held by world producers would have to remain in the ground. Barclays PLC estimates that in a two-degree scenario, energy producers would earn $103 trillion in revenue between 2014 and 2040, $34 trillion lower than in a base-case scenario for energy consumption. Some experts say these concerns are overblown. Companies are valued on their expected production in the next 10 to 15 years, not on their entire portfolio of reserves, said Nancy Meyer, associate director for climate strategy at consulting firm IHS. "The whole premise that companies are financially risky today because their nonproved assets may be unburned...doesn't necessarily align with how those assets are valued in the marketplace," Ms. Meyer said. Today's low energy prices are a bigger risk to producers than potential future regulations, she said. Bank of England Governor Mark Carney made speeches in 2014 and 2015 warning that climate change poses risks to investors and insurers. The G-20 group of industrial nations asked the Financial Stability Board in Basel, Switzerland, to examine the issue. One problem is that there is little consensus on how investors should quantify carbon risks. Around 400 sets of guidelines exist for disclosures related to climate or sustainability, according to a report released March 31 by a Financial Stability Board task force chaired by Former New York City Mayor Michael Bloomberg. "The first step is just about getting enough information" from companies, "so that we can make decisions that are grounded in economics," said Jessica Ground, global head of stewardship at Schroders, which manages $462 billion in assets and is supporting the climate disclosure resolutions. Write to Nicole Friedman at nicole.friedman@wsj.com and Bradley Olson at Bradley.Olson@wsj.com Credit: By Nicole Friedman and Bradley Olson
Subject: Petroleum industry; Shareholder voting; Investments; Proposals
People: Simpson, Anne
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: Public Employees Retirement System-California; NAICS: 525110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780173906
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780173906?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Russia Says Economy Could Recover Soon Thanks to Rising Oil Prices; Deputy Prime Minister Arkady Dvorkovich said rising oil exports could boost GDP
Author: Ostroukh, Andrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
Russia, which is cut off from global capital markets by Western sanctions, needs to develop its domestic bond market and encourage domestic investment activity, Ms. Nabiullina added.
Full text: MOSCOW--Senior Russian officials said on Tuesday that they were counting on higher oil prices to lift the country out of recession in the near term, a projection at odds with most professional forecasts. "There are no obstacles for economic growth this year," said Russian Deputy Prime Minister Arkady Dvorkovich. "This result will almost totally depend on us, on our actions...on actions of everyone who works in and with Russia." After Russia's economy slid into recession amid Western sanctions and a huge tumble in the price of oil--the country's key export--Russian officials looked to monetary and fiscal policies to spark a return to economic growth. But while the government has revised its budgets under different oil-price scenarios, the economy has shown little sign of recovery. Speaking at a Moscow Exchange forum, Mr. Dvorkovich said that gross domestic product in Russia could start to expand soon, thanks to rising oil production. A recovery in machinery and auto sectors, as well as a weak ruble, have all given an opportunity for stronger exports, he added. Mr. Dvorkovich said that if annual inflation remains at a moderate level of around 8% and if there were a cut to the central bank rate, banks might start to slash the currently high lending rates of around 20%. The country's central bank has resisted a rate cut since mid-2015 due to high inflationary risks. Russia's oil production is set to hit a post-Soviet high this year. Even so, Russian Energy Minister Alexander Novak said that his ministry believes oil prices will recover to between $60 and $65 a barrel in 2017-18. Oil prices are likely to average below $40 a barrel in the first six months of 2016, before recovering to $50 by the end of the year, he added. For years, Russia's economy rode high on oil prices above $100 a barrel. But as crude prices collapsed, GDP fell 3.7% in 2015. The government expects it to drop by another 0.7% this year. In contrast to the Russian optimism, the World Bank and the International Monetary Fund both expect Russia's economic downturn to be more prolonged as the country lacks much needed reforms. Leading private businesses tend to agree. Pyotr Aven, the head of Alfa Bank, Russia's largest independent lender, said macroeconomic policies alone won't be able to return the economy to growth because of the lack of a competitive investment climate and strong state involvement in business activities. "We are more cautious, more conservative and less optimistic in the private sector than government officials, who are traditionally more optimistic," Mr. Aven said. Mr. Aven said that the role of state-owned banks and the shadow economy is growing, representing the overall economic trend in Russia. He praised the central bank's policy of fighting inflation, saying that the current high lending rate doesn't seem to hamper economic activity. "People are not taking loans because the interest rates are high, but because they don't have faith in the future," he said. Speaking at the same Moscow Exchange panel, Bank of Russia Governor Elvira Nabiullina poured come cold water on the government's expectations of imminent economic recovery, repeating that the monetary policy will be focused on reigning in inflation. Russia, which is cut off from global capital markets by Western sanctions, needs to develop its domestic bond market and encourage domestic investment activity, Ms. Nabiullina added. "The pace of economic growth is our internal problem," she said. "Whatever the oil prices are, even $100 per barrel again, we won't be able to grow by more than 1.5%-2% without structural reforms and better investment climate." Write to Andrey Ostroukh at andrey.ostroukh@wsj.com Credit: By Andrey Ostroukh
Subject: Recessions; Economic growth; Central banks; Energy economics; Economic conditions; Crude oil prices; Petroleum production; Gross Domestic Product--GDP
Location: Russia
People: Novak, Alexander
Company / organization: Name: International Monetary Fund--IMF; NAICS: 522298; Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780190636
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780190636?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Weak Oil Prices Curbing Production; U.S. oil benchmark advances to highest level of 2016 on signs of output cuts
Author: Spindle, Bill
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
The expressed willingness of Qatar, Kuwait and the U.A.E. to support a freeze "indicates that the economic pain of low oil prices is even hitting the flushest of the oil producers," said Helima Croft, head of commodities strategy at RBC Capital Markets.\n
Full text: The debate among the world's biggest oil nations over whether to freeze production is beginning to be overtaken by a rapid slide in output around the world. On Tuesday, as traders looked to a weekend meeting on output in Doha, Qatar , the government said U.S. production dropped in March and will likely continue falling. The combination amounted to a double-shot of adrenaline for an oversupplied market, driving oil prices to their highest point this year. The price of U.S. oil jumped 4.5% to $42.17 a barrel, its highest price since November. For weeks, oil markets have been preoccupied with the likelihood of an agreement being reached in Doha. Helped by speculation of a deal led by Russia and Saudi Arabia, the world's two biggest producers, oil prices have recovered by almost one-third from the lows earlier this year. But increasingly, the low price of oil is doing the work for the world's big producers by knocking down production across the globe, according to traders and industry officials. Cash-starved smaller producers in Latin America, the North Sea and the shale fields of the U.S. are cutting production sharply. That could reduce or eliminate the glut of oil hanging over the market as early as late this year, some analysts said. "The impact of this price decline is going to be felt over the next few years," said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. "It took longer than expected and the price had to fall farther than expected, but it means there's not going to be as much supply in a couple of years." London-based research consultancy Energy Aspects recently revised its estimates for non-OPEC production declines this year to 700,000 barrels a day from 200,000 to 300,000 in earlier forecasts. It expects demand to begin outstripping supply and drawing on swollen crude stockpiles globally starting in June. Related * OPEC: Non-Cartel Output to Fall Sharply * Oil Prices Drop on Production-Freeze Pessimism * Banks Face New Headache on Oil Loans Against that backdrop, any agreement to freeze production at the planned Doha meeting could signal that the bottom of the oil-price rout has already passed. Others in the Organization of the Petroleum Exporting Countries--including Venezuela, Iraq, Qatar, Kuwait and the United Arab Emirates--have said they would likely go along with such an agreement , but it remains unclear whether OPEC members would go along with a freeze if Iran, also an OPEC member, doesn't participate. For its part, Iran, which only months ago escaped international sanctions that had slashed its oil exports by half, has said it has no intention of restraining output until its production increases to four million barrels a day, the level before sanctions. Iran is currently pumping around 3.1 million barrels a day. Iran's oil minister called the freeze plan "a joke" after an earlier Russia-Saudi Arabia summit to discuss it, denting optimism over a potential deal. Saudi Arabia has sent contradictory messages about whether it would agree to a freeze without Iran. While its oil minister broached the possibility of an agreement without Iran, the kingdom's powerful deputy crown prince, Mohammed bin Salman, said in a recent interview that Iran would have to participate. The two countries are locked in a larger geopolitical struggle for influence across the Middle East, raising questions about whether the kingdom might prioritize keeping up the political pressure on Iran through lower oil prices. Saudi Arabia raised its oil output above 10 million barrels a day last year in a bid to gain market share. Many analysts put low odds on Iran joining in a freeze deal. "It would be suicide for politicians in Tehran to capitulate to Saudi Arabia and freeze output," said Saadallah al-Fathi, a United Arab Emirates-based consultant and former OPEC official. "How can Saudi Arabia seriously ramp up to over 10 million barrels a day, say it is going to freeze and then expect Iran to comply with that?" That still may not stop OPEC members and Russia from freezing production on their own. Even the strongest oil producers are feeling increasing pain from the drop in revenue, and they may see a freeze as the only way to get relief. Most of the Gulf Arab states--including Saudi Arabia, Kuwait, Qatar and the Emirates--have seen their once-unquestioned rock-solid creditworthiness reviewed or downgraded in recent weeks. The expressed willingness of Qatar, Kuwait and the U.A.E. to support a freeze "indicates that the economic pain of low oil prices is even hitting the flushest of the oil producers," said Helima Croft, head of commodities strategy at RBC Capital Markets. Some countries, such as Venezuela, can't afford to wait for a rebalancing to play out between supply and demand, she said, while some of "the Gulf states could wait and don't want to wait." But even without a freeze, industry officials and traders say the hardships imposed by 18 months of low oil prices are weighing heavily on global production. International oil companies and petrostates alike have minimized exploration and slashed drilling budgets. After showing surprising resilience for more than a year, U.S. companies operating in the shale basins of Texas, North Dakota and Colorado are seeing accelerating output declines. The U.S. Energy Information Administration said in its short-term energy outlook Tuesday that U.S. crude production fell by 90,000 barrels a day in March from February. The agency lowered its U.S. output forecast for 2016 to 8.6 million barrels a day and 8 million barrels a day in 2017. That is off from a multidecade peak of 9.4 million barrels a day last year. It isn't just U.S. shale fields falling off. In the deep waters of the North Sea, where production is expensive, declining investment has meant the output declines that fields naturally experience over time have overtaken production from new drilling. Norway's crude-oil production, for example, grew by 4% to 1.56 million barrels a day in 2015. But output is expected to drop by 2% in 2016 and gradually level off to 1.38 million barrels a day in 2019, according to the Norwegian Petroleum Directorate. Oil production in Latin America is plummeting, as well, according to Energy Aspects. In Brazil nearly all of the biggest fields could see declines this year. Overall, Latin American production in February and March dropped below 8 million barrels a day for the first time since March 2014. Production in Mexico and Venezuela is also falling. That is encouraging many industry officials long searching for a bottom of the current price slump. "We're going to have a lot of volatility going forward, but from here on, the trend is up," Torbjorn Tornqvist, chief executive of Swiss trading house Gunvor Group, told the FT Commodities Global Summit in Lausanne, Switzerland, predicting a slow recovery to about $60-$70 a barrel. Other observers aren't so sure. Although production is coming down, a significant chunk of it could return from U.S. shale fields if prices rebound sharply. Unlike traditional producers, which need years of lead time to ramp up production, shale producers say they might be able to reverse course in a matter of months. At the least, that could restrain any uptick in prices, and could send them plunging again. "The key is going to be, once we have a pickup in prices how does shale respond? The jury is out on that." said Christof Ruhl, global head of research for the Abu Dhabi Investment Authority. Sarah Kent, Miriam Malek and Kevin Baxter contributed to this article. Write to Bill Spindle at bill.spindle@wsj.com Credit: By Bill Spindle
Subject: Petroleum industry; Agreements; Crude oil prices; Production increases
Location: Russia Iran United States--US Qatar North Sea Saudi Arabia
Company / organization: Name: Columbia University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780341927
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780341927?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Pay Shrinks for Most Oil CEOs, as Crude's Swoon Hits Stocks; For Exxon's Tillerson, total compensation for 2015 fell 18%, but BP's Dudley got pay bump
Author: Olson, Bradley; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Apr 2016: n/a.
Abstract:
In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest.
Full text: Most--but not all--top oil executives are seeing their pay shrink, after a plunge in crude prices that has erased $200 billion in stock-market value from the world's largest publicly traded energy companies. Bob Dudley, BP PLC's chief executive, enjoyed about a 20% bump in pay to $19.6 million in 2015, despite his company's $5.2 billion loss for the year and an accompanying stock-price decline of 11%. Many BP shareholders are incensed by the increase, and investor-advisory firms including Institutional Shareholder Services are counseling them not to ratify Mr. Dudley's pay package at the company's annual meeting Thursday. "This proposed increase is both unreasonable and insensitive," said Ashley Hamilton Claxton, corporate-governance manager at Royal London Asset Management, which holds BP shares worth about $600 million. She plans to vote against Mr. Dudley's pay. BP defended the pay package. "Despite the very challenging environment, BP's safety and operating performance was excellent throughout 2015, and management also responded early and decisively to the steep fall in the oil price," a company spokesman said. Other executive pay packages shrank along with stock prices. Exxon Mobil Corp. released data Wednesday that showed CEO Rex Tillerson's salary rose 6% to $3 million in 2015 even as the company's shares lost 15% of their value. But Mr. Tillerson's total pay fell 18% to $27.3 million, due to a lower bonus, stock awards and interest-rate-related changes in his pension. For the past five years, oil giants Exxon, Chevron Corp., Royal Dutch Shell PLC and BP have paid their top bosses nearly $500 million in combined compensation, even though the companies' annualized returns for the period have undershot those of the S&P 500. In 2015, Chevron chief John Watson's pay, including salary, bonus and stock options, rose 3%, but with pension-benefit changes his total compensation fell by 15% to about $22 million. Most of Mr. Watson's pay rises and falls with shareholder value, based on stock prices, with added emphasis on safety and other factors aligned with good corporate governance, said Kurt Glaubitz, a company spokesman. "Overall, Mr. Watson's 2015 compensation package recognizes and reflects the value he continues to deliver to Chevron's stockholders," Mr. Glaubitz said. The salary and bonus of Anglo-Dutch Shell's CEO, Ben van Beurden, who is paid in euros, fell 13% to $5.5 million when translated into dollars. Mr. van Beurden's overall pay for 2015, including pension changes, tumbled 81%. Shell's profit for the year plunged 80%. "Shell's executive compensation reflects delivery of our strategy, measured by both short-term and long-term targets," said Jonathan French, a Shell spokesman. "There is a clear alignment between the company's performance and our compensation policies." Stockholders at Chevron, Exxon and Shell will get to vote on executive pay next month--though the votes aren't binding. At those meetings, the companies are expected to outline their worst first-quarter performances in decades, analysts say. Including BP, the four biggest Western oil companies have laid off, or are in the process of shedding, more than 25,000 workers because of the protracted downturn in energy prices. At the two dozen energy companies in the S&P 500 index, median pay, excluding pension changes, fell less than 1% from 2014 last year, according to an analysis by ISS Corporate Solutions Inc. That's far less than the cumulative 24% price decline for those companies. Executive compensation in other industries, except for retailing, increased last year. In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest. Those incentives are paid out over the long term, but they often get counted as part of annual pay packages. Compensation packages at many energy companies are built to work well in most market conditions, but some were never set up to manage the impact of a crash in oil-and-gas prices, said John Roe, head of advisory at ISS Corporate Solutions. "Sometimes, that produces results that don't pass the smell test," he said. "When that happens, companies need to step back and make sure that they are more responsive and aligned with shareholders. When they don't, they will run into issues year after year." ISS hasn't issued its recommendations on whether shareholders should endorse or reject pay packages at Exxon, Chevron and Shell, but says it will do so in coming weeks. One reason for discrepancies between executive pay and stock performance is that BP and other oil companies reward executives based on relative shareholder returns. That can blunt the impact of rising or falling oil prices because payouts depend more on how well a company performs relative to its peers, said Kevin Murphy, a professor at the University of Southern California's Marshall School of Business. Compared with the other three major oil companies, BP shares fell the least in 2015, dropping 11.7% including reinvested dividends, according to data from Morningstar. That is slightly ahead of Exxon's 12.6% share-price decline. Chevron's stock fell 16% last year, while Shell's was down 26%. Write to Bradley Olson at Bradley.Olson@wsj.com and Sarah Kent at sarah.kent@wsj.com Corrections & Amplifications For Exxon's Tillerson, total compensation for 2015 fell 18%. The sub-heading of an earlier version of this article misstated the year as 2005. (April 13, 2016) Credit: By Bradley Olson and Sarah Kent
Subject: Executive compensation; Petroleum industry; Chief executive officers; Prices; Wages & salaries; Energy industry
People: van Beurden, Ben Tillerson, Rex W
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Royal London Asset Management; NAICS: 523930; Name: University of Southern California; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780741709
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780741709?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Asian Shares Rally After Overnight Jump in Oil Prices; Japan's Nikkei Stock Average up 2.6% at 16349.82
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract:
"The big themes at the moment are the expected stabilization of both the yuan and China macro data in the second quarter, which will heal a lot of wounds for onshore investors," said Bill Bowler, equities trader at Forsyth Barr Asia Ltd. China's central bank, which guides trading of the onshore yuan through a daily reference rate, put the currency's "fix" earlier today at 6.4591 yuan to one U.S. dollar, the strongest level for the local currency since April 1.
Full text: Markets in Asia rallied Wednesday as an overnight jump in oil prices lifted energy shares. Japan's Nikkei Stock Average, recently battered as its currency surged, led the region, up 2.6% at 16349.82. Strength in the local currency hurts the competitiveness of Japanese exporters. The yen hit a 17-month high earlier in the week, but it has been weakening, last down 0.3% against the U.S. dollar. Elsewhere, the Hang Seng Index gained 2% and the S&P/ASX 200 was up 1.2%. South Korean markets were closed for a national holiday. Overnight, prices of U.S. crude-oil rose 4.5% to their highest point since November, on expectations that major producers would reach a deal to freeze production levels at a meeting Sunday. That lifted energy stocks on the S&P 500 overnight, as well as in Asia on Wednesday: Tokyo-listed oil producer Inpex Corp. soared by 4.9%. Energy stocks shot up 4.5% in Hong Kong, led by names like China Oilfield Services and PetroChina Co. Ltd., which soared by 7.2% and 6% respectively. In Australia, energy shares were up 3.2%. Brent crude oil prices were last slipping by 0.3% to $44.57 a barrel during the Asia trading day. In China, stocks also got a boost from the country's latest trade data, which showed exports rising 11.5% in March from a year earlier in dollar terms. Exports had been falling for eight straight months, including a 25.4% on-year decline recorded in February. Economists surveyed only forecast an 8.5% increase in March in dollar terms. Imports in March declined 7.6% from a year earlier also in dollar terms, compared with a 13.8% drop in February. "The big themes at the moment are the expected stabilization of both the yuan and China macro data in the second quarter, which will heal a lot of wounds for onshore investors," said Bill Bowler, equities trader at Forsyth Barr Asia Ltd. China's central bank, which guides trading of the onshore yuan through a daily reference rate, put the currency's "fix" earlier today at 6.4591 yuan to one U.S. dollar, the strongest level for the local currency since April 1. Investors in the region appeared to brush aside a cut by the International Monetary Fund to its global growth forecast for this year. For China, the fund upgraded its growth forecast by 0.2 percentage point to 6.5%, as the serve sector compensated for a downturn in manufacturing. Write to Chao Deng at Chao.Deng@wsj.com Credit: By Chao Deng
Subject: American dollar; Petroleum industry; International finance; Investments; Crude oil prices; Renminbi
Location: Japan United States--US Asia
Company / organization: Name: PetroChina Co Ltd; NAICS: 424720; Name: Inpex Corp; NAICS: 211111; Name: International Monetary Fund--IMF; NAICS: 522298; Name: China Oilfield Services; NAICS: 336611, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780343607
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/doc view/1780343607?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Edge Lower Ahead of Meeting on Production Freeze; June Brent fell $0.24 to $44.45 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract:
"The clash between the structural slowdown in global GDP/trade growth and the positive impact of low pump prices are the major story in global oil demand this year, which we expect to grow by 1.3 million barrels a day, compared to the 1.8 million barrels a day of growth in 2015," said consulting firm FGE in a note.
Full text: Crude-oil prices lost steam in early Wednesday trade in Asia on profit-taking, as conflicting expectations for key producers to agree on a production freeze keep the market in a volatile mode. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $41.85 a barrel at 0230 GMT, down $0.32 in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell $0.24 to $44.45 a barrel. The global oil market has been in the doldrums for nearly two years due to oversupply. Despite the extended collapse in prices, those inside and outside of the Organization of the Petroleum Exporting Countries have been reluctant to scale back production fearing the loss of market share. Low oil prices have led to investment cuts by upstream companies as well as bankruptcy among the smaller players. But production, albeit declining, is still growing at a faster pace than demand. Expectations for the Sunday meeting in Doha are largely mixed. Some market watchers believe holding production at January or February levels would eventually allow time for demand to catch up. As oil prices are viewed as a barometer of global financial health, higher oil prices means a lighter burden on central banks to inject more stimulus measures, said Barnabas Gan, an economist at OCBC, a bank. However, others say a freeze just when key players are pumping at record levels won't provide any meaningful relief. It remains to be seen if an accord can be forged, especially as Iran has already rejected the plan, vowing to ramp up production until it reaches the pre-sanction level of 4 million barrels a day. "In our view the freeze idea was always a relatively transparent attempt to convince Iran to limit its production, rather than boosting output back toward pre-sanctions levels. And this attempt has already failed," said Timothy Evans, a Citi Futures analyst. In the immediate term, investors and traders will be eyeing the weekly U.S. crude production and inventories data for cues. A survey by The Wall Street Journal shows U.S. crude stockpiles likely added 1.8 million barrels last week while gasoline supplies fell. The American Petroleum Institute, an industry group, expects a 6.2-million-barrel increase in crude supplies, a 1.6-million-barrel drop in gasoline stocks and a 530,000-barrel decrease in distillate inventories. The official figures will be released later Wednesday by the Energy Information Administration which recently said U.S. crude production had slipped from a multidecade peak of 9.7 million barrels a day in April 15 to 9 million barrels a day last month. While diminishing supply is encouraging, concerns on demand have ensued after the International Monetary Fund cut global growth for 2016 by 0.2 percentage point to 3.2%. "The clash between the structural slowdown in global GDP/trade growth and the positive impact of low pump prices are the major story in global oil demand this year, which we expect to grow by 1.3 million barrels a day, compared to the 1.8 million barrels a day of growth in 2015," said consulting firm FGE in a note. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--fell 17 points to $1.5326 a gallon, while May diesel traded at $1.2765, 6 points higher. ICE gasoil for May changed hands at $378.75 a metric ton, up $2.75 from Tuesday's settlement. Credit: By Jenny Hsu
Subject: Petroleum industry; Sanctions; Inventory; Futures; Crude oil prices
Location: Iran United States--US Asia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780347249
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780347249?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Loans Burden Banks --- Vast credits promised to energy companies weigh on big lenders as earnings season arrives
Author: Ensign, Rachel Louise
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Apr 2016: C.1.
Abstract:
J.P. Morgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. -- pledged the majority of this amount.
Full text: The $147 billion question for banks: Will energy companies max out their credit lines? When big banks announce earnings starting Wednesday, the spotlight will be on vast energy loans that most investors didn't know much about until recently. These unfunded loans have been promised to energy companies, which haven't yet tapped the money. Many banks historically haven't disclosed these loans, but began doing so recently following the extended slide in prices for oil and gas. In the first quarter, a handful of energy borrowers announced more than $3 billion of drawdowns against these types of loans. Those commitments are expected to trickle down to bank earnings and saddle firms with more energy exposure just as they are trying to pare it back. "Let's not sugarcoat it. This is not necessarily a loan a bank wants to make at this point," said Glenn Schorr, a bank analyst at Evercore ISI. Oil prices have risen in recent weeks, with the U.S. benchmark settling at $42.17 a barrel on Tuesday, but analysts say the unfunded loans to the sector still are a headache for banks at that price. Banks in recent months have set aside billions of dollars to cover potential losses tied to energy companies, a trend likely to continue as more loans go bad. Fitch Ratings Inc. released a report Tuesday that said that nearly 60% of unrated and below-investment-grade energy companies are likely to have loans labeled as "classified," or in danger of default under regulatory guidelines. "It's grim," said Sharon Bonelli, senior director of leveraged finance at Fitch. Banks often use a company's proven energy reserves as collateral for loans and typically reset the value of these reserves twice a year, usually in spring and fall. The draws made so far were done ahead of the spring redetermination process, in which banks are expected to cut the credit lines of energy firms by an average of more than 30%, according to a survey from law firm Haynes & Boone LLP. Ms. Bonelli and other analysts say bank loans are increasingly vital lifelines for energy companies, because other funding sources have dried up. The $147 billion in unfunded loans have been disclosed by 10 of the largest U.S. banks, according to fourth-quarter data from Barclays PLC. The four largest U.S. banks -- J.P. Morgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. -- pledged the majority of this amount. Smaller U.S. lenders and large international banks have made billions more of these loans. "With oil at $60, it's not that big of a deal. With oil at $40, it becomes more of a source of concern," Barclays analyst Jason Goldberg said of the unfunded loans. "Will companies draw down in difficult times?" Lenders routinely offer these commercial lines of credit to industrial companies. But the energy loans, often promised before prices started their steep decline, face a unique set of pressures. James Dimon, J.P. Morgan's chief executive, said in February that the unfunded loans are "the most unpredictable part of our assumptions" about the bank's energy exposure. Mr. Dimon also said he isn't expecting a large percentage of the unfunded money to get drawn because most of those promised loans went to investment-grade companies that he thinks are unlikely to need access to additional cash. Banks hold reserves against unfunded loans in addition to reserves for loans that have been taken out. A mounting number of troubled energy firms have tapped their unfunded loans. Denver-based oil-and-gas firm Bonanza Creek Energy Inc., for instance, said in March that it drew $209 million from its credit facility from a group of banks led by Cleveland-based KeyCorp. Bonanza Creek's chief executive said in a news release that the move was "a risk-management decision" and praised its "committed and supportive commercial bank syndicate." A KeyCorp spokesman declined to comment. Tidewater Inc., which provides vessels to the offshore drilling industry, said in March it took out the maximum $600 million from its credit facility led by Bank of America. The firm's chief executive cited "the uncertainty surrounding the future direction in oil and gas prices," in a news release announcing the withdrawal. A Bank of America spokesman declined to comment. To stem such withdrawals, some banks have negotiated what are known as anti-cash-hoarding provisions when energy firms have asked for amendments to their loans in recent months. These clauses require the companies to use extra cash to repay the balance on their credit lines in exchange, according to regulatory filings. But for distressed firms facing bankruptcy that can contractually do so, "you'd seriously have to consider a game plan to draw down," said Ian Peck, head of the bankruptcy practice at Haynes & Boone. Credit: By Rachel Louise Ensign
Subject: Bank reserves; Banking industry; Lines of credit; Energy industry
Location: United States--US
Company / organization: Name: Haynes & Boone; NAICS: 541110; Name: Fitch Inc; NAICS: 523930; Name: Barclays PLC; NAICS: 522110, 523110, 551111
Classification: 8110: Commercial banking services; 1510: Energy resources; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 13, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780441395
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780441395?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Russia Says Oil-Freeze Deal Could Go Ahead Without Iran; Comments come ahead of meeting between major oil-producing nations in Qatar on Sunday
Author: Grove, Thomas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract:
MOSCOW--Russian Energy Minister Alexander Novak said Wednesday that an agreement on freezing oil production could be reached between oil-producing countries without the participation of Iran, Tass reported.
Full text: MOSCOW--Russian Energy Minister Alexander Novak said Wednesday that an agreement on freezing oil production could be reached between oil-producing countries without the participation of Iran, Tass reported. "Everything is possible because this is an open document. Everyone who wants to join it will do so. Those who don't wish to join--no one will force them to join up," he said, according to the Russian news agency. Officials from major oil producers Russia and Saudi Arabia will meet with their Iranian counterparts in Doha, Qatar, on Sunday to discuss an output freeze. As traders looked ahead to the meeting, crude prices were lifted Tuesday to the highest level of the year after the U.S. government said production dropped in March and will likely continue falling. Some investors see a potential output freeze as a prelude to output cuts later in the year, while others say such a move will do nothing to alleviate the oversupplied market. However, questions remain over the willingness of the three countries to reach an agreement. Iran has balked at the prospect of joining a freeze deal and has said it will keep pumping until production reaches the level it was at before Western sanctions were put in place--about four million barrels a day. Write to Thomas Grove at thomas.grove@wsj.com Credit: By Thomas Grove
Subject: Petroleum industry; Petroleum production; Oil reserves
Location: Qatar Iran United States--US Saudi Arabia
People: Novak, Alexander
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780454136
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780454136?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall on Bearish U.S. Supply Data, Doubts on Production Cuts; Pessimism mounts over prospects for agreement among sovereign producers to curb output
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract:
More * U.S. Output Finally Falls Below Key Level--But Inventories Rise * OPEC Sees Drop in Production Among Nonmembers After touching multiyear lows earlier this year, crude prices have surged in the expectation that producers would begin to curtail output to alleviate a global oil glut and prompt a price recovery.
Full text: U.S. and global oil benchmarks fell Wednesday amid bearish surprises in weekly U.S. crude supply data and mounting pessimism about prospects for an agreement among sovereign producers to curb output. Both major contracts spent most of the day in the red, pulling back from 2016 highs the day before. The U.S. benchmark fell 1% to $41.76 a barrel on the New York Mercantile Exchange, while the global Brent contract fell 1.1% to $44.18 a barrel on the ICE Futures Europe exchange. The U.S. Energy Department said domestic oil inventories rose 6.6 million barrels last week, far more than the 1.8-million barrel increase projected by analysts. The report also said imports of foreign oil jumped last week and refinery demand slowed. More * U.S. Output Finally Falls Below Key Level--But Inventories Rise * OPEC Sees Drop in Production Among Nonmembers After touching multiyear lows earlier this year, crude prices have surged in the expectation that producers would begin to curtail output to alleviate a global oil glut and prompt a price recovery. That evidence is finally starting to emerge in Latin America, Asia and even the U.S., where the Energy Department said Wednesday that oil production fell below 9 million barrels a day for the first time since September 2014. But there is still a long way to go. The surprise increase in U.S. oil inventories brought commercial stockpiles to more than 536 million barrels, setting a new modern record. And after early optimism that a meeting of members and nonmembers of the Organization of the Petroleum Exporting Countries in Doha, Qatar, this weekend would yield an output freeze agreement, skepticism is mounting that a deal will be reached or that it will have a meaningful impact. Iran has said it won't participate in an agreement until it restores output to levels achieved before international sanctions were imposed on the country, and Iraq and Russia have said they set new production records in March. "We just want to focus on this fantasy that OPEC is going to come to an agreement, and ignore the facts that are staring us in the face," said Stephen Schork, president of research consultancy Schork Group. The coming Doha meeting is dominating market sentiment and will continue to do so for the rest of the week, according to Morgan Stanley. But if a deal is agreed to, any upside would likely be limited to current price levels, the bank said in a research note. "The bear case is that the deal falls apart (low odds in our view), but we would still expect positive spin and a commitment to continue talks." Meanwhile, a closely watched monthly report from OPEC said its output rose 15,000 barrels a day to 32.25 million barrels a day in March, led by surging production from Iran. Still, the cartel said global production overall seemed to be falling faster than expected in response to the price collapse of the last two years, with big declines coming in China, the U.S. and Europe. In refined product markets, gasoline futures fell 0.3% to $1.5295 a gallon and diesel futures fell 0.8% to $1.2656 a gallon. Benoit Faucon, Kevin Baxter and Jenny W. Hsu contributed to this article. Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen
Subject: Petroleum industry; Agreements; Inventory; Futures; Petroleum production
Location: United States--US
People: Naimi, Ali I
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780472180
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780472180?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Strong China Trade Data Pushes Copper Prices Higher; Rising oil prices and firm Asian stock markets also drive the metal up
Author: Erheriene, Ese
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract:
[...]metal prices tend to follow the country's economic fortunes closely.
Full text: LONDON--London copper futures jumped higher on Wednesday, propelled by stronger trade data out of top consumer China, recent oil price gains and firmer Asian equities. The London Metal Exchange's three-month copper contract was up 0.9% at $4,810 a metric ton in midmorning European trade, having hit an eight-day high earlier in the session at $4,855 a ton. "[Base] metal prices are being driven up by rising oil prices, firm Asian stock markets and positive Chinese economic data," said Commerzbank AG in a note. China's General Administration of Customs said exports expanded in March for the first time in nine months, up 11.5% year-over-year in March versus a 25.4% drop in February. The country's imports fell less than economists expected over the same period, declining 7.6% compared with February's fall of 13.8%. Imports of copper into China reached their highest level ever in March, according to Commerzbank, up 40% at 570,000 tons year-over-year. China is the world's biggest consumer of copper, accounting for roughly 45% of global demand for the metal. As a result, metal prices tend to follow the country's economic fortunes closely. Additionally, copper found support in oil prices, which have strengthened in recent days on the back of market expectations of a potential deal to freeze production between major producers at a meeting in Doha, Qatar , this weekend. The two commodities are often bought together as part of a basket of commodities in a fund, so large upswings in the oil price tend to positively spill over into copper. Shares in Asia also rose, with Hong Kong's Hang Seng Index gaining 3.2% and the Shanghai Composite Index up 1.4%. This indicated greater investor risk appetite, which tends to benefit so-called risk assets like base metals to the detriment of safe-havens like gold. Going forward, future Chinese imports could slow and that could hurt copper prices. "[China's] import levels could ease lower in coming months if an improvement in fundamentals doesn't follow through," said ANZ Research. All the base metals were in positive territory midweek. Aluminum was up 1.1% at $1,549.50 a ton, zinc was up 1.5% at $1,860 a ton, nickel was up 0.3% at $8,890 a ton, lead was up 0.03% at $1,725.50 a ton and tin was up 1% at $16,940 a ton. Write to Ese Erheriene at ese.erheriene@wsj.com Credit: By Ese Erheriene
Subject: Aluminum industry; Supply & demand; Prices; International trade
Location: China
Company / organization: Name: London Metal Exchange; NAICS: 523210; Name: Commerzbank AG; NAICS: 522110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780484600
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780484600?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Exxon Mobil CEO Tillerson Was Paid $27.3 Million for 2015; Total pay declines 18% from year earlier as oil giant's profit falls
Author: Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract:
Exxon Mobil Corp. said Chief Executive Rex Tillerson's total compensation was $27.3 million for 2015, a decline of 18% from the year earlier as the oil giant's profits were hit by low oil prices.
Full text: Exxon Mobil Corp. said Chief Executive Rex Tillerson's total compensation was $27.3 million for 2015, a decline of 18% from the year earlier as the oil giant's profits were hit by low oil prices. The smaller pay package mostly reflected a decline in Mr. Tillerson's annual bonus and stock awards. The bonus declined to $2.4 million from $3.7 million a year earlier, while the value of stock awards fell to $18.3 million from $21.4 million. Those declines were slightly offset by an increase in his salary to $3 million from $2.9 million in 2014. During February the world's largest publicly traded oil company reported that its fourth-quarter profit tumbled 58%, to the lowest level since 2002, as the worst oil crash in decades hampered drilling operations. The Irving, Texas company also joined BP PLC and Chevron Corp. in reporting losses or sharply lower profits for the fourth-quarter and full-year of 2015. Write to Tess Stynes at tess.stynes@wsj.com Credit: By Tess Stynes
Subject: Executive compensation; Petroleum industry; Wages & salaries
Location: Texas
People: Tillerson, Rex W
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780544173
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780544173?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Crude Supplies Jump; Refinery Runs Slide; Crude-oil stockpiles increased to a historically-high levels for this time of year
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract:
Distillate stocks, which include heating oil and diesel fuel, rose by 505,000 barrels to 163.5 million barrels, and are "well above" the upper limit of the average range, the EIA said.
Full text: U.S. crude stockpiles surged higher in the week ended April 8, while refinery activity dropped sharply, according to data released Wednesday by the U.S. Energy Information Administration. Crude-oil stockpiles increased by 6.6 million barrels to 536.5 million barrels, which are historically-high levels for this time of year, the EIA said. Analysts surveyed by The Wall Street Journal had predicted supplies would rise by just 1.8 million barrels on the week. Oil stored at the Cushing, Okla., delivery point for U.S. stocks, decreased by 1.8 million barrels to 64.6 million barrels, the EIA said in its weekly report. Gasoline stockpiles slid by 4.2 million barrels to 239.8 million barrels. Analysts were expecting a 1.5-million-barrel decline. Distillate stocks, which include heating oil and diesel fuel, rose by 505,000 barrels to 163.5 million barrels, and are "well above" the upper limit of the average range, the EIA said. Analysts had expected a 200,000-barrel weekly increase. Refining capacity utilization fell by 2.2 percentage points from the previous week, to 89.2%. Analysts were expecting just a 0.1-percentage-point drop from the previous week. Write to Dan Molinski at Dan.Molinski@wsj.com Credit: By Dan Molinski
Subject: Petroleum industry
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780549480
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780549480?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil-Trading Firms Remain Cautious on Iran Until All U.S. Sanctions Lifted; Iran's oil production is growing, but more slowly than expected by Tehran
Author: Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract: None available.
Full text: LAUSANNE--The U.S. needs to clarify its position on Iranian sanctions if any progress is to be made in the Islamic Republic's oil sector, according to the chief executives of several major oil-trading firms. Speaking at the Financial Times Commodities Summit the chief executives said their companies are continuing to look at Iran with a cautious eye while a lack of clarity over U.S. sanctions persists. Despite the lifting of some major sanctions against Iran, activity with the country has been limited because of a number of existing U.S. sanctions related to charges of terrorism. Oil production is growing , but more slowly than expected by Tehran. "The U.S. has made no effort to facilitate or clarify what's going on so not seeing much movement on transactions," said Torbjörn Törnqvist, chief executive of Gunvor Group. These U.S. sanctions are deterring some banks from dealing with Iran because they cannot clear financial transactions through the dollar-clearing system. "Banks are being cautious and watching to see if there's any progress [in Iran]," said Jeremy Weir, Trafigura's chief executive. "The Iranian situation is complex, and the U.S. elections could change the future of Iran sanctions," according to Marco Dunand, chief executive of Mercuria. The trading houses agreed that although opportunities in Iran are promising in the long run, in the short term the speed at which Iran returns to the global oil stage depends on Iran itself. This is partly because an increase in Western technologies to Iran soon after the lifting of sanctions is unlikely, according to Alex Beard, chief executive of Glencore PLC. Politically, Iranians must also decide how closely they would like to align themselves with the West, Mr. Beard said. Corrections & Amplifications: Marco Dunand is the chief executive of Mercuria. An earlier version of this article incorrectly misspelled his last name as Durand. (April 13) Credit: By Miriam Malek
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780578753
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780578753?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon Fires Back at Climate-Change Probe; Argues subpoena represents unwarranted fishing expedition into its records that violates its constitutional rights
Author: Harder, Amy; Devlin, Barrett; Olson, Bradley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract:
Earlier * Calpers Pushes Exxon to Outline Potential Effects of Climate-Change Initiatives (April 12) * Think Tank Calls Subpoena an 'Affront to First Amendment Rights' (April 8) * Church of England and New York State Fund to Press Exxon on Climate Change (Jan. 15) * Carbon-Tax Debate Brings Together Unusual Allies (Nov. 30) * Exxon Gets Subpoena From N.Y. Regarding Climate-Change Research (Nov. 5) In the subpoena, the U.S. Virgin Islands told Exxon it could be violating two state laws, by purportedly obtaining money under false pretenses and conspiring to do so.
Full text: Exxon Mobil Corp. went to court Wednesday to challenge a government investigation of whether the company conspired to cover up its understanding of climate change, a sign the energy company is gearing up for a drawn-out legal battle with environmentalists and officials on the politically charged issue. The company filed court papers in Texas seeking to block a subpoena issued in March by the attorney general of the U.S. Virgin Islands, one of several government officials pursuing Exxon. Wednesday's filing argues that the subpoena is an unwarranted fishing expedition into Exxon's internal records that violates its constitutional rights. "The chilling effect of this inquiry, which discriminates based on viewpoint to target one side of an ongoing policy debate, strikes at protected speech at the core of the First Amendment," the filing says. Exxon also dismisses the notion that there is any suggestion of a crime, saying Attorney General Claude Earl Walker "issued the subpoena without the reasonable suspicion required by law and based on an ulterior motive to silence those who express views on climate change with which they disagree." A request for comment to the U.S. Virgin Islands' attorney general's office wasn't immediately returned. Earlier * Calpers Pushes Exxon to Outline Potential Effects of Climate-Change Initiatives (April 12) * Think Tank Calls Subpoena an 'Affront to First Amendment Rights' (April 8) * Church of England and New York State Fund to Press Exxon on Climate Change (Jan. 15) * Carbon-Tax Debate Brings Together Unusual Allies (Nov. 30) * Exxon Gets Subpoena From N.Y. Regarding Climate-Change Research (Nov. 5) In the subpoena, the U.S. Virgin Islands told Exxon it could be violating two state laws, by purportedly obtaining money under false pretenses and conspiring to do so. Both sides see this as a pivotal moment in a growing campaign by environmentalists to deploy a legal strategy used against tobacco companies in the 1990s by arguing that oil companies have long hidden what they know about climate change. Tobacco firms' finances and credibility were badly damaged by lawsuits accusing them of hiding the truth about their products. A key meeting in the new push unfolded in January behind closed doors at a Manhattan office building. The session brought together about a dozen people, including Kenny Bruno, a veteran of environmental campaigns, and Bill McKibben, founder of 350.org, two activists who helped lead the successful fight to block the Keystone XL pipeline. The new campaign's goals include "to establish in public's mind that Exxon is a corrupt institution that has pushed humanity (and all creation) toward climate chaos and grave harm," according to an agenda of the meeting viewed by The Wall Street Journal. This new legal strategy stems in part from environmentalists' frustration at what they see as the inadequacy of recent climate deals. Their hope is to encourage state attorneys general and the U.S. Justice Department to launch investigations and lawsuits that ultimately will change Exxon's behavior, force it to pay big damages and drive public attention to climate change. "It's about helping the larger public understand the urgencies of finding climate solutions," said Lee Wasserman, director of the Rockefeller Family Fund, which hosted the January meeting. "It's not really about Exxon." Exxon and its supporters dismiss the comparison with tobacco. Cigarettes are a harmful, addictive product used by a portion of the public, they say, while fossil fuels are fundamental to the world economy. In Wednesday's filing, Exxon's lawyers say the company has confirmed for more than a decade that it sees the risks of climate change, and that it has publicly advocated for a carbon tax as the best way to regulate carbon emissions. A key part of the activists' strategy is to seek documents that show otherwise: that Exxon, despite knowing the dangers of climate change, has sought to challenge the scientific consensus. Such revelations would help "delegitimize [Exxon] as a political actor," the January agenda said. In a twist, the initiative is set to be bankrolled partly by the heirs of John D. Rockefeller, the founder of Exxon's forebear, Standard Oil. The Rockefeller Family Fund has signaled it will help fund the campaign through its existing backing of 350.org, though it hasn't provided a figure. Wednesday's filing is Exxon's first legal salvo in what could be a long war, since at least four state attorneys general have launched investigations and a dozen others have signaled they might. None has been as aggressive as New York Attorney General Eric Schneiderman, who subpoenaed Exxon in November seeking information about the company's research on climate change over several decades. Exxon hasn't challenged that subpoena, partly because a New York law called the Martin Act gives Mr. Schneiderman wide latitude to investigate businesses for possible fraud or misrepresentation. The new legal theory has yet to gain momentum within the Justice Department, according to officials familiar with internal discussions. But after prodding by lawmakers, the Federal Bureau of Investigation is conducting a preliminary review. The issue also has seeped into the political arena. Democratic presidential front-runner Hillary Clinton has called for an investigation of Exxon, and Sen. Sheldon Whitehouse (D., R.I.), pressed U.S. Attorney General Loretta Lynch on the matter at a recent congressional hearing. The activists are focusing on internal Exxon documents that have surfaced in news outlets--including in publications or investigative projects that were funded partly by the Rockefeller Brothers Fund and Rockefeller Family Fund, which favor strong climate action. The media outlets involved--the Los Angeles Times and InsideClimate News--have said the reporting was done without influence by the funding sources. The activists' biggest challenge may be to establish clear culpability for global warming. Millions of individuals contribute with their use of fossil fuels, while national governments have done little despite knowing the risks, said David Uhlmann, a University of Michigan law professor and former federal environmental crimes prosecutor. "Exxon should have been far more forthright about the risks associated with climate change, but all of us are culpable for our collective failure to change," Mr. Uhlmann said. "The likelihood that these investigations will lead to significant damages are small." But Sharon Eubanks, who led the tobacco litigation during the Clinton and Bush administrations and attended the January meeting, said she believes a lawsuit by the government against Exxon is viable under the Racketeer Influenced and Corrupt Organizations Act. RICO allows the government to pursue civil lawsuits against a people or entities working in concert to violate the law. Write to Amy Harder at amy.harder@wsj.com , Devlin Barrett at devlin.barrett@wsj.com and Bradley Olson at Bradley.Olson@wsj.com Credit: By Amy Harder, Devlin Barrett and Bradley Olson
Subject: Attorneys general; Climate change; Carbon; Activism; Tobacco; Environmentalists; Subpoenas
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Rockefeller Family Fund; NAICS: 813211; Name: Church of England; NAICS: 813110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780578774
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780578774?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
China's Appetite for Commodities Shoots Up; Imports by China overall were down in March year-on-year, but copper, soybeans and oil stood out as winners
Author: Mukherji, Biman
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract:
[...]traders shipped copper to China to take advantage of an arbitrage opportunity as the industrial metal was trading at a premium of around $100 per ton in Shanghai compared to London.
Full text: China's better than expected trade data for March drove prices of copper and other industrial metals higher Wednesday, though concerns continued to linger about excess supplies. The world's second-largest economy imported 39% more copper in March than in the same month last year, China customs data showed. Imports of soybeans, used for cooking oil and pig feed, shot up 36% in March year over year. Meanwhile, China imported 13% more crude oil in March in the same time period, data showed. That made commodities a bright spot in China's overall imports, which declined 7.6%--a smaller drop than expected. China is the world's largest importer of metals and second-largest importer of crude oil. "It is a positive trend and should be supportive of prices in the short term," Daniel Hynes, analyst with ANZ Bank, said of the import data for metals and crude. "For prices to continue pushing higher, we need to see underlying conditions improve, which has not happened. The broad economic data is still showing industrial activity growth remains weak," Mr. Hynes added. Following the release of the data, prices of three-month copper futures on the London Metal Exchange rose by 1.2% to $4,820 per ton, while other base metals such zinc and nickel were up by 1.2% to $1,855 per ton and 0.5% to $8,900 per ton, respectively. Crude-oil imports remained elevated in March, as expected, thanks to China's aggressive efforts to stock up on strategic reserves and growing appetite from independently operated refineries known as teapots. BMI research says more teapots are expected to receive import quotas in coming months "as the government steps up its efforts to further liberalize the sector." However, the evidence of rising demand for crude oil in China's latest trade data failed to drive up prices in the Asia day. Investors were more focused on whether producers will announce measures to stem excess supplies at an upcoming meeting in Doha on Sunday. Demand in China for soybeans was strong, partly because the prices of palm oil--a competitor in the vegetable oil market-- have been high. Also increased supplies of soybeans from South America in the international market at lower prices are making purchases attractive. Palm oil prices are expected to stay high for the coming months, which should continue to make soybean an attractive purchase. Soybean prices remained relatively unchanged after the data were released, having rallied in the previous U.S. session. Copper imports were up for several reasons. Firstly, traders shipped copper to China to take advantage of an arbitrage opportunity as the industrial metal was trading at a premium of around $100 per ton in Shanghai compared to London. This was because there was a temporary shortage of copper in China due to marginal cutbacks by producers, said Mr. Hynes of ANZ Bank. Also, industrial demand was relatively low in last year's March data because of a late China New Year holiday period. Mr. Hynes said a recent buildup in inventories of commodities such as copper and iron-ore in China could also put a lid on the rally in prices, though part of the reason for the buildup in stocks is probably stemming from higher consumer confidence in the economy. Chinese steel rebar prices have risen up 40% year-to-date, giving room to steel mills to restock more iron ore. The latest trade data showed China's steel product exports rose by 30% on year in March to 9.98 million tons. Over and above physical demand from sectors such as housing and infrastructure, the inflow of copper into China has also likely been driven by speculative traders, Mr. Hynes said. They sought to take advantage of an arbitrage opportunity that existed between late February and early March as copper was trading at a premium of around $100 per ton in Shanghai compared to London due to a temporary shortage, Mr. Hynes said. However, analysts were optimistic that the worst in the commodity slump is over. "In the second quarter there will be a continuous demand [for commodities] from the macro economy," said Helen Lau, Hong Kong-based analyst with Argonaut Securities. While the positive upturn in China data is bound to support prices of most commodities, analysts said that the length of time needed for the expected price recovery would significantly depend on how soon producers are able to cut back output to reduce a glut of supplies ranging from metals to crude oil. Lucy Craymer and Jenny W. Hsu contributed to this article. Write to Biman Mukherji at biman.mukherji@wsj.com Credit: By Biman Mukherji
Subject: Soybeans; Supply & demand; Metals; International trade; Copper
Location: China
Company / organization: Name: Australia & New Zealand Banking Group Ltd; NAICS: 522110, 523120, 551111; Name: London Metal Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780643100
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780643100?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Pay Shrinks for Most Oil CEOs, as Crude's Swoon Hits Stocks; For Exxon's Tillerson, total compensation for 2015 fell 18%, but BP's Dudley got pay bump
Author: Olson, Bradley; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Apr 2016: n/a.
Abstract:
In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest.
Full text: Most--but not all--top oil executives are seeing their pay shrink, after a plunge in crude prices that has erased $200 billion in stock-market value from the world's largest publicly traded energy companies. Bob Dudley, BP PLC's chief executive, enjoyed about a 20% bump in pay to $19.6 million in 2015, despite his company's $5.2 billion loss for the year and an accompanying stock-price decline of 11%. Many BP shareholders are incensed by the increase, and investor-advisory firms including Institutional Shareholder Services are counseling them not to ratify Mr. Dudley's pay package at the company's annual meeting Thursday. "This proposed increase is both unreasonable and insensitive," said Ashley Hamilton Claxton, corporate-governance manager at Royal London Asset Management, which holds BP shares worth about $600 million. She plans to vote against Mr. Dudley's pay. BP defended the pay package. "Despite the very challenging environment, BP's safety and operating performance was excellent throughout 2015, and management also responded early and decisively to the steep fall in the oil price," a company spokesman said. Other executive pay packages shrank along with stock prices. Exxon Mobil Corp. released data Wednesday that showed CEO Rex Tillerson's salary rose 6% to $3 million in 2015 even as the company's shares lost 15% of their value. But Mr. Tillerson's total pay fell 18% to $27.3 million, due to a lower bonus, stock awards and interest-rate-related changes in his pension. For the past five years, oil giants Exxon, Chevron Corp., Royal Dutch Shell PLC and BP have paid their top bosses nearly $500 million in combined compensation, even though the companies' annualized returns for the period have undershot those of the S&P 500. In 2015, Chevron chief John Watson's pay, including salary, bonus and stock options, rose 3%, but with pension-benefit changes his total compensation fell by 15% to about $22 million. Most of Mr. Watson's pay rises and falls with shareholder value, based on stock prices, with added emphasis on safety and other factors aligned with good corporate governance, said Kurt Glaubitz, a company spokesman. "Overall, Mr. Watson's 2015 compensation package recognizes and reflects the value he continues to deliver to Chevron's stockholders," Mr. Glaubitz said. The salary and bonus of Anglo-Dutch Shell's CEO, Ben van Beurden, who is paid in euros, fell 13% to $5.5 million when translated into dollars. Mr. van Beurden's overall pay for 2015, including pension changes, tumbled 81%. Shell's profit for the year plunged 80%. "Shell's executive compensation reflects delivery of our strategy, measured by both short-term and long-term targets," said Jonathan French, a Shell spokesman. "There is a clear alignment between the company's performance and our compensation policies." Stockholders at Chevron, Exxon and Shell will get to vote on executive pay next month--though the votes aren't binding. At those meetings, the companies are expected to outline their worst first-quarter performances in decades, analysts say. Including BP, the four biggest Western oil companies have laid off, or are in the process of shedding, more than 25,000 workers because of the protracted downturn in energy prices. At the two dozen energy companies in the S&P 500 index, median pay, excluding pension changes, fell less than 1% from 2014 last year, according to an analysis by ISS Corporate Solutions Inc. That's far less than the cumulative 24% price decline for those companies. Executive compensation in other industries, except for retailing, increased last year. In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest. Those incentives are paid out over the long term, but they often get counted as part of annual pay packages. Compensation packages at many energy companies are built to work well in most market conditions, but some were never set up to manage the impact of a crash in oil-and-gas prices, said John Roe, head of advisory at ISS Corporate Solutions. "Sometimes, that produces results that don't pass the smell test," he said. "When that happens, companies need to step back and make sure that they are more responsive and aligned with shareholders. When they don't, they will run into issues year after year." ISS hasn't issued its recommendations on whether shareholders should endorse or reject pay packages at Exxon, Chevron and Shell, but says it will do so in coming weeks. One reason for discrepancies between executive pay and stock performance is that BP and other oil companies reward executives based on relative shareholder returns. That can blunt the impact of rising or falling oil prices because payouts depend more on how well a company performs relative to its peers, said Kevin Murphy, a professor at the University of Southern California's Marshall School of Business. Compared with the other three major oil companies, BP shares fell the least in 2015, dropping 11.7% including reinvested dividends, according to data from Morningstar. That is slightly ahead of Exxon's 12.6% share-price decline. Chevron's stock fell 16% last year, while Shell's was down 26%. Write to Bradley Olson at Bradley.Olson@wsj.com and Sarah Kent at sarah.kent@wsj.com Corrections & Amplifications For Exxon's Tillerson, total compensation for 2015 fell 18%. The sub-heading of an earlier version of this article misstated the year as 2005. (April 14, 2016) Credit: By Bradley Olson and Sarah Kent
Subject: Executive compensation; Petroleum industry; Chief executive officers; Prices; Wages & salaries; Energy industry
People: van Beurden, Ben Tillerson, Rex W
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Royal London Asset Management; NAICS: 523930; Name: University of Southern California; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 13, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781023618
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781023618?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Pay Shrinks for Most Oil CEOs, as Crude's Swoon Hits Stocks; For Exxon's Tillerson, total compensation for 2005 fell 18%, but BP's Dudley got pay bump
Author: Olson, Bradley; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2016: n/a.
Abstract:
In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest.
Full text: Most--but not all--top oil executives are seeing their pay shrink, after a plunge in crude prices that has erased $200 billion in stock-market value from the world's largest publicly traded energy companies. Bob Dudley, BP PLC's chief executive, enjoyed about a 20% bump in pay to $19.6 million in 2015, despite his company's $5.2 billion loss for the year and an accompanying stock-price decline of 11%. Many BP shareholders are incensed by the increase, and investor-advisory firms including Institutional Shareholder Services are counseling them not to ratify Mr. Dudley's pay package at the company's annual meeting Thursday. "This proposed increase is both unreasonable and insensitive," said Ashley Hamilton Claxton, corporate-governance manager at Royal London Asset Management, which holds BP shares worth about $600 million. She plans to vote against Mr. Dudley's pay. BP defended the pay package. "Despite the very challenging environment, BP's safety and operating performance was excellent throughout 2015, and management also responded early and decisively to the steep fall in the oil price," a company spokesman said. Other executive pay packages shrank along with stock prices. Exxon Mobil Corp. released data Wednesday that showed CEO Rex Tillerson's salary rose 6% to $3 million in 2015 even as the company's shares lost 15% of their value. But Mr. Tillerson's total pay fell 18% to $27.3 million, due to a lower bonus, stock awards and interest-rate-related changes in his pension. For the past five years, oil giants Exxon, Chevron Corp., Royal Dutch Shell PLC and BP have paid their top bosses nearly $500 million in combined compensation, even though the companies' annualized returns for the period have undershot those of the S&P 500. In 2015, Chevron chief John Watson's pay, including salary, bonus and stock options, rose 3%, but with pension-benefit changes his total compensation fell by 15% to about $22 million. Most of Mr. Watson's pay rises and falls with shareholder value, based on stock prices, with added emphasis on safety and other factors aligned with good corporate governance, said Kurt Glaubitz, a company spokesman. "Overall, Mr. Watson's 2015 compensation package recognizes and reflects the value he continues to deliver to Chevron's stockholders," Mr. Glaubitz said. The salary and bonus of Anglo-Dutch Shell's CEO, Ben van Beurden, who is paid in euros, fell 13% to $5.5 million when translated into dollars. Mr. van Beurden's overall pay for 2015, including pension changes, tumbled 81%. Shell's profit for the year plunged 80%. "Shell's executive compensation reflects delivery of our strategy, measured by both short-term and long-term targets," said Jonathan French, a Shell spokesman. "There is a clear alignment between the company's performance and our compensation policies." Stockholders at Chevron, Exxon and Shell will get to vote on executive pay next month--though the votes aren't binding. At those meetings, the companies are expected to outline their worst first-quarter performances in decades, analysts say. Including BP, the four biggest Western oil companies have laid off, or are in the process of shedding, more than 25,000 workers because of the protracted downturn in energy prices. At the two dozen energy companies in the S&P 500 index, median pay, excluding pension changes, fell less than 1% from 2014 last year, according to an analysis by ISS Corporate Solutions Inc. That's far less than the cumulative 24% price decline for those companies. Executive compensation in other industries, except for retailing, increased last year. In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take as long as a decade to vest. Those incentives are paid out over the long term, but they often get counted as part of annual pay packages. Compensation packages at many energy companies are built to work well in most market conditions, but some were never set up to manage the impact of a crash in oil-and-gas prices, said John Roe, head of advisory at ISS Corporate Solutions. "Sometimes, that produces results that don't pass the smell test," he said. "When that happens, companies need to step back and make sure that they are more responsive and aligned with shareholders. When they don't, they will run into issues year after year." ISS hasn't issued its recommendations on whether shareholders should endorse or reject pay packages at Exxon, Chevron and Shell, but says it will do so in coming weeks. One reason for discrepancies between executive pay and stock performance is that BP and other oil companies reward executives based on relative shareholder returns. That can blunt the impact of rising or falling oil prices because payouts depend more on how well a company performs relative to its peers, said Kevin Murphy, a professor at the University of Southern California's Marshall School of Business. Compared with the other three major oil companies, BP shares fell the least in 2015, dropping 11.7% including reinvested dividends, according to data from Morningstar. That is slightly ahead of Exxon's 12.6% share-price decline. Chevron's stock fell 16% last year, while Shell's was down 26%. Write to Bradley Olson at Bradley.Olson@wsj.com and Sarah Kent at sarah.kent@wsj.com Credit: By Bradley Olson and Sarah Kent
Subject: Executive compensation; Petroleum industry; Chief executive officers; Prices; Wages & salaries; Energy industry
People: van Beurden, Ben Tillerson, Rex W
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Royal London Asset Management; NAICS: 523930; Name: University of Southern California; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 14, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780690033
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780690033?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Weighed by Growing Glut and Waning Demand; June Brent crude fell $0.49 to $43.69 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2016: n/a.
Abstract: None available.
Full text: Crude-oil prices headed lower in early Asia trade on Thursday, suppressed by worries of an expanding supply glut after the world's oil cartel warned that demand growth could slow. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $41.30 a barrel at 0259 GMT, down $0.46 in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell $0.49 to $43.69 a barrel. In its closely watched monthly report, the Organization of the Petroleum Exporting Countries cut its forecast for 2016 oil-demand growth by 50,000 barrels a day. Demand for the commodity will now rise by 1.20 million barrels a day to 94.18 million barrels a day, according to its projections. The downgrade, though small, is underpinned by slower economic momentum in Latin America and uncertainties in China's growth, OPEC said. "There is great uncertainty as to whether weakening economic activity in Latin America and signals of a slowdown in China will be reflected in oil-demand data, especially for China," the organization said. China's exports unexpectedly rose 11.5% in March from the previous year, while imports declined 7.6%, a less-than-expected drop. Crude imports rose 13% to 32.6 million tons, however, equivalent to 7.71 million barrels a day. Much of China's thirst for crude comes from continuing efforts to fill up strategic reserves. A growing number of private refiners, known as teapots, is also driving up imports. "The teapots have become an indispensable part of China's imports and they will likely get stronger as the government issues importing quotas to more of them," said Li Li, a research director with ICIS China. An oversupply of crude has sunk prices for nearly two years and the latest expansion in U.S. crude stocks have stoked fears the rout might last longer. U.S. crude inventories grew 6.6 million barrels in the week ended April 8, surpassing the expected 1.8 million barrel increase. The latest addition brought commercial stockpiles to a new high of more than 536 million barrels. However, production fell below 9 million barrels a day for the first time since September 2014. "We think inventories are a key measure of the current weak fundamental balance in the market that the traders ignore at their financial peril," said Tim Evans, a Citi Futures analyst. All eyes will be on the Doha meeting on Sunday in which key producers are set to discuss a possible production freeze. There is also speculation the group will delay the freeze for Iran until its output reaches pre-sanction levels. Market views on the issue have been mixed. Some say a freeze at the recent level will allow demand to catch up. Others argue it will hardly chip away at the glut and that oil prices need to stay lower for longer to weed out weaker competitors. "The higher prices go before Sunday, the bigger the downside risk becomes if the outcome is in some way disappointing," said Michael Wittner, chief oil analyst at Société Générale. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--fell 85.00001 points to $1.5210 a gallon, while May diesel traded at $1.2591, 65 points lower. ICE gasoil for May changed hands at $372.75 a metric ton, down $4.25 from Wednesday's settlement. Credit: By Jenny Hsu
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780695169
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780695169?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Exxon Fires Back in Court Over U.S.'s Climate Probe
Author: Harder, Amy; Devlin, Barrett; Olson, Bradley
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Apr 2016: B.2.
Abstract:
Exxon Mobil Corp. went to court Wednesday to challenge a government investigation of whether the company conspired to cover up its understanding of climate change, a sign the energy company is gearing up for a drawn-out legal battle with environmentalists and officials on the politically charged issue.
Full text: Exxon Mobil Corp. went to court Wednesday to challenge a government investigation of whether the company conspired to cover up its understanding of climate change, a sign the energy company is gearing up for a drawn-out legal battle with environmentalists and officials on the politically charged issue. The company filed court papers in Texas seeking to block a subpoena issued in March by the attorney general of the U.S. Virgin Islands, one of several government officials pursuing Exxon. Wednesday's filing argues that the subpoena is an unwarranted fishing expedition into Exxon's internal records that violates its constitutional rights. "The chilling effect of this inquiry, which discriminates based on viewpoint to target one side of an ongoing policy debate, strikes at protected speech at the core of the First Amendment," the filing says. Exxon also dismisses the notion that there is any suggestion of a crime, saying Attorney General Claude Earl Walker "issued the subpoena without the reasonable suspicion required by law and based on an ulterior motive to silence those who express views on climate change with which they disagree." A request for comment to the U.S. Virgin Islands' attorney general's office wasn't immediately returned. In the subpoena, the U.S. Virgin Islands told Exxon it could be violating two state laws, by purportedly obtaining money under false pretenses and conspiring to do so. Both sides see this as a pivotal moment in a growing campaign by environmentalists to deploy a legal strategy used against tobacco companies in the 1990s by arguing that oil companies have long hidden what they know about climate change. Tobacco firms' finances and credibility were badly damaged by lawsuits accusing them of hiding the truth about their products. A key meeting in the new push unfolded in January behind closed doors at a Manhattan office building. The session brought together about a dozen people, including Kenny Bruno, a veteran of environmental campaigns, and Bill McKibben, founder of 350.org, two activists who helped lead the successful fight to block the Keystone XL pipeline. The new campaign's goals include "to establish in public's mind that Exxon is a corrupt institution that has pushed humanity (and all creation) toward climate chaos and grave harm," according to an agenda of the meeting viewed by The Wall Street Journal. This new legal strategy stems in part from environmentalists' frustration at what they see as the inadequacy of recent climate deals. Their hope is to encourage state attorneys general and the U.S. Justice Department to launch investigations and lawsuits that ultimately will change Exxon's behavior, force it to pay big damages and drive public attention to climate change. "It's about helping the larger public understand the urgencies of finding climate solutions," said Lee Wasserman, director of the Rockefeller Family Fund, which hosted the January meeting. "It's not really about Exxon." Exxon and its supporters dismiss the comparison with tobacco. Cigarettes are a harmful, addictive product used by a portion of the public, they say, while fossil fuels are fundamental to the world economy. In Wednesday's filing, Exxon's lawyers say the company has confirmed for more than a decade that it sees the risks of climate change, and has publicly advocated for a carbon tax as the best way to regulate carbon emissions. A key part of the activists' strategy is to seek documents that show otherwise: that Exxon, despite knowing the dangers of climate change, has sought to challenge the scientific consensus. Such revelations would help "delegitimize [Exxon] as a political actor," the January agenda said. In a twist, the initiative is set to be bankrolled partly by the heirs of John D. Rockefeller, the founder of Exxon's forebear, Standard Oil. The Rockefeller Family Fund has signaled it will help fund the campaign through its existing backing of 350.org, though it hasn't provided a figure. Wednesday's filing is Exxon's first legal salvo in what could be a long war, since at least four state attorneys general have launched investigations and a dozen others have signaled they might. None has been as aggressive as New York Attorney General Eric Schneiderman, who subpoenaed Exxon in November seeking data about the company's research on climate change over several decades. Exxon hasn't challenged that subpoena, partly because a New York law called the Martin Act gives Mr. Schneiderman wide latitude to investigate businesses for possible fraud or misrepresentation. The new legal theory has yet to gain momentum within the Justice Department, according to officials familiar with internal discussions. But after prodding by lawmakers, the Federal Bureau of Investigation is conducting a preliminary review. The issue also has seeped into the political arena. Democratic presidential front-runner Hillary Clinton has called for an investigation of Exxon, and Sen. Sheldon Whitehouse (D., R.I.), pressed U.S. Attorney General Loretta Lynch on the matter at a recent congressional hearing. The activists are focusing on Exxon documents that have surfaced in news outlets -- including in publications or investigative projects that were funded partly by the Rockefeller Brothers Fund and Rockefeller Family Fund, which favor strong climate action. The media outlets involved -- the Los Angeles Times and InsideClimate News -- have said the reporting was done without influence by the funding sources. The activists' biggest challenge may be to establish clear culpability for global warming. Millions of individuals contribute with their use of fossil fuels, while national governments have done little despite knowing the risks, said David Uhlmann, a University of Michigan law professor and former federal environmental crimes prosecutor. "Exxon should have been far more forthright about the risks associated with climate change, but all of us are culpable for our collective failure to change," Mr. Uhlmann said. "The likelihood that these investigations will lead to significant damages are small." But Sharon Eubanks, who led the tobacco litigation during the Clinton and Bush administrations and attended the January meeting, said she believes a lawsuit by the government against Exxon is viable under the Racketeer Influenced and Corrupt Organizations Act. RICO allows the government to pursue civil lawsuits against a people or entities working in concert to violate the law. Credit: By Amy Harder, Devlin Barrett and Bradley Olson
Subject: Attorneys general; Environmentalists; Subpoenas; Litigation; Climate change
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Classification: 1540: Pollution control; 8510: Petroleum industry; 9190: United States; 4330: Litigation
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: Apr 14, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780734514
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780734514?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil-Freeze Deal Would Have Limited Impact on Market, Says IEA; Saudi Arabia and Russia already producing at or near record rates, says energy watchdog
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2016: n/a.
Abstract:
[...]of declining non-OPEC supply and still robust demand, a big build-up of oil stocks will fall with annual gains shrinking to 0.2 million barrels a day in both the third and the fourth quarter, compared with 1.5 million barrels a day in the first half of 2016.
Full text: A prospective deal to freeze oil output at a meeting of producers in Doha on Sunday won't change oil markets which have already started to rebalance anyway, a top energy watchdog said Thursday. Russia and Saudi Arabia--the world's top oil exporters--are set to meet with other oil nations in Doha, Qatar, hoping to reach an agreement to cap their supply level in order to revive oil prices. But in its closely watched oil-market report, the International Energy Agency said "any deal struck will not materially impact the global supply-demand balance" during the first half of 2016. For one, "Saudi Arabia and Russia are already producing at or near record rates," said the Paris-based agency, which advises some of the world's largest energy consumers. More * Oil Prices Fluctuate * OPEC Sees Fall in Non-Cartel Output * Why Fall in U.S. Output Wasn't All Good News Riyadh pumped 10.19 million barrels a day in March, a decline of 30,000 barrels a day but still close to its peak levels. Overall, daily production from the Organization of the Petroleum Exporting Countries fell by 90,000 barrels in March to 32.47 million barrels a day due to outages in Nigeria and Iraq. Outside OPEC, Russian output reached a 30-year high in March at 10.91 million barrels a day, according to official statistics. But supply is falling in the U.S. and China as low prices dent investments. The IEA expects overall non-OPEC production to fall by 710,000 barrels a day to 57 million barrels a day this year. Already, weak production within OPEC and by producers outside the grouping cut global oil supplies by about 300,000 barrels a day in March to 96.1 million barrels a day. As a result of declining non-OPEC supply and still robust demand, a big build-up of oil stocks will fall with annual gains shrinking to 0.2 million barrels a day in both the third and the fourth quarter, compared with 1.5 million barrels a day in the first half of 2016. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Petroleum industry; Supply & demand; Cartels; Crude oil prices
Location: Russia Qatar Saudi Arabia
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); Ne w York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780741713
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780741713?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Energy XXI Files for Bankruptcy in Debt-for-Equity Swap; Texas energy company is latest to fall foul of volatile oil and gas prices
Author: Rizzo, Lillian; Olson, Bradley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2016: n/a.
Abstract:
Falling oil prices have roiled the oil and gas industry since the summer of 2014. Since the downturn began, about 60 North American oil and gas companies have filed for bankruptcy, involving nearly $20 billion in debt, according to the law firm Haynes & Boone.
Full text: Texas-based Energy XXI Ltd. filed for bankruptcy Thursday, becoming the latest heavily indebted oil-and-gas company to collapse amid volatile fuel prices. The company sought chapter 11 protection after striking a tentative deal on the terms of a $1.45 billion debt-for-equity swap with a group of its bondholders. Under a restructuring term sheet filed in U.S. Bankruptcy Court in Houston, the bondholder group--which includes Covalent Capital, DW Partners and Franklin Advisers Inc.--will swap their second-lien debt for 100% of the shares in a reorganized company subsidiary. The group backing the debt-for-equity swap, which also includes Mudrick Capital, Oaktree Capital Management and Pine River Capital Management, own debt that was issued by the subsidiary. Related * Oil Plunge Sparks Bankruptcy Concerns * Southcross Energy Parent Files for Bankruptcy * Emerald Oil Files for Chapter 11 Bankruptcy Protection Lower ranking bondholders, owed about $1.2 billion, will receive warrants for about 10% of the stock in the reorganized company under the proposed plane. Texas oil man John D. Schiller, who founded the Energy XXI in 2005, will stay on as chief executive of the new company. The publicly traded Energy XXI Ltd, which operates in Texas but is registered in Bermuda, will be liquidated. The proposed deal has the backing of bondholders owning about 63% in face amount of the second-lien debt. To win approval of a chapter 11 plan, the company will need to rally a little more support. Bankruptcy law requires approval from a group of creditors--two-thirds in amount and more than one-half in number--to agree to the deal. Falling oil prices have roiled the oil and gas industry since the summer of 2014. Since the downturn began, about 60 North American oil and gas companies have filed for bankruptcy, involving nearly $20 billion in debt, according to the law firm Haynes & Boone. For Energy XXI, the oil slump hit shortly after the company used debt to buy EPL Oil & Gas Inc. in a $1.53 billion deal that made Energy XXI the largest publicly traded producer of crude in the shallow waters of the Gulf of Mexico. After that deal, Mr. Schiller extolled the virtues of drilling offshore as long as oil prices remained relatively high. The company, founded in 2005, expanded through a series of acquisitions in Louisiana and the Gulf of Mexico. It expects operations to continue during the financial restructuring process, including paying royalty and surety obligations. The bankruptcy agreement calls for Energy XXI to file a reorganization plan by May 16, and have it approved by U.S. Bankruptcy Judge David Jones, who is overseeing the case, no later than Aug. 8. The company is seeking emergency approval to keep paying its workers and suppliers pending the bankruptcy case. Judge Jones has scheduled a hearing for Friday morning in Houston to consider approval of those requests. Alex MacDonald contributed to this article. Write to Lillian Rizzo at Lillian.Rizzo@wsj.com and Bradley Olson at Bradley.Olson@wsj.com Credit: By Lillian Rizzo and Bradley Olson
Subject: Bankruptcy reorganization; Petroleum industry; Bankruptcy laws; Debt restructuring; Natural gas utilities
Location: Texas
Company / organization: Name: EPL Oil & Gas Inc; NAICS: 211111; Name: Franklin Advisers Inc; NAICS: 523930; Name: Bankruptcy Court-US; NAICS: 922110; Name: Oaktree Capital Management LLC; NAICS: 523120, 523930, 523999; Name: Haynes & Boone; NAICS: 541110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780765033
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780765033?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Drop on Growing Doubts About Impact of Any Output Freeze; Producers will talk about a freeze, but some in market don't see that solving global glut of crude
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2016: n/a.
Abstract:
The Paris-based IEA said that the oil market looks set to move close to balance in the second half of this year amid steady oil demand growth and falling supplies in parts of the world However, the talk about the freeze meeting has kept investors on edge in recent weeks.
Full text: Oil prices flopped late in Thursday's trading session after being largely unchanged most of the day with opinions divided about recent U.S. inventory data and this weekend's meeting between the world's big oil exporters. Light, sweet crude for May delivery settled down 26 cents, or 0.6%, to $41.50 a barrel on the New York Mercantile Exchange. It spent most of the U.S. trading session just barely in positive territory, and made its sharp turn into losses with less than 15 minutes left before the 2:30 p.m. EDT settlement. Brent, the global benchmark, settled down 34 cents, or 0.8%, at $43.84 a barrel on ICE Futures Europe. Oil prices have been fluctuating since Wednesday when U.S. inventory data showed mixed results about changes in U.S. stockpiles. Crude stockpiles grew sharply, but that was balanced out by strong declines in gasoline stockpiles and a large draw from storage at the U.S. contract's delivery hub in Cushing, Okla. The market recently has been on one of its strongest rallies in years as the world's biggest exporters have started collaborating in an effort to boost prices. But many experts have found increasing reason to believe those efforts won't produce results, and opinions have become more divided about how prices will respond. "A lot of people are sitting on their hands, not sure what to do," said Ric Navy, senior vice president for energy futures at brokerage R.J. O'Brien & Associates LLC. "It's kind of listless trading all day." Saudi Arabia, Russia and others are gathering in Doha, Qatar, on Sunday for talks on limiting production to support prices. But even if they manage to clinch an agreement, it may not be strong enough to alleviate the continuing global glut of crude. Several of the countries are already producing at record rates, and have plateaued there in recent months even without the agreement. "If there is to be a production freeze, rather than a cut, the impact on physical oil supplies will be limited," the International Energy Agency said in its closely watched monthly market report on Thursday. The Paris-based IEA said that the oil market looks set to move close to balance in the second half of this year amid steady oil demand growth and falling supplies in parts of the world However, the talk about the freeze meeting has kept investors on edge in recent weeks. Prices have rallied by more than a third but the rally has been market by high volatility amid the lack of clarity about what can be agreed in Doha. Iran has already balked at participating in any deal as the country seeks to increase its production to pre-sanctions levels. "On balance, we see the likelihood of a strongly worded, formalized output freeze agreement between all participants--perhaps except Iran--as very slim," said analysts at consultancy JBC Energy. "The key will be to find a wording that keeps the flame burning...and allows meeting participants to save face." Oil's recent rally likely has little room left to run after the meeting, according to researchers at RBC Capital Markets, led by highly regarded OPEC expert Helima Croft. Some of the countries that have a preliminary agreement to cap production said they won't complete it unless Iran takes part, which seems unlikely to happen, according to RBC. "Saudi Arabia and Iran do not appear ready to give sufficient ground to get a comprehensive agreement done by Sunday," they said. Also Thursday, gasoline futures settled down 2.39 cents, or 1.6%, at $1.5056 a gallon. Diesel futures fell 1.13 cents, or 0.9%, to $1.2543 a gallon. Write to Timothy Puko at tim.puko@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Timothy Puko and Georgi Kantchev
Subject: Petroleum industry; Agreements; Inventory; Futures; Crude oil prices
Location: Iran United States--US Saudi Arabia
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780765101
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780765101?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Pay Drops For Most Oil Chiefs As Stocks Tumble
Author: Olson, Bradley; Kent, Sarah
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Apr 2016: B.1.
Abstract:
In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take a decade to vest.
Full text: Most -- but not all -- top oil executives are seeing their pay shrink, after a plunge in crude prices that has erased $200 billion in stock-market value from the world's largest publicly traded energy companies. Bob Dudley, BP PLC's chief executive, enjoyed about a 20% bump in pay to $19.6 million in 2015, despite his company's $5.2 billion loss for the year and an accompanying stock-price decline of 11%. Many BP shareholders are incensed by the increase, and investor-advisory firms including Institutional Shareholder Services are counseling them not to ratify Mr. Dudley's pay package at the company's annual meeting Thursday. "This proposed increase is both unreasonable and insensitive," said Ashley Hamilton Claxton, corporate-governance manager at Royal London Asset Management, which holds BP shares worth about $600 million. She plans to vote against Mr. Dudley's pay. BP defended the pay package. "Despite the very challenging environment, BP's safety and operating performance was excellent throughout 2015, and management also responded early and decisively to the steep fall in the oil price," a company spokesman said. Other executive pay packages shrank along with stock prices. Exxon Mobil Corp. released data Wednesday that showed CEO Rex Tillerson's salary rose 6% to $3 million in 2015 even as the company's shares lost 15% of their value. But Mr. Tillerson's total pay fell 18% to $27.3 million, due to a lower bonus, stock awards and interest-rate-related changes in his pension. For the past five years, oil giants Exxon, Chevron Corp., Royal Dutch Shell PLC and BP have paid their top bosses nearly $500 million in combined compensation, even though the companies' annualized returns for the period have undershot those of the S&P 500. In 2015, Chevron chief John Watson's pay, including salary, bonus and stock options, rose 3%, but with pension-benefit changes his total compensation fell by 15% to about $22 million. Most of Mr. Watson's pay rises and falls with shareholder value, based on stock prices, with added emphasis on safety and other factors aligned with good corporate governance, said Kurt Glaubitz, a company spokesman. "Overall, Mr. Watson's 2015 compensation package recognizes and reflects the value he continues to deliver to Chevron's stockholders," Mr. Glaubitz said. The salary and bonus of Anglo-Dutch Shell's CEO, Ben van Beurden, who is paid in euros, fell 13% to $5.5 million when translated into dollars. Mr. van Beurden's overall pay for 2015, including pension changes, tumbled 81%. Shell's profit for the year plunged 80%. "Shell's executive compensation reflects delivery of our strategy, measured by both short-term and long-term targets," said Jonathan French, a Shell spokesman. "There is a clear alignment between the company's performance and our compensation policies." Stockholders at Chevron, Exxon and Shell will get to vote on executive pay next month -- though the votes aren't binding. At those meetings, the companies are expected to outline their worst first-quarter performances in decades, analysts say. Including BP, the four biggest Western oil companies have laid off, or are in the process of shedding, more than 25,000 workers because of the downturn in energy prices. At the two dozen energy companies in the S&P 500 index, median pay, excluding pension changes, fell less than 1% from 2014 last year, according to an analysis by ISS Corporate Solutions Inc. That's far less than the cumulative 24% price decline for those companies. Executive compensation in other industries, except for retailing, increased last year. In their annual filings, the biggest oil companies take pains to explain the complexities of their senior executives' compensation, including performance pay tied to the company's share price and options that can take a decade to vest. Those incentives are paid out over the long term, but they often get counted as part of annual pay packages. Compensation packages at many energy companies are built to work well in most market conditions, but some were never set up to manage the impact of a crash in oil-and-gas prices, said John Roe, head of advisory at ISS Corporate Solutions. "Sometimes, that produces results that don't pass the smell test," he said. "When that happens, companies need to step back and make sure that they are more responsive and aligned with shareholders. When they don't, they will run into issues year after year." ISS hasn't issued its recommendations on whether shareholders should endorse or reject pay packages at Exxon, Chevron and Shell, but says it will do so in coming weeks. One reason for discrepancies between executive pay and stock performance is that BP and other oil companies reward executives based on relative shareholder returns. That can blunt the impact of rising or falling oil prices because payouts depend more on how a company performs relative to its peers, said Kevin Murphy, a professor at the University of Southern California's Marshall School of Business. Compared with the other three major oil companies, BP shares fell the least in 2015, dropping 11.7% including reinvested dividends, according to data from Morningstar. That is slightly ahead of Exxon's 12.6% share-price decline. Chevron's stock fell 16% last year, while Shell's was down 26% Credit: By Bradley Olson and Sarah Kent
Subject: Chief executive officers; Crude oil prices; Executive compensation; Petroleum industry
People: van Beurden, Ben Tillerson, Rex W Dudley, Bob
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BP PLC; NAICS: 211111, 324110, 447110; Name: Exxon Mobil Corp; NAICS: 211111, 447110
Classification: 2130: Executives; 6400: Employee benefits & compensation; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Apr 14, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780780813
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780780813?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
OPEC Trims View For Oil Production
Author: Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Apr 2016: C.1.
Abstract:
The Organization of the Petroleum Exporting Countries, a group of some of the world's biggest producers, forecast on Wednesday that a long-expected contraction in non-OPEC oil supply was shaping up to be steeper than expected.
Full text: OPEC said global oil production outside the cartel is falling more sharply than expected, as producers continue to retrench almost two years after crude prices started what has been their sharp descent. The Organization of the Petroleum Exporting Countries, a group of some of the world's biggest producers, forecast on Wednesday that a long-expected contraction in non-OPEC oil supply was shaping up to be steeper than expected. In March, it forecast non-OPEC output would fall by 700,000 barrels a day this year. It now estimates the drop will be 730,000 barrels. The downgrade was due to lower expectations for oil production from China's onshore mature fields and further declines in the U.S. and the U.K., where projects have been deferred because of lower oil prices. The new estimate doesn't represent a drastic revision to the group's non-OPEC output expectations. But oil traders have been fixated recently on how today's lower prices are affecting output. Many producers have been retrenching sharply, leading to growing expectations of a potentially sharp cutback in global supply that could help balance markets and buoy prices. While the steeper-than-expected drop could be bullish for oil prices, OPEC also warned of rising uncertainties over global oil demand. It also said Iran is fast ramping up its output. The new forecast comes as oil producers such as Russia and Saudi Arabia prepare to meet on Sunday in Doha, Qatar, to debate a possible output freeze -- which has been rejected so far by Iran -- in an effort to revive flagging crude prices. In its closely watched monthly report, OPEC cut its forecast for 2016 oil-demand growth by 50,000 barrels a day. Demand for the commodity now will rise by 1.20 million barrels a day to 94.18 million barrels a day, according to its projections. The downgrade is underpinned by slower economic momentum in Latin America and uncertainties in Chinese growth, OPEC said. "There is great uncertainty as to whether weakening economic activity in Latin America and signals of a slowdown in China will be reflected in oil-demand data, especially for China," the organization said. In particular, the Brazilian economy, the seventh largest in the world, has been hit by a bribery scandal involving state-owned oil giant Petrobras. Credit: By Benoit Faucon
Subject: Petroleum industry; Crude oil prices; Forecasts; Petroleum production
Company: Organization of Petroleum Exporting Countries--OPEC
Classification: 8510: Petroleum industry; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 14, 2016
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780780906
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780780906?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
BP Shareholders Reject Oil Giant's Pay Policy; Oil major signals it may have to reduce its dividend
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2016: n/a.
Abstract:
LONDON--BP PLC's shareholders rejected the company's executive pay policy, a stinging--though nonbinding--rebuke to Chief Executive Bob Dudley and his board.
Full text: LONDON--BP PLC's shareholders rejected the company's executive pay policy, a stinging--though nonbinding--rebuke to Chief Executive Bob Dudley and his board. Following the company's annual meeting Thursday, the oil giant said 59% of the votes cast were against the company's executive compensation decisions for 2015. That included a roughly 20% increase in Mr. Dudley's total pay for the year, a period during which the company lost $5.2 billion. Earlier in the day, the company also signaled in its clearest terms yet that it may have to reduce its dividend, as low oil prices continue to threaten the once-sacrosanct investor payouts across the industry. Both moves heap new pressure on Mr. Dudley and his board as BP tries to navigate low oil prices like the rest of the industry. It is also now contending with increasing shareholder dissatisfaction. BP shares closed 1.9% lower in London Thursday. Nonbinding shareholder revolts over a host of issues, including pay, are much more common these days than just a few years ago. A majority of Royal Dutch Shell PLC investors, for instance, symbolically voted against its executive pay package in 2009. But it was the first shareholder rejection over pay at BP, a British national champion that traces its roots back more than 100 years and is a widely held stock here and among global investors. Mr. Dudley's pay package struck a particular nerve in Europe, where executive compensation is broadly more modest than in the U.S. Amid historically low oil prices, BP and its competitors have slashed costs, reduced staff and canceled projects. Investors have been hit by falling share prices. Vocal shareholders opposing Mr. Dudley's pay have said it was the wrong time for a pay increase at the top. Fresh worries over BP's dividend could stoke that sentiment, as investors face up to their own potential pay cut. During the annual meeting, BP Chairman Carl-Henric Svanberg defended the pay package but said the board would review its executive-pay policy. He said the package was based on "outstanding" company performance during a difficult year. After the meeting, Mr. Svanberg said that despite the outcome, the company wouldn't adjust Mr. Dudley's pay for 2015. Related * BP's Azerbaijan Push Comes at a Cost (March 31) * U.S. Bid to Prosecute BP Staff in Gulf Oil Spill Falls Flat (Feb. 27) * Oil Slump Pressures Exxon, BP Results (Feb. 2) * BP to Cut About 4,000 Exploration and Production Jobs (Jan. 12) "It is a message, and we listen very carefully and we will continue to do so," Mr. Svanberg said on the sidelines of the meeting. "The remuneration policy is up for renewal next year regardless, but this means we will be much more careful and listen very carefully. We want to make sure we come back with something that is acceptable." Mr. Dudley last year received a $1.4 million cash bonus--up from about $1 million in 2014--and a doubling of his retirement savings from 2014, to $6.5 million. Mr. Dudley's salary of about $1.9 million was little changed from 2014, in line with a companywide freeze on executive salaries. Regarding the dividend, Mr. Svanberg didn't say a payout reduction was being considered. But he addressed broad investor worry that it might be in the future, saying the company could "revisit our financial framework" should prices remain low. "Our goal is to maintain the dividend but at the same time we must secure the future by investing wisely," he said, according to prepared remarks released by the company. "Be assured that we keep this balance under regular review. Should the oil price remain lower, longer than expected, we will need to revisit our financial framework." Other big oil companies, including ConocoPhillips and Eni SpA, have already moved to rein in payouts. But the industry's biggest players, Exxon Mobil Corp., Shell, BP and Chevron Corp., have so far kept their dividends intact , signaling they had the financial firepower to ride out the oil price downturn. BP and others are under less pressure now than earlier in the year, with oil prices having risen strongly in recent months. In his comments Thursday, Mr. Svanberg said the company expects the oil market to start to rebalance this year. Still, the dividend comments could increase worry by oil-company investors, who have watched as analysts lower their view of the industry's creditworthiness. For years--even when oil prices were high--some of the biggest companies borrowed heavily to cover capital costs and increasingly rich dividends. As recently as February, BP gave assurances it felt its dividend was safe. Chief Financial Officer Brian Gilvary said the "dividend remains sustainable," though he acknowledged that calculation could come under pressure if the company's view of the market changed. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Executive compensation; Chief executive officers; Investments; Wages & salaries
People: Svanberg, Carl-Henric
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 14, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780794771
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780794771?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Pacific Exploration to Negotiate Restructuring with Catalyst; The oil company is under pressure to cut its debt as it contends with slumping crude prices
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2016: n/a.
Abstract: None available.
Full text: Pacific Exploration & Production Corp. said Thursday it had agreed to work with Catalyst Capital Group Inc. on a restructuring deal aimed at easing the Canadian-Colombian oil company's cash crunch. Pacific, under pressure to cut its debt as it contends with slumping crude-oil prices and a shrinking market valuation, has been considering a number of buyout offers to avoid possible bankruptcy-court protection. The offer from Toronto-based private-equity fund manager Catalyst emerged as the front-runner among the proposals, but has faced strong opposition from some Pacific shareholders who argued the deal favors management over investors. Pacific's decision to negotiate with Catalyst comes after board members postponed a meeting on Sunday to discuss proposals after shareholders expressed concern over the independence of the process. Shareholders led by O'Hara Administration Co., which owns a 20% stake in Pacific, alleged the Catalyst deal benefited the company's co-chairmen but could leave shareholders with nothing, people familiar with the matter had previously said. Pacific said its decision to back the Catalyst offer follows a recommendation from an independent committee of its board. It said terms of the deal are still being completed and that there is no assurance a deal will be reached. Any restructuring deal will require approval by holders of two-thirds of Pacific's debt. The company said its operations are continuing normally as it pursues its restructuring. Pacific, whose assets are mostly in Colombia, has twice since January had to waive bond payments and has seen its share price collapse more than 98% to 76 Canadian cents (59 U.S. cents) on Wednesday from 2012. Ben Dummett and Sara Schaefer Muñoz contributed to this article. Write to Judy McKinnon at judy.mckinnon@wsj.com Credit: By Judy McKinnon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 14, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780816393
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780816393?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Norway Oil Fund Excludes 52 Coal-Exposed Companies
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2016: n/a.
Abstract:
Exclusions of companies are decided by the board of Norway's central bank, usually based on recommendations by the fund's Council of Ethics, but the coal-based exclusions were based on recommendations from Norges Bank Investment Management, the arm of the central bank which manages the fund.
Full text: OSLO--Norway's sovereign-wealth fund, the world's biggest by assets, said Thursday that it had excluded 52 coal-exposed companies from its portfolio following a coal ban imposed by the country's parliament last year. "The exclusions follow a first round of analysis by Norges Bank Investment Management. Further exclusions will follow in 2016," the fund said. The list of excluded companies included coal miners and coal-exposed utilities in the U.S., China, India, Canada, Chile, South Africa, Poland, Australia, Japan, the U.K., and the Philippines. The fund's move to exit coal-exposed companies is hailed by environmentalists and closely watched by other institutional investors. The Norwegian fund was one of the first major global investors to establish wide-reaching ethical guidelines and has excluded more than 100 companies since the first ethically-based exclusions more than a decade ago. The fund's Council of Ethics spends significant resources on investigations and engagement with companies ahead of exclusions. The fund has already exited many coal-exposed companies, partly due to a weak outlook for the sector, and partly because some companies' business models were seen as risky. Last year the central bank estimated that a full exit from coal would impact the fund's holdings in 120 companies, valued at around 55 billion kroner ($6.7 billion). Exclusions of companies are decided by the board of Norway's central bank, usually based on recommendations by the fund's Council of Ethics, but the coal-based exclusions were based on recommendations from Norges Bank Investment Management, the arm of the central bank which manages the fund. The $862 billion fund's mandate bars it from investing in unethical activity based on certain products, including cluster bombs, nuclear weapons and tobacco, as well as unethical behavior such as the use of child labor. The Norwegian parliament last year agreed on the new criterion to exclude coal, which took effect in February. The criterion requires the fund to exclude coal miners and coal-exposed utilities with more than 30% of their activities in coal or more than 30% of their revenue from coal. The fund said it had contacted all the companies that had been assessed for exclusion, allowing them to provide data and facts on their future strategies on coal. The fund said it had gathered data from market data vendors, company reports, internal analysis, non-governmental organizations and selected investment banks before making any exclusions. "The process of identifying companies for exclusion is complex," the fund said. "It is challenging to get good information on income and production at a sufficiently detailed level for all relevant companies." Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Central banks; Coal mining; Coal industry; Investment advisors; Institutional investments
Location: Norway Philippines Japan Chile Canada Australia Poland India United Kingdom--UK United States--US China South Africa
Company / organization: Name: Norges Bank Investment Management; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780852514
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780852514?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
PetroChina Unit Plans Startup of New Canadian Oil-Sands Plant; The project will mark the first production from PetroChina's investment in two oil-sands projects in northern Alberta
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2016: n/a.
Abstract:
TORONTO--The Canadian unit of one of China's largest oil and gas companies is on track to start operations at a new 35,000-barrel-per-day oil-sands plant later this year despite crude prices being below break-even levels for the project, a senior executive said.
Full text: TORONTO--The Canadian unit of one of China's largest oil and gas companies is on track to start operations at a new 35,000-barrel-per-day oil-sands plant later this year despite crude prices being below break-even levels for the project, a senior executive said. PetroChina Co.'s Brion Energy unit plans to begin steaming operations at its MacKay River oil-sands site in northern Alberta later this year and produce first oil in early in 2017, Bob Shepherd, Brion's executive vice president, said in an interview. "We fully expect to start it up this fall," pending final approval from parent company PetroChina, Mr. Shepherd said. The startup will mark the first production from PetroChina's nearly 5 billion-Canadian-dollar ($3.9 billion) investment in two oil-sands projects in northern Alberta. The MacKay River project received approval in 2011 from Alberta provincial regulators to produce up to 150,000 barrels of oil a day. Construction on the first phase of the project started the following year. The PetroChina unit initially planned to start first-phase production by 2015, but has run into delays, which the company attributes to construction issues. Mr. Shepherd said the nearly complete MacKay River plant, and another 250,000 barrel-a-day project called Dover that has yet to be built, require oil prices between $60 and $70 per barrel to break even. Crude is currently trading around $40 a barrel. Both projects use injections of steam to extract deposits of crude from horizontally drilled wells, a high-cost process that requires burning natural gas to fuel the steam generators. In 2014, Brion agreed to buy the remaining 40% stake it didn't already own in the Dover project from former partner Athabasca Oil Corp. But Mr. Shepherd said the company is open to selling stakes in its oil sands and other Canadian assets. "We're not wedded to having to own 100% and we're not wedded to have to be the operator," Mr. Shepherd said. "If someone really wanted to get involved in the oil sands either as a passive investor, or as a more involved investor, we'd certainly look at that," he said. The PetroChina unit bought 60% of Dover and MacKay River from Athabasca Oil in 2010. Two years later, it took full ownership of the MacKay River operation. In April 2014, Athabasca exercised a put option to sell its remaining stake, and a deal was reached later that year under which Brion paid C$50 million less than it had previously agreed to pay. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Petroleum industry; Oil sands; Energy economics; Natural gas utilities
Location: China
Company / organization: Name: Athabasca Oil Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 14, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1780941981
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1780941981?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Alberta Projects Record Budget Deficit; Decline in oil prices has reduced business investment, employment, incomes
Author: George-Cosh, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Apr 2016: n/a.
Abstract:
The deficit spurred the province's government, the first under the Liberal Party after 12 years of right-leaning Progressive Conservative rule, to raise income and sales taxes while an overhaul in government spending is expected to lead to hundreds of public sector job cuts.
Full text: The oil-rich Canadian province of Alberta on Thursday said it projected a record budget deficit of 10.4 billion Canadian dollars ($8.0 billion) this fiscal year, as the commodity swoon continued to weigh on government revenues from crude royalties and income tax revenues. Alberta has been hit particularly hard over the past year following a swift decline in oil prices which has reduced business investment, employment and incomes in the energy-rich province. The sharp decline in oil prices weighed on Canada's economy as the federal government announced plans last month to propose an aggressive fiscal policy with new spending measures while running budget deficits aimed at spurring economic growth. The Alberta government's fiscal deficit projections are up from a shortfall of C$6.4 billion in 2015-2016 as its gross domestic product shrunk 1.5% in real terms last year. Its GDP is expected to fall a further 1.4% this year due to sharply lower oil prices--the first time since 1982-1983 that the province's economy has seen two consecutive years of negative growth. Alberta's economy is expected to rebound by 1.9% in 2017. Alberta said lower oil prices will continue to affect government revenue, with nonrenewable-resource revenue budgeted at just C$1.4 billion in 2016-2017, a level not seen in over 40 years. To help manage the drop in revenue, government spending increases will be reduced to the lowest level in years, with health care and education taking the brunt of the spending cuts. A carbon levy aimed at reducing greenhouse-gas emissions will be introduced next year and is expected to raise C$2.4 billion when fully implemented. "Faced with a 90% drop in nonrenewable resource revenue, Albertans are confronted with a choice that will have profound consequences for generations to come," said Alberta finance minister Joe Ceci in a statement. The budget also assumes West Texas crude prices will settle around $42 a barrel in 2016-2017 while steadily rising to $64 in 2018-2019. The provincial government of Newfoundland and Labrador, also heavily reliant on income from oil royalties, announced a fiscal 2016-2017 deficit of C$1.83 billion earlier on Thursday. The deficit spurred the province's government, the first under the Liberal Party after 12 years of right-leaning Progressive Conservative rule, to raise income and sales taxes while an overhaul in government spending is expected to lead to hundreds of public sector job cuts. Write to David George-Cosh at david.george-cosh@wsj.com Credit: By David George-Cosh
Subject: Government spending; Petroleum industry; Economic development; Budget deficits; Royalties; Crude oil prices; Economic growth; Gross Domestic Product--GDP; Oil & gas royalties
Location: Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 14, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781026882
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781026882?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Mexico's Alfa Out of Pacific Exploration Restructuring; Hurt by collapse in oil prices, Pacific agrees to negotiate restructuring with Catalyst Capital and creditors
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexican industrial conglomerate Alfa SAB made proposals for a restructuring of Canadian-Colombian oil firm Pacific Exploration & Production Corp. but is no longer involved in the process, a company official said Thursday. Monterrey-based Alfa, which has a 19% stake in Pacific, made serious proposals for improving Pacific's financial situation, but the oil company chose a different route, Alfa chief financial officer Ramón Leal said in a conference call with reporters. Pacific said earlier Thursday that it agreed to negotiate a restructuring with private-equity investment firm Catalyst Capital Group Inc. and with creditors, following a recommendation from an independent committee of Pacific's board. Terms are still being worked on and there is no assurance a deal will be reached. Pacific, which has most of its assets in Colombia, borrowed heavily and ran into financial difficulties when oil prices collapsed. The company has twice waived bond payments since January. "Alfa wasn't chosen to participate in this restructuring process and therefore we're totally out of the process," Mr. Leal said. He declined to give details of what Alfa had put forward, citing legal reasons, but said Alfa never made a binding proposal. Alfa, which in 2015 made an unsuccessful bid with Harbour Energy Ltd., to buy Pacific, has already accounted for its losses on the equity investment. "The book value of our stake in Pacific today is $40 million, when it had been worth over $1 billion," Mr. Leal said. With Pacific's equity value now close to zero and its debt about $5.5 billion, "in practical terms the owners of the company are the creditors," he added. Alfa swung to a net profit of $142 million in the first quarter from a $127 million net loss a year before, thanks to lower financial expenses and a 24% jump in operating profit to $376 million. Sales in the quarter fell 7% to $3.81 billion. Earnings before interest, taxes, depreciation and amortization rose 10% on higher margins in petrochemicals, increased profit in auto parts and the consolidation of telecommunications company Axtel, which Alfa acquired mid-February and merged with its unit Alestra. Those positive results were partly offset by flat performance at processed food unit Sigma, and a decline in sales at energy unit Newpek because of lower oil prices. Newpek's oil price averaged $33 a barrel in the quarter, $16 a barrel less than a year before. Newpek and its partners had 625 wells operating in Eagle Ford Shale in Texas at the end of the quarter, up from 513 a year before. They will bring three more online in the second quarter before suspending new drilling until prices improve. In Mexico, where it operates under a service contract with state oil company Petróleos Mexicanos, Alfa has shut many wells as a result of lower oil prices, ending the quarter with 68 from 150 a year before. Mr. Leal said Alfa would continue to look at other options in energy in Mexico and in Latin America, aside from its operations in the U.S. "We're not losing interest in the industry." Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781036399
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781036399?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Edge Up Ahead of Producers Meeting Sunday; June Brent crude on London's ICE Futures exchange rose $0.06 to $43.90 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
According to the Energy Information Administration, U.S. crude production is forecast to average 8.6 million barrels a day in 2016, lower than the 9.4 million barrels a day average in 2015.
Full text: Crude oil prices made minor advances in early Asia trade Friday ahead of a key meeting between major producers, who are scheduled to discuss a potential production freeze this weekend. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $41.57 a barrel at 0212 GMT, up $0.07 in the Globex electronic session. June Brent crude on London's ICE Futures exchange rose $0.06 to $43.90 a barrel. Oil prices have been fluctuating since four big producers--Russia, Saudi Arabia, Qatar and Venezuela--in mid-February proposed a coordinated effort to cap future production as a way to prop up prices. News of the proposed measure lifted prices, which were hovering around 12-year lows at that time. Although prices have risen nearly 30% since the Feb. 16 meeting, they have fallen about 60% from June 2014 when prices were above $100 a barrel. About a dozen major producers are scheduled to meet Sunday to discuss measures to support prices. There is little consensus over the benefits of a potential freeze on production. Some analysts say freezing production at the January or the February levels will help kickstart a price correction, while others say that with many producers already pumping at or close to record levels and Iran cranking up production, a freeze at the latest levels would do little to alleviate the persistent glut. In its closely watched report, the world's energy watchdog International Energy Agency said "any deal struck will not materially impact the global supply-demand balance" during the first half of 2016 as both Saudi Arabia and Russia are already producing at or near record rates. Riyadh pumped 10.19 million barrels a day in March, a decline of 30,000 barrels a day but still close to its peak levels, while Russia output hit a three-decade high in March at 10.91 million barrels a day, according to official statistics. Even if a deal is struck, there is the problem of enforceability, said Capital Economics, noting in past when a quota agreement has been reached, some players still chose to ignore it because the pact isn't binding. "With or without an OPEC/non-OPEC freeze, the trend of lower global supply growth is already underway. U.S. oil supply is declining and globally the fundamentals are tightening," said Wood Mackenzie in a note. According to the Energy Information Administration, U.S. crude production is forecast to average 8.6 million barrels a day in 2016, lower than the 9.4 million barrels a day average in 2015. In March alone, U.S. crude output declined 90,000 barrels a day below the previous month's level, the EIA estimates. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 8 points to $1.5064 a gallon, while May diesel traded at $1.2578, 35 points higher. ICE gasoil for May changed hands at $375.00 a metric ton, down $1.75 from Thursday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Petroleum industry
Location: Qatar Russia Venezuela United States--US Asia Saudi Arabia
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781051804
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781051804?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Downturn Claims Another Oil and Gas Producer
Author: Rizzo, Lillian; Olson, Bradley
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Apr 2016: B.3.
Abstract:
Falling oil prices have roiled the oil and gas industry since the summer of 2014. Since the downturn began, about 60 North American oil and gas companies have filed for bankruptcy, involving nearly $20 billion in debt, according to the law firm Haynes & Boone.
Full text: Texas-based Energy XXI Ltd. filed for bankruptcy Thursday, becoming the latest heavily indebted oil-and-gas company to collapse amid volatile fuel prices. The company sought chapter 11 protection after striking a tentative deal on the terms of a $1.45 billion debt-for-equity swap with a group of its bondholders. Under a restructuring term sheet filed in U.S. Bankruptcy Court in Houston, the bondholder group -- which includes Covalent Capital, DW Partners and Franklin Advisers Inc. -- will swap their second-lien debt for 100% of the shares in a reorganized company subsidiary. The group backing the debt-for-equity swap, which also includes Mudrick Capital, Oaktree Capital Management and Pine River Capital Management, own debt that was issued by the subsidiary. Lower ranking bondholders, owed about $1.2 billion, will receive warrants for about 10% of the stock in the reorganized company under the proposed plan. Texas oil man John D. Schiller, who founded the Energy XXI in 2005, will stay on as chief executive of the new company. Energy XXI Ltd. will be liquidated. The proposed deal has the backing of bondholders owning about 63% in face amount of the second-lien debt. To win approval of a chapter 11 plan, the company will need to rally a little more support. Bankruptcy law requires approval from a group of creditors -- two-thirds in amount and more than one-half in number -- to agree to the deal. Falling oil prices have roiled the oil and gas industry since the summer of 2014. Since the downturn began, about 60 North American oil and gas companies have filed for bankruptcy, involving nearly $20 billion in debt, according to the law firm Haynes & Boone. For Energy XXI, the oil slump hit shortly after the company used debt to buy EPL Oil & Gas Inc. in a $1.53 billion deal that made Energy XXI the largest publicly traded producer of crude in the shallow waters of the Gulf of Mexico. After that deal, Mr. Schiller extolled the virtues of drilling offshore as long as oil prices remained relatively high. The company, founded in 2005, expanded through a series of acquisitions in Louisiana and the Gulf of Mexico. It expects operations to continue during the financial restructuring process, including paying royalty and surety obligations. The bankruptcy agreement calls for Energy XXI to file a reorganization plan by May 16, and have it approved by U.S. Bankruptcy Judge David Jones, who is overseeing the case, no later than Aug. 8. The company is seeking emergency approval to keep paying its workers and suppliers pending the bankruptcy case. Judge Jones has scheduled a hearing for Friday in Houston to consider those requests. Credit: By Lillian Rizzo and Bradley Olson
Subject: Petroleum industry; Offshore drilling; Debt financing; Bankruptcy reorganization
Company / organization: Name: EPL Oil & Gas Inc; NAICS: 211111; Name: Energy XXI USA Inc; NAICS: 211111
Classification: 8510: Petroleum industry; 3100: Capital & debt management; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Apr 15, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781094160
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781094160?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Indonesia Bans New Palm Oil and Mining Operations; Indonesia's President Widodo vows to improve efforts to curb fires and deforestation
Author: Otto, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
Foreign officials and environmental activists have criticized Indonesia for the rapid loss of its tropical rainforest, mainly on the islands of Sumatra and Borneo, much of it tied to land conversion to support palm oil and pulp production.
Full text: JAKARTA--Indonesia will temporarily bar new palm oil and mining operations to help protect the country's vast tropical forests following international criticism over its environmental stewardship. A spokesman for Indonesian President Joko Widodo said on Friday that the ban would likely take effect this year and last for an undetermined time. The moratorium would halt new permits for palm oil and mining operations, both mainstays of Indonesia's economy. Mr. Widodo suggested growers could double production on existing lands if they farmed more efficiently. Foreign officials and environmental activists have criticized Indonesia for the rapid loss of its tropical rainforest, mainly on the islands of Sumatra and Borneo, much of it tied to land conversion to support palm oil and pulp production. Dry-season fires used by farmers and companies to clear forest and scrublands regularly send toxic smoke billowing throughout the region, raising air pollution levels in neighboring countries such as Singapore, Malaysia, Thailand and the Philippines. Mr. Widodo vowed during and after global climate talks in Paris last year to improve Indonesia's record on its rain forests. Environmental group Greenpeace welcomed the news but expressed skepticism about its implementation because the ban's authority rests on a presidential decree, which carries less weight than a law. The group pointed to a current ban on palm oil licenses in peatland and some forest areas that it says isn't adequately being enforced. "We have learned from weak enforcement of the existing moratorium that a presidential instruction lacks teeth," said Kiki Taufik, forest campaigner for Greenpeace in Indonesia. The moratorium would come as Mr. Widodo struggles to restore Southeast Asia's largest economy to higher growth rates amid slack demand from China and budget cuts it has imposed. The economy grew by 4.7% last year, greatly underperforming the rate of growth it enjoyed a few years ago during a commodities boom. Palm oil has grown into a $20 billion export industry in Indonesia, fed by a global boom for the edible oil used in products from toothpaste and candy bars to cleaning products. Growers want to expand from production of 32.5 million metric tons of palm oil last year to 40 million by 2020, an effort they have said requires adding millions of hectares of lands for production. The Indonesian Palm Oil Association said it was still seeking details about the plan and highlighted the importance of the industry for export earnings and millions of jobs. "The palm oil sector is a strategic sector that contributed to exports (of almost) $19 billion in 2015, and this figure is much higher than foreign exchange from exports of oil and gas," the association said. Golden Agri-Resources, the world's second-largest palm oil company and a unit of Indonesian conglomerate Sinar Mas, supported the government's move. "Any government initiative that is focused on intensification over land expansion is to be applauded," said its spokeswoman Anita Neville. Ms. Neville said that the company's yields are already among the sector's highest, but that the challenge is to spread capacity gains among millions of smallholders. Mining experts said the move wasn't immediately a cause for alarm and said that a steadily extending moratorium in forest areas had led most companies to understand that forests are effectively off limits. Many companies in sectors like coal have meanwhile cut back due to low global prices and demand. Supriatna Suhala, executive director of the Indonesian Coal Mining Association, said the moratorium would allow the government to improve governance and monitoring and help reduce illegal mining. "In the situation of prolonged low prices of mining products due to significant oversupply, presumably a lot of (our) members will agree with the policy," he said. Write to Ben Otto at ben.otto@wsj.com Credit: By Ben Otto
Subject: International markets; Supply & demand; Forests; Bans; Moratoriums; Vegetable oils; Environmental stewardship; Exports
Location: Indonesia
Company / organization: Name: Greenpeace; NAICS: 813312, 813940
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781103979
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781103979?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Russia Opens Up New Oil Front: India; Rosneft plans sending deliveries to India's second largest oil refinery
Author: Williams, Selina; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
The Russian oil company's boss, Igor Sechin, has said the deals between Rosneft and Essar, along with recent stake sales in its prized east Siberian oil fields to Indian companies, were "strategic" agreements that give the Russian company access to the Indian market and build a bridge between the two countries.
Full text: Russia is opening a new front in its battle for a bigger share of the global oil market: India. Later this year, Russian state-controlled oil giant OAO Rosneft plans to start sending its first regular deliveries of crude to India's second largest oil refinery. That follows Rosneft's decision to buy a big stake in India's Essar Oil, which owns the refinery and a network of around 2,000 gas stations. The purchase is set to be completed this year. The deal gives Russia a small, but strategic, beachhead in what is becoming one of the most important crude-oil markets in the world. Saudi Arabia currently dominates the India market, supplying about a fifth of India's imports, according to data from consultancy FGE. But the kingdom faces growing competition from Russia and Iran as they and other big producers, including Iraq and Kuwait, duke it out for customers amid today's low prices . The world's biggest oil producers have jostled to out-pump and underprice each other to lure customers in markets around the world. The competition has contributed to a dramatic drop in the price of crude over nearly two years, triggered in part by rising U.S. output. In past periods of oversupply, the Organization of the Petroleum Exporting Countries, a cartel that pumps a bit more than one in three barrels produced each day around the world, stepped in to throttle back output to buoy prices. But in late 2014, OPEC said it wouldn't do that because it would risk losing market share, as Russia and others continued to pump flat out. OPEC and Russian officials are planning to meet Sunday in Qatar to discuss a detente: a proposed freeze in production that might help bolster prices. No matter what happens in Qatar, India is set to rival China as one of the world's biggest consumers of oil. The country, which relies on imports for about three quarters of its oil demand, is the world's third largest energy consumer, behind China and the U.S. It imports about four million barrels of crude a day. India's consumption looks set to rise relatively fast. While U.S. and European energy demand is set to stagnate or fall, and as China shifts away from energy-intensive, heavy manufacturing to a more consumer-focused economy, oil demand in India is expected to grow 4.2% a year over the next five years. That contrasts with only 3.4% growth in China. By 2040, the International Energy Agency says that India's oil imports could nearly double to around 7.2 million barrels a day, spurred by a growing population and a modernizing economy. "Everybody is trying to get a big stake in India--it is the biggest growing market in Asia," said Amrita Sen, chief oil analyst at London-based consultancy Energy Aspects. Rosneft's deal to supply Essar would translate into a roughly 5% share of import, putting it about on par with Iran, another big, long-term India supplier. The Russian oil company's boss, Igor Sechin, has said the deals between Rosneft and Essar, along with recent stake sales in its prized east Siberian oil fields to Indian companies, were "strategic" agreements that give the Russian company access to the Indian market and build a bridge between the two countries. "China's role has diminished but the share of India, other Asian countries and Africa are gradually growing," Mr. Sechin told oil executives in a speech in London in February. Russia has pushed hard into China , too, at the expense of Saudi Arabia, and it is also gaining market share in South Korea and Japan, according to FGE. Saudi Arabia, on the other hand has tried to replace Russian crude in some European markets, though it is had little success so far. Executives of state-controlled Saudi oil company Saudi Arabian Oil Co., better known as Saudi Aramco, are responding with a charm offensive in India. Aramco plans to open an office in India this year. Aramco executives have also started talking to key buyers there before issuing monthly prices for the crude they will be taking, according a person familiar with the matter. "Aramco is changing its attitude toward its customers," this person said. "Before it was a take it or leave it attitude, but now Aramco wants to be closer to its buyers." Aramco is also looking into investing in a new refinery in India, this person said. Representatives of Aramco and the Saudi oil ministry didn't return requests for comment. Other players are eyeing expansion in India. In October, Ali Kardor, the head of investments at the National Iranian Oil Co., said the state oil company was in early talks to buy a stake in an Indian refinery of its own. "India is the market the world is looking at in the future," said Dharmendra Pradhan, India's minister of state for petroleum and natural gas, in an interview last month. --Vibhuti Agarwal and Benoit Faucon contributed to this article. Write to Selina Williams at selina.williams@wsj.com and Summer Said at summer.said@wsj.com Credit: By Selina Williams and Summer Said
Subject: Prices; Market shares; International markets
Location: Russia Iran United States--US India China Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: OAO Rosneft; NAICS: 324110; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781104023
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781104023?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Slide in Volatile Trade; Investors doubt that major producers can now agree a production freeze at a meeting on Sunday
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
Three-straight days of losses are now foreshadowing what may become of the oil markets after a highly anticipated meeting Sunday between leaders of the Organization of the Petroleum Exporting Countries and non-OPEC producers, primarily Russia, analysts said.
Full text: Oil prices are on course for their largest slide in nearly two weeks on doubts that major producers can agree on supply curbs when they meet over the weekend . Three-straight days of losses are now foreshadowing what may become of the oil markets after a highly anticipated meeting Sunday between leaders of the Organization of the Petroleum Exporting Countries and non-OPEC producers, primarily Russia, analysts said. The possibility that the biggest producers in the world would start working together to boost prices has spurred oil's biggest rally in years, but many believe that a deal is unlikely and oil may selloff again after the meeting. More on the oil market * Heard on the Street: Oil's Rally Is Running on Fumes * Doha Oil Meeting: What to Watch * Russia Opens Up New Oil Front: India Light, sweet crude for May delivery fell $1.29, or 3.1%, to $40.21 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $1.36, or 3.1%, to $42.48 a barrel on ICE Futures Europe. Both benchmarks were up slightly earlier but dropped after a report that Iran's oil minister, Bijan Zanganeh, won't attend the oil producers' summit Sunday in Doha, Qatar. Bearish traders have been pointing to Iran's reluctance as a big problem. Some OPEC officials have said no deal will happen without Iran, but its leaders plan to double production to 4 million barrels a day by March now that international sanctions against its exports have ended. Analysts at Citigroup Inc. said Friday morning to expect comments from Russian's energy minister to prove true, that at best it will be a gentlemen's agreement with no binding commitments. That makes the Doha meeting relevant only if there is no agreement, according to Citigroup's team, led by Ed Morse. "If there is no agreement, then expect a sharp oil market selloff on Monday," they said. "If there is an agreement in name but market participants realize it has no teeth, (expect) a slower selloff." Oil prices have jumped by more than a third since the idea of limiting production at current levels was first floated in mid-February but the rally has stalled in recent weeks amid uncertainty about the outcome of the talks. Even if the meeting ends with a deal to freeze output, many analysts question whether it would be enough to alleviate the global glut of crude that has pressured prices for the past two years. The International Energy Agency said in a report on Wednesday that "any deal struck won't materially impact the global supply-demand balance" during the first half of 2016 as both Saudi Arabia and Russia are already producing at or near record rates. Saudi Arabia pumped 10.19 million barrels a day in March, a decline of 30,000 barrels a day but still close to its peak levels, while Russia's output hit a three-decade high in March at 10.91 million barrels a day, according to official statistics. "Our expectations for the meeting are low. Although an agreement on production caps is likely to be reached, it will probably not include any concrete figures or obligations, let alone any sanctions to be imposed in the event of noncompliance," analysts at Commerzbank said. "In other words, the meeting will do nothing to change the current situation on the oil market." On Friday, traders were also digesting news that China's economy, the world's second biggest oil consumer, slowed further in the beginning of the year. Chinese gross domestic product expanded by 6.7% year-over-year in the first quarter, in line with forecasts and down from a 6.8% gain in the previous quarter. While this represented the slowest quarterly growth for China since the height of the financial crisis in 2009, Beijing's policies to revive growth with tools such as lending and construction appeared to gain traction in March. Later in the day, Baker Hughes Inc. will release the latest U.S. oil rig count numbers, viewed as a rough proxy for activity in the industry. Last week, Baker Hughes said the count fell by eight to 354 in the previous week and there are now about 72% fewer rigs from a peak of 1,609 in October 2014. Gasoline futures recently fell 2.9% to $1.4625 a gallon. Diesel futures fell 3.6% to $1.2088 a gallon. Benoit Faucon, Jenny W. Hsu and Mark Magnier contributed to this article Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Timothy Puko and Georgi Kantchev
Subject: Crude oil prices; Petroleum industry; International markets; Supply & demand
Location: Russia Iran
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Citigroup Inc; NAICS: 551111; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781104073
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781104073?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Goodrich Petroleum Files For Chapter 11 Bankruptcy Protection; Oil company joins many others in the industry seeking debt-for-equity swaps
Author: Gleason, Stephanie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
Or will they need to liquidate their positions?" Debt-for-equity swaps provide another benefit for cash-strapped oil and gas companies, said Jeff Jones, managing director of investment bank Blackhill Partners.
Full text: Goodrich Petroleum Corp. filed for chapter 11 bankruptcy Friday with investment firms slated to pick up the pieces, as yet another company sought court protection amid the shakeout in the oil and gas industry. Houston-based Goodrich, an oil and gas producer which struggled to cut its debt as crude prices tumbled, has a deal in place that would erase $400 million in debt from its books through a swap with a group of investors that own bonds the company issued last year. The Goodrich bondholders, who include Franklin Advisors Inc., Penn Capital Management and Jefferies LLC, have agreed to forgive $175 million in debt in exchange for ownership of the company. The deal is part of a larger bankruptcy-exit plan that would pay off or carry over $40 million of higher-ranking senior bank debt and wipe out $224 million in unsecured bonds. Related * Goodrich Bankruptcy a Warning to Oil-Stock Buyers * Activist Funds Wounded by Former Shale-Boom Star SandRidge Goodrich's bankruptcy deal mirrors those proposed recently by other struggling oil producers as the energy slump transforms a U.S. industry once dominated by Texas oil men into one controlled by financial firms from across the nation. Falling oil prices have roiled the industry since the summer of 2014. Since that time, about 60 North American oil and gas companies have filed for bankruptcy, involving nearly $20 billion in debt, according to the law firm Haynes & Boone. On Thursday, Houston's Energy XXI Ltd. filed for bankruptcy to complete a debt-for-equity swap with a group of bondholders that includes Oaktree Capital Management. Denver-based Venoco Inc . filed for bankruptcy last month after striking a deal with Apollo Global Management and MAST Capital Management that will erase nearly $1 billion in debt. Energy & Exploration Partners Inc., Magnum Hunter Resources Corp. and New Gulf Resources LLC are among other energy companies that have brokered similar deals. The rising number of debt-for-equity swaps is due to lenders' unwillingness to accept the fire-sale prices that potential buyers are offering for oil assets, according to Ian Peck, head of Haynes & Boone's bankruptcy practice. Market Talk Goodrich Bankruptcy a Warning to Oil-Patch Stock Buyers. Goodrich Petroleum's Chapter 11 filing should act as a warning for stock investors who have been quick to pour billions of dollars into North American energy-and-production companies that have rushed to the equity markets to raise money the past two years amid oil's slump. Goodrich sold about $50 million last year at $4.15; it closed Thursday at 5c. This isn't the first time buyers of oil-and-gas companies' secondaries have been hurt: Emerald Oil filed for bankruptcy protection in March after last year selling $27.5 million of new shares. But thanks to oil's recent bounce, investors who have taken part in offerings this year are doing well overall, with most positive since the respective offerings. While many companies are likely to survive this downturn, Goodrich's bankruptcy can be read as a cautionary tale. --Corrie Driebusch, 9:40 a.m. Goodrich Bankruptcy Cements Loss for New Buyers. Goodrich Petroleum becomes the second North American energy producer to file for Chapter 11 after selling new shares in last year's wave of so-called follow-on stock offerings. Collectively, the roughly $18 billion of new shares North American energy producers sold last year to bolster their balance sheets were down about $3 billion through Thursday's close, according to a WSJ analysis of Dealogic data and securities filings. Losses are deepening in today's energy pullback as oil declines ahead of Sunday's Doha meeting. --Ryan Dezember, 11 a.m. Market Talk is a stream of real-time news and market analysis that is available on Dow Jones Newswires. Although some oil traders believe crude prices have bottomed out, others are striking a more cautious note as the world's biggest oil exporters meet this weekend in Doha to discuss how to end the price rout. The question, Mr. Peck says, is "are these new owners--the banks and bondholders--willing to hold the equity as long as it takes? Or will they need to liquidate their positions?" Debt-for-equity swaps provide another benefit for cash-strapped oil and gas companies, said Jeff Jones, managing director of investment bank Blackhill Partners. "If you convert enough debt to equity, then there is some room for drilling budgets to be inserted into these reorganization plans," he said. For Goodrich Petroleum, which operates in Texas, Louisiana and Mississippi, Friday's bankruptcy filing caps a yearlong effort to reduce leverage and raise liquidity to weather low prices. Last March, the company embarked on several money-raising efforts, including the issuance of a fresh series of bonds worth $100 million to its now owners-to-be. It also raised $47.5 million from the sale of now-worthless common stock. In September, the company pulled in another $110 million through an asset sale. In the fall, Goodrich sought to cut its debt with two bond exchanges. The first, on unsecured bonds, exchanged $72.1 million in 2032 bonds for $36 million in new 2032 bonds. The second, on the junior bonds that are being converted to equity, exchanged $158.2 million in 2019 bonds for $75 million in junior bonds. As the energy slump continued into the new year with U.S. benchmark West Texas Intermediate dipping below $30 a barrel in February, Goodrich needed a further reduction of its debt. It sought to shell out more preferred shares and launched another bond exchange. It also opened negotiations with junior bondholders regarding an exchange of their debt and went to stockholders for authorization to issue 400 million more shares of common stock. This time, however, the out-of-court refinancing attempts failed. Shareholders were unwilling to allow the common-stock issuance and not enough unsecured bondholders agreed to the second exchange. Goodrich opted to skip many interest payments on its bonds in March, setting the clock ticking on reaching a deal with investors. The clock ran out Thursday, but by then it had the framework of its deal with bondholders, which it plans to implement in bankruptcy court. The company has begun soliciting votes from creditors on its bankruptcy-exit plan, which is the broader plan that embodies its swap deal with junior bondholders. The deadline for creditor votes is May 6, after which it will ask a bankruptcy judge to approve the plan. Alex MacDonald, Jacqueline Palank, Corrie Driebusch and Ryan Dezember contributed to this article. Write to Stephanie Gleason at stephanie.gleason@wsj.com Credit: By Stephanie Gleason
Subject: Bankruptcy; Petroleum industry; Prices; Investments; Bankruptcy reorganization; Equity; Energy industry; Natural gas utilities
Location: United States--US
Company / organization: Name: Energy & Exploration Partners Inc; NAICS: 211111, 211112; Name: Jefferies LLC; NAICS: 523110; Name: Haynes & Boone; NAICS: 541110; Name: Oaktree Capital Management LLC; NAICS: 523120, 523930, 523999; Name: Goodrich Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781115059
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781115059?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Gas Glut Hands Pricing Power to Buyers; Many buyers are questioning the industry practice of contracting long-term gas supply deals linked to oil prices
Author: Strumpf, Dan; Stewart, Robb M
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract: None available.
Full text: PERTH, Australia--As gas exporters from the U.S. to Australia ramp up their output, the gulf between buyers and sellers over prices for the energy source is widening. A growing glut of exported natural gas coming onto world markets is handing pricing power to buyers such as power utilities. They are questioning the long-held industry practice of contracting long-term gas supply deals linked to oil prices, pushing instead for shorter and more flexible deals that reflect the world's excess supply and currently low market prices. That is bad news for producers, from oil majors like Royal Dutch Shell PLC to state-owned behemoths like Malaysia's Petroliam Nasional Bhd., known as Petronas. Such companies have plowed billions into massive and complex plants that chill gas into liquid form for export by sea, and now need prices to stay high to ensure an adequate return on their investments. While companies recognize the need to accept different ways of pricing their gas, they argue gas buyers are being unrealistic about how much they will need to pay. "Markets evolve...I don't need to be proscriptive in what that pricing mechanism might be, but it will have to be sufficient to underpin new development," said John Watson, chief executive of Chevron Corp., which spearheaded the $54 billion Gorgon LNG project in western Australia, which has just produced its first gas. "Right now customers and buyers aren't in that space," Mr. Watson said at a major industry conference in Perth this week. Much of the world's new supply of liquefied natural gas, usually known as LNG, had been projected to flow through Asia, where many countries are looking to shift power generation away from heavily-polluting fuels like coal. But appetite in this region hasn't grown as strongly as expected as economies in China and elsewhere cool. The average spot price for LNG slumped by 39% in Asia in the past year to $4.460 per million British thermal units in April, according to price reporting agency Platts. In the U.S., benchmark natural gas closed Thursday at $1.97 per mmBTU, down just 27% from a year ago. "Asia has always been regarded as a bottomless pit, but now seems set to confound expectations," said Anne-Sophie Corbeau, a fellow at King Abdullah Petroleum Studies and Research Center in Riyadh. For sure, global trade in LNG is still expected to grow to as much as 420 million metric tons a year by 2020, up to 40% higher than in 2014, Ms. Corbeau said. About 40% of the new LNG export capacity will come from the U.S., which a decade ago was expected to become a bigger gas importer than Japan. The problem is that demand isn't keeping pace: The LNG market has been oversupplied since late 2014. That is expected to continue: The global gas market could be left with 70 million tons in uncontracted supply by 2021, analysts at Wood Mackenzie now estimate. That is enough to supply South Korea, China and India for a year. Buyers also argue linking gas contracts to oil prices is outdated, given the differing dynamics in each market: Gas is used far more for power generation than oil. The U.S.'s rise as an exporter is a further reason the oil peg may wither, since sales from there tend to be benchmarked to gas prices at Henry Hub, a delivery point in Louisiana. Already, sales of LNG on the spot market and via short-term contracts lasting less than four years had risen to 29% of trade in 2014 from 5.4% in 2000, and are likely to grow further even as the volume of gas trading gas also rises, Ms. Corbeau said. "People are understandably more cost conscious and expecting the price of LNG to reflect more adequately what is going on in the marketplace," said Yuji Kakimi, president of fuel procurement at JERA Co., a joint-venture between two big Japanese utilities that has emerged as the world's largest buyer of LNG. He said JERA now plans to buy LNG using contracts of varying length, and move away from using oil as a pricing reference. LNG producers, though, prefer long-term purchase agreements--sometimes lasting 20 years or more -- to lock in revenue in order to secure funding for their expensive production facilities. Industry executives, such as Ben van Beurden, CEO of Royal Dutch Shell PLC, said much of global trade in LNG trade will continue to be underpinned by long-term supply deals. "If I were to be in their shoes, I'd try to have a mix of these types of formulas in order to cover the various possibilities for the evolution of the gas price and the oil price," Patrick Pouyanné, CEO of France's Total SA, said at the Perth conference. Write to Dan Strumpf at daniel.strumpf@wsj.com and Robb M. Stewart at robb.stewart@wsj.com Credit: By Dan Strumpf and Robb M. Stewart
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781141081
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Carlyle Angles for Oil Deal --- Private-equity firm looks to outflank GE for assets from Halliburton and Baker Hughes
Author: Mattioli, Dana; Dezember, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Apr 2016: B.1.
Abstract:
Oil-field-services companies sell supplies and advice to energy producers and provide services such as drilling and hydraulic fracturing, the rock-cracking process that has enabled a boom in U.S. oil and gas production. Since Halliburton and Baker Hughes agreed to combine, the industry has faced severe setbacks as persistently low crude prices have slashed demand.
Full text: Private-equity firm Carlyle Group LP is in serious talks to buy a package of oil-field-services businesses from Halliburton Co. and Baker Hughes Inc. that could be valued at more than $7 billion, as the energy giants seek to overcome a Justice Department challenge to their planned merger. Talks between Carlyle and the companies are far along, though not yet exclusive, people familiar with the matter said. The talks mark a shift for Halliburton and Baker Hughes, which for months have been focused on reaching a deal to sell the assets to General Electric Co. GE and the energy companies have had problems agreeing on a price for the assets, some of the people said. GE is still in the mix, they added. Carlyle's specialty, though, is creating stand-alone businesses from castoff units of larger companies. The need for Baker Hughes and Halliburton to strike a divestiture deal took on increased urgency last week when the Justice Department filed an antitrust lawsuit challenging their $35 billion proposed deal, arguing it would threaten price increases and reduce innovation in the oil-field-services industry. The two sides agreed to the deal in November 2014. As always, the talks with Carlyle could fall apart before an agreement is reached, and even if there is one, there is no guarantee the government won't stand in the way. Last week, Justice Department antitrust chief Bill Baer said, "There's no fix to this transaction." He also said the gap between the two sides was "a chasm" and that settlement talks were never really under way because the government and the companies fundamentally disagreed on the competitive impacts of the merger. In an attempt to alleviate regulatory concerns, Halliburton and Baker Hughes last year pledged to sell businesses with $5.2 billion in 2013 revenue; more recently, they proposed to sell additional businesses. Included in the divestiture portfolio are businesses that make various types of sophisticated drill bits and others that put the finishing touches on wells that are drilled but not yet producing. Following the Justice Department filing, the companies said their divestiture plan would "facilitate the entry of new competition in markets in which products and services are being divested." The companies said the government's move to block their merger "is counterproductive, especially in the context of the challenges the U.S. and global energy industry are currently experiencing" and added they "intend to vigorously contest" the lawsuit. Oil-field-services companies sell supplies and advice to energy producers and provide services such as drilling and hydraulic fracturing, the rock-cracking process that has enabled a boom in U.S. oil and gas production. Since Halliburton and Baker Hughes agreed to combine, the industry has faced severe setbacks as persistently low crude prices have slashed demand. Many of the mom-and-pop oil-field services businesses that crowd the space have folded as drilling activity slowed in response to low energy prices, while others are offering their services at or below break-even prices. The Justice Department said in its suit that Halliburton's divestiture plan "appears to be among the most complex and riskiest remedies ever contemplated in an antitrust case," requiring the separation of businesses that share facilities, employees, software, intellectual property and customer contracts. In the absence of any settlement between the companies and the Justice Department, the outcome will be decided at trial. Carlyle, based in Washington, D.C., is among the buyout firms with the most experience navigating the capital. The firm got its start in the late 1980s buying businesses shed by the government in a wave of privatizations, setting them up to run as independent concerns, and then selling them -- often at hefty profits. Over time, Carlyle adapted its experience in carving out defense contractors and other businesses from the federal government to plucking out-of-favor units from large corporations. In recent years, the firm has invested in deals to acquire units of United Technologies Corp., Illinois Tool Works Inc., Johnson & Johnson and DuPont Co. Carlyle's $4.9 billion acquisition in 2013 of DuPont's paint-making unit, now known as Axalta Coating Systems Ltd., has been one of the most lucrative investments in the firm's history. The carve-out approach has helped Carlyle invest large sums from its private-equity business at a time when takeovers of entire companies have become less common amid high company valuations and the mixed performance of the last wave of big buyouts. An acquisition of Halliburton and Baker Hughes' businesses also would coincide with Carlyle's increased presence in energy. The firm in 2012 acquired a controlling stake in energy-focused private-equity firm NGP and has since raised several pools of cash to invest in various facets of the industry. Credit: By Dana Mattioli and Ryan Dezember
Subject: Acquisitions & mergers; Antitrust; Divestiture; Oil service industry
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990; Name: Department of Justice; NAICS: 922130; Name: Carlyle Group; NAICS: 523110
Classification: 8510: Petroleum industry; 2330: Acquisitions & mergers; 8130: Investment services
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Apr 15, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781142404
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Wells Fargo Feels Pain From Oil-Price Slump
Author: Rudegeair, Peter; Glazer, Emily
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Apr 2016: C.1.
Abstract:
Wells Fargo & Co.'s first-quarter profit fell 5.9% as the nation's third-largest bank by assets said the slump in oil prices continued to punish energy companies and started to hurt some consumers.
Full text: Wells Fargo & Co.'s first-quarter profit fell 5.9% as the nation's third-largest bank by assets said the slump in oil prices continued to punish energy companies and started to hurt some consumers. Shares were relatively flat as earnings and revenue beat Wall Street estimates. The San Francisco firm has long been a bellwether of the housing market, where it is a top mortgage lender, but in recent quarters it also has been a barometer of how falling oil prices are affecting big banks. While Wells Fargo executives have stressed that the energy portfolio accounts for only about 2% of overall loans, potential losses are piling up. Discussion of energy dominated its analyst call. Chief Financial Officer John Shrewsberry said he still expects pain in the oil patch, and the bank will "continue talking about [energy stresses] all year." Low oil prices have pushed many energy firms into distress, which affects Wells Fargo more than other large banks since it is one of the most sizable lenders to the industry. Within Wells Fargo's energy-loan book, the number of loans labeled as "classified," or in danger of defaulting, rose to 57% in the first quarter, up from an industry high of 38% in the fourth quarter. Mr. Shrewsberry said in an interview that figure is Wells Fargo's "own, cautious determination of how we see the prospects" for energy borrowers. Despite pressure in the industry, Wells Fargo's energy-loan portfolio increased 3% to $17.8 billion as more clients tapped their credit lines. In the first quarter, Wells Fargo charged off $204 million in energy loans, an increase of about 75% from the amount it charged off in the fourth quarter. The bank also added $200 million to funds to cover loans that could sour because of deterioration in its oil-and-gas portfolio. That marked the first time since 2009 that Wells Fargo built up reserves for loan-loss reserves instead of releasing them or standing pat. Wells Fargo also said it rejiggered its consumer-loan standards in areas reliant on the energy industry, such as Houston and parts of Alaska, after it started to notice a rise in delinquencies. The energy exposure has "been a concern," said shareholder John Hadwen, a Toronto-based portfolio manager at CI Investments Inc., which owns about $88 million in Wells Fargo warrants. "But it's probably in the valuation to some extent." Wells Fargo reported a first-quarter profit of $5.46 billion, or 99 cents a share. That compares with $5.8 billion, or $1.04 a share, in the same period of 2015. The latest results included a tax benefit of seven cents a share. Analysts polled by Thomson Reuters had expected earnings of 97 cents a share. Revenue rose 4.3% to $22.2 billion, making Wells Fargo the first big bank to report rising revenue in the first quarter. Analysts had expected $21.61 billion. Earlier this week, regulators told Wells Fargo to rewrite its plan detailing how it would go through a potential bankruptcy. For Wells Fargo, run by Chairman and CEO John Stumpf, it was an unexpected turn after the bank was the only one to get a passing grade in the previous round of "living will" submissions. Wells Fargo's most recent plan contained "material errors" that required resubmission, the only one of eight banks tested to get that regulatory feedback. "We're going to get this right," Mr. Stumpf told analysts. Like J.P. Morgan Chase & Co. on Wednesday, Wells Fargo reported that the consumer and overall lending generally looked strong. Wells Fargo's total loans at the end of the first quarter were up 10% to $947.26 billion. The bank's costs increased 4% to $13 billion from $12.51 billion. Expenses as a share of revenue in the first quarter were 58.7%, at the high end of the range of 55% to 59% that Wells Fargo targets for its so-called efficiency ratio. Credit: By Peter Rudegeair and Emily Glazer
Subject: Financial performance; Energy industry; Crude oil prices
Location: San Francisco California
Company / organization: Name: Wells Fargo & Co; NAICS: 522110, 551111
Classification: 8110: Commercial banking services; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 15, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781142431
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
RigUp Gets $15M Series A Despite Oil Price Decline
Author: Chernova, Yuliya
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
New backers include FreeS VC, Moore Capital and GE Ventures, part of General Electric Co. "The industry went into shock mode," said Xuan Yong, RigUp's co-founder and chief executive, about the reaction to the collapse in oil prices.
Full text: During the short existence of startup RigUp Inc., the oil and gas industry it serves turned on its head. When the startup started testing its online marketplace for oil-rig projects in 2014 the price for a barrel of crude hovered around $100, oil rigs were multiplying around the country and exploration companies were making profits. Since then, the price per barrel sank to around $40 and the number of oil rigs dropped some 75%, to the lowest level since at least 1949, according to data from WTRG Economics. And yet Austin, Texas-based RigUp managed to raise a $15 million Series A round, building on top of the $3 million seed round it closed in the summer of 2014. The new round came mostly from existing investors, Founders Fund, Box Group, and Great Oaks. New backers include FreeS VC, Moore Capital and GE Ventures, part of General Electric Co. "The industry went into shock mode," said Xuan Yong, RigUp's co-founder and chief executive, about the reaction to the collapse in oil prices. But it didn't entirely freeze over. Instead, smaller development teams needed to cut costs and turned to software, like that from RigUp, to cut the man-hours required to get a project under way. RigUp offers a marketplace where exploration and production, or E&P, buyers can procure oil-field services and equipment vendors, validate and verify compliance attributes of the vendors, and pay via the platform, as well. Mr. Young said that RigUp's biggest competitor is phone and email, the standard ways by which E&P companies get quotes. The startup now sees more than $150 million in transactions completed on its platform each month. About 80 exploration and production companies and more than 9,000 service companies are part of its marketplace. Transaction volume is lower than it would have been had oil and gas prices were higher, Mr. Yong said. But the good thing for RigUp is that it had started from zero, so its trajectory was going to go up. Some market participants dropped out, but others joined the platform over time, the CEO said. The RigUp marketplace is free for buyers and sellers to use. The company intends to make money when it is selected as a subcontractor by an E&P company that owns the oil rig project, which could happen in 10% to 30% of cases, the CEO estimated. RigUp, for example, can bring in vendors under its insurance policy for the period when a project is being developed. It can assume some of the risk off the vendor for a fee. "That business model is new," Mr. Yong said, declining to say whether it has gotten any revenue for it yet. The company will be opening up an office in Dallas, developing new software products, and hiring more salespeople. http://www.rigup.com Write to Yuliya Chernova at yuliya.chernova@wsj.com Credit: By Yuliya Chernova
Subject: Energy economics; Startups; Petroleum industry
Company / organization: Name: GE Ventures; NAICS: 523910; Name: General Electric Co; NAICS: 334512, 334519, 332510, 334290; Name: Founders Fund; NAICS: 525910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781155617
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781155617?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil's Rally Is Running on Fumes; A freeze in production, if agreed, would have little real impact on the oil market this year
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
Short-term supply disruptions and unexpectedly strong demand figures have helped fuel a rally in near-month prices relative to longer-dated futures contracts, particularly in Brent.
Full text: Oil bulls, curb your enthusiasm. The sharp recovery in benchmark oil prices from their lows earlier this year started around the time that Saudi Arabia, Russia and others first mooted the idea of a freeze to oil output . Yet ahead of another meeting of the world's biggest exporters this weekend, there are still reasons to think that oil has had the best of its current run . Sure, an output freeze, if agreed, would cement the idea for many investors that the worst of the oil crash is over. Trouble is, a freeze would have little real impact on the oil market this year. The International Energy Agency this week noted that producers are pumping at near record rates. And the exporter with the most potential growth, Iran, looks least likely to play ball. But in holding out simply the hope of coordinated action among producing nations, even talk of a freeze has helped lift oil from its doldrums, deterring bearish bets. Indeed, notes Ole Hansen at Saxo Bank, investors have ramped up bullish bets on prices, with long positions in Brent crude reaching record levels earlier this month. Improved sentiment is supportive. But fundamentals, while better, still look flimsy. Unexpected disruptions to supply, in Nigeria, Iraq and elsewhere, have removed 800,000 barrels a day from the market, according to Barclays. Such cuts are likely to be temporary. Developments in the U.S. are also helping the market. Onshore oil production is falling. And investors may also be reassessing their view of how quickly shale producers can respond to a rise in oil prices, argues Chris Kettenmann, chief energy strategist at Macro Risk Advisors. The assumption had been that nimble operators could quickly capitalize on rising prices, capping any rally. But increased attention to fragile balance sheets and banks' exposure to the industry , as well as the availability of manpower and equipment after a long period of retrenchment, raises doubts about the speed of the bounceback. Still, this again may not be enough to sustain a rally. Despite the cutbacks, the jury is out on the critical question of how U.S. production might respond. Mr. Kettenmann, for one, expects a forceful response from producers as prices rise, albeit with a one-to-two quarter lag. Given how recent the shale boom has been, there is no road map for how producers are likely to behave. There is also a technical factor to consider. Short-term supply disruptions and unexpectedly strong demand figures have helped fuel a rally in near-month prices relative to longer-dated futures contracts, particularly in Brent. That though squeezes the incentive to store oil, and could mean investment stockpiles are released, again boosting supply. Ultimately, the tone from this weekend's meeting in Doha could be as important as tangible action. Still, the oil market looks positioned for near-term disappointment, rather than delight. Write to Helen Thomas at helen.thomas@wsj.com Credit: By Helen Thomas
Subject: Petroleum industry; Petroleum production
Location: Russia Iran United States--US Saudi Arabia
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New Yor k, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781171668
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Government Debt Strengthens as Markets Watch Doha; Treasurys are closely linked to oil as higher commodity prices boost inflation expectations
Author: Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
A series of Treasury auctions in recent days has underscored the appeal of government debt, with sales of three-year notes, 10-year notes and 30-year bonds all receiving strong demand from investors.At Thursday's 30-year bond sale, a gauge of foreign demand hit the highest level since September and the third-highest on record for a 30-year bond auction.
Full text: U.S. government bonds strengthened Friday, as investors continued to take cues from the oil market. After climbing for much of the week, oil prices declined Friday as investors grew more pessimistic that a meeting of oil producing countries in Doha, Qatar, will lead to significant curbs on production. U.S. Treasurys have been closely tied to the price of oil recently, with higher commodity prices causing investors to favor riskier assets. Treasury yields, which move in the opposite direction of bond prices, had trended upward in recent days despite a few reports that might have depressed them under normal conditions, including softer-than-expected readings on inflation and March retail sales. Yet as sentiment shifted Friday, another lackluster economic report, this one on consumer confidence, did seem to finally penetrate the bond market, adding fuel to a rally that had begun earlier in the day, analysts said. Signs of weakness in the economy often lead to more bond buying, as a near-term interest rate increase by the Federal Reserve becomes less likely and investors seek safe returns. That correlation, though, has become less pronounced partly because Fed officials have already made it clear that they are in no rush to raise interest rates. The yield on the benchmark 10-year U.S. Treasury note settled at 1.753%, down from 1.781% Thursday but still up from 1.722% at last Friday's close. Financial markets have come to view oil prices as an important gauge of global economic health, with stocks and high-yield bonds rallying when oil prices rise and declining when they fall. When investors become bullish on riskier assets they tend to lighten up on government debt. Higher oil prices can also eventually lead to higher inflation, which diminishes the value of long-term bonds. As opposed to economic data, "the big story is what's going to happen in terms of the concessions in Doha, or whether they're going to cut production or not, and we're really being driven by the rumors and speculation on that," said Jonathan Rick, interest-rate derivatives strategist at Credit Agricole in New York. Despite recent fluctuations, government bond yields from both sides of the Atlantic remain near historically low levels amid sluggish growth and low interest rates. Unconventional monetary stimulus adopted by central banks in Japan and a number of European countries have generated a growing pool of negative-yield government bonds , intensifying investors' struggle to obtain income. U.S. Treasurys offer one of the highest yields in the developed world. A series of Treasury auctions in recent days has underscored the appeal of government debt, with sales of three-year notes, 10-year notes and 30-year bonds all receiving strong demand from investors.At Thursday's 30-year bond sale, a gauge of foreign demand hit the highest level since September and the third-highest on record for a 30-year bond auction. Along with the rally in riskier assets, the influx of new debt was another factor weighing on bonds this week, said Stanley Sun, interest rates strategist at Nomura Securities International in New York. Going forward, yields could easily continue their march downward, although "at some point people will have to start thinking about valuations and whether buying Treasurys at these yields means anything from an investment return perspective," he added. Write to Sam Goldfarb at sam.goldfarb@wsj.com Credit: By Sam Goldfarb
Subject: Interest rates; Treasuries; Bond issues; Prices; Federal Reserve monetary policy
Location: Qatar United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781171748
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
North Dakota Oil Production Falls for Third Month in a Row; Natural gas production in state increases 2.9% to 1.69 billion cubic feet a day in February
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
February's slower pace of decline reflected an uptick in completions of previously drilled wells, as cash-strapped producers sought to boost revenue despite low oil prices, said Lynn Helms, director of the state's Department of Mineral Resources.
Full text: North Dakota crude oil production fell for the third month in a row, ticking down 0.4% in February and hitting its lowest level in 18 months. Slumping oil prices are starting to affect output in U.S. shale fields, including the prolific Bakken formation in North Dakota. Oil production in the state dropped to 1.11 million barrels a day in February from 1.12 million barrels a day in January , according to the latest data from the North Dakota Department of Mineral Resources. The state's output hasn't been that low since July 2014. The slightly lower production in February follows a 2.6% drop in January and a 2.5% slide in December , data from the department show. February's slower pace of decline reflected an uptick in completions of previously drilled wells, as cash-strapped producers sought to boost revenue despite low oil prices, said Lynn Helms, director of the state's Department of Mineral Resources. "Cash is king," he said. The Bakken formation is one of the highest-cost sources of U.S. production. And output across the state has been hit hard by a decline in crude oil prices in recent months to below $50 a barrel. State figures show North Dakota sweet crude recently traded around $31.25 a barrel. That is below the break-even point for many wells, making them uneconomic. The state's drilling rig count, a barometer of future production, stands at 26 active units, down from 32 in March, showing the fewest rigs at work in oil fields since October 2005. At its peak, North Dakota had 218 rigs drilling in May of 2012. Mr. Helms said the U.S. energy industry is closely watching the outcome from a meeting on Sunday of top global producers in Doha, Qatar. They are discussing a possible oil production freeze, which has the potential to stabilize or boost prices. "Next week is a pivot point. It could mean that we stay at these levels for an extended period of time or it could mean that we start seeing price increases pretty quickly," he said. Meanwhile, natural gas production in North Dakota rose 2.9% in February to 1.69 billion cubic feet a day, hitting a fresh historical high. One reason gas output has increased is that new state rules discourage companies from disposing of gas by burning it off into the atmosphere, a process known as flaring. Only 11% of gas production in North Dakota was flared in February, down from 13% in January and compared with a high of 36% flared in September 2011. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Crude oil prices; Crude oil; Petroleum industry; Natural gas; Petroleum production; Mineral resources
Location: United States--US North Dakota
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781205586
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Producers to Address Crude Glut at Weekend Meeting; World's petroleum exporters are divided on output levels and how to enforce any freeze
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
Read More * Oil Prices Slide in Volatile Trade * U.S. Energy Producers Remain Leery * At a Glance: The Oil World Descends on Doha * Barrel Breakdown: The Cost of Producing a Barrel * Russia Opens Up New Oil Front: India Amid that uncertainty, expectations are low. [...]oil watchers know what to look for:
Full text: DOHA, Qatar--The royalty of the global oil world descends on this Persian Gulf outpost this weekend to discuss freezing its collective output, a gambit to end a nearly two-year price rout. A deal is far from certain. Even if there is an agreement, the impact on markets next week and the ramifications for the global economy further out are likely to come down to a careful parsing of how any deal is communicated. Key participants including Russia and Saudi Arabia, the world's two biggest producers, have said little about what they are going to discuss, how they will define and enforce a freeze and who would be bound by the deal. One of the biggest unknowns: Will Riyadh insist that Iran, just emerging from restrictions on its global oil sales, be asked to join the freeze? "Truth be told, there is hardly any information on what will be discussed at Doha this Sunday," wrote commodities analysts at Bank of America in a report earlier this week. Read More * Oil Prices Slide in Volatile Trade * U.S. Energy Producers Remain Leery * At a Glance: The Oil World Descends on Doha * Barrel Breakdown: The Cost of Producing a Barrel * Russia Opens Up New Oil Front: India Amid that uncertainty, expectations are low. While jittery markets are likely to react on Monday morning to almost anything that comes out of Doha, longer term, the effect may be more muted unless the meeting results in specific commitments from participants and a mechanism to back those up. The Organization of the Petroleum Exporting Countries has long metered its own output to influence prices. The cartel pumped an average 32.5 million barrels a day last month, or a bit more than one out of every three barrels. Most OPEC members are attending the Doha meeting. Adding Russia's roughly 11 million barrels a day to the mix, participants will represent at least 45% of global supply. OPEC in 2014 abandoned its role adjusting production at its own regularly scheduled meetings. Instead, it and other big producers started duking it out around the world over market share. An agreement in Doha would be at least a symbolic detente. It could also put a line under prices, which already have risen somewhat this year amid signs that lower prices are snuffing out production on its own. For oil watchers, this weekend's Doha talks have taken on similar importance to OPEC meetings of old. But those confabs tend to be relatively well-choreographed affairs. There is a scheduled meeting, a break for lunch and then a news conference. Generally speaking, oil watchers know what to look for: Is OPEC cutting production, and by how much? This weekend, there is no script. Officials involved in the meeting say participants still are divided on key parameters, including which output levels could be frozen and for how long, and how any freeze will be enforced. Producers are "confident that Doha will have an agreement, but the baseline is still definitely debatable," said one Persian Gulf oil official who plans to attend. Commerzbank analysts said in a note Friday that they expect some sort of deal. But it "will probably not include any concrete figures or obligations, let alone any sanctions to be imposed in the event of noncompliance," they wrote. "In other words, the meeting will do nothing to change the current situation on the oil market." Still, some participants say they are considering options aimed at convincing the world they mean business. One idea would be to allocate individual output limits for each producer. On paper, that system would look similar to country-based quotas once used by OPEC. But the mechanism was abandoned by the cartel four years ago. Actual production is often a closely guarded secret and outside verification is difficult. Some participants are expecting a softer target--a production number that would send a message to the world that participants were committed to the spirit of the deal. A collective "ceiling," a number that individual countries would commit to not broaching together, is also an option. That is how OPEC currently communicates its output decisions. "You don't want to look at this as a quota, but as a short-term guideline," another Persian Gulf official said. Then there is the issue of the baseline. If countries agree to freeze production, there has to be some agreement on what output is now. Would it be best to fix that using an average output over the past few weeks or months? If individual countries can't be trusted to report their real output, whose numbers will be used to measure compliance? Some delegates from OPEC have suggested their own collection of secondary sources, long used by the organization's Vienna office in its monthly report. Qatar has invited the group's secretary-general, Abdalla Salem el-Badri, to attend the gathering, according to people familiar with the matter, to brief the meeting on OPEC's methodology. OPEC's own production fell by 203,000 barrels a day between January and February due to unusual disruptions in Iraq. To avoid such distortion, some participants support the use of a rolling average, perhaps over the course of three months. Participants may even agree on a cap but "with no figure whatsoever" and opt for general commitment to stop increasing output, one delegate said. Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon and Summer Said
Subject: Petroleum industry; Agreements; Prices
Location: Qatar Russia Persian Gulf Saudi Arabia
Company / organization: Name: Bank of America Corp; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781214984
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781214984?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Weekly U.S. Oil-Rig Count Falls by 3; There are 73% fewer rigs of all kinds since peak in October 2014
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs remained unchanged in the latest week at 89.
Full text: The U.S. oil-rig count fell by three to 351 in the latest week, according to Baker Hughes Inc., maintaining a trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to fall. But it hasn't fallen enough to relieve the global glut of crude. There are now about 78% fewer rigs of all kinds since a peak of 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs remained unchanged in the latest week at 89. The U.S. offshore-rig count was 28 in the latest week, up three from the previous week and down five from a year earlier. On Friday, oil prices were on course for their largest slide in nearly two weeks on doubts that major producers would agree on supply curbs when they meet over the weekend The possibility that the biggest producers in the world would start working together to boost prices has spurred oil's biggest rally in years, but many believe that a deal is unlikely and oil may selloff again after the meeting. Recently, U.S. crude oil fell 2.4% to $40.52 a barrel. Write to Ezequiel Minaya at ezequiel.minaya@wsj.com Corrections & Amplifications An earlier version of this article miscalculated the percentage drop in oil rigs from the peak in October 2014. The number of oil rigs dropped 78% from the peak, not 73%. (May 6, 2016) Credit: By Ezequiel Minaya
Subject: Oil service industry; Supply & demand
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781215085
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781215085?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Despite Bounce in Oil Prices, Most U.S. Energy Producers Remain Leery; Number of rigs drilling for oil continues to decline despite oil prices being up 50% since February, when they hit lowest price in more than decade
Author: Dezember, Ryan; Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Apr 2016: n/a.
Abstract:
[...]the U.S. Energy Information Administration said Wednesday that oil stockpiles swelled by 6.6 million barrels last week, a sign that strong global supply is negating a decrease in U.S. production that might otherwise be lifting prices.
Full text: Oil prices are up 50% since February when they hit their lowest price in more than a decade, but most U.S. energy producers aren't buying the bounce. The rise in drilling activity that usually follows increases in oil prices hasn't yet materialized this year. The number of rigs drilling for oil has continued to decline. They fell to 351 on Friday, which is down a third from the start of the year, according to oil-field services firm Baker Hughes Inc. Leaders of the Organization of the Petroleum Exporting Countries and other major oil producing nations are meeting this weekend in Doha, Qatar, to discuss a possible production freeze, a move that could give oil prices another boost. But oil and gas executives meeting in New York this week for an industry conference sounded a note of caution. "It was very evident that costs and a focus on liquidity are the biggest focus of companies," said Jason Wangler, an analyst with Wunderlich Securities Inc. He added that talk among producers involved reducing drilling further rather than ramping up. Thomas Jorden, chief executive of Cimarex Energy Co., one of the largest producers at the conference, told investors that the company was hesitant to drill more until "we have great confidence that we've seen the bottom of this commodity cycle." "We're not convinced that we've tested the ultimate bottom," he said. "I'd like to think it's only up from here but we haven't seen the fundamental support for that thesis." Some of the caution can be chalked up to the head fake oil prices gave producers a year ago. When prices perked up last March, producers began to send rigs back out into the field. But the rally was short lived and crude prices began to slide again in June. There also hasn't been much fundamental data to back up the recent rise in prices. Commodity Futures Trading Commission data suggests the recent climb might have more to do with money managers closing out wagers that prices would fall than it does supply and demand. During the week ended April 5, for example, the number of bets that crude prices would fall rose 35%, the data show. Prices moved higher, though, prompting traders to back out of bearish positions by buying oil futures contracts. Known as short covering, that process has sparked short-lived rallies repeatedly during oil's two-year slump. Meanwhile, the U.S. Energy Information Administration said Wednesday that oil stockpiles swelled by 6.6 million barrels last week, a sign that strong global supply is negating a decrease in U.S. production that might otherwise be lifting prices. The EIA said that U.S. production fell below nine million barrels a day last week for the first time since October 2014. Production is likely to slide further given the budget cuts companies have made. Evercore ISI analysts said in a recent research report that they expect a "material" decline in U.S. production on account of an estimated 40% reduction in spending by oil companies. Whiting Petroleum Corp. CEO James Volker said at this week's conference that the company, which drills in North Dakota, Colorado and Texas, expects to spend 80% less this year than in 2015 and plans to put most of that $500 million toward drilling, but not completing, about 160 wells. The plan, Mr. Volker said, is to have the wells ready to bring online when he expects prices to recover: in 2017. Write to Ryan Dezember at ryan.dezember@wsj.com and Timothy Puko at tim.puko@wsj.com Credit: By Ryan Dezember and Timothy Puko
Subject: Supply & demand; Petroleum industry; Prices
Location: Qatar United States--US
Company / organization: Name: Wunderlich Securities Inc; NAICS: 523110, 523120; Name: Commodity Futures Trading Commission; NAICS: 926140, 926150; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781233943
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781233943?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Skepticism Hangs Over Oil Meeting
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Apr 2016: B.12.
Abstract:
The price of oil has fallen 34% since June. Since the downturn began, about 60 North American oil-and-gas companies have entered bankruptcy court, involving nearly $20 billion in debt, according to law firm Haynes & Boone. [...]oil watchers know what to look for:
Full text: DOHA, Qatar -- The next big move in the price of crude rests with leaders from major oil-producing nations meeting this weekend and whether global markets decide to trust whatever they say. Weeks of anticipation that the countries could reach a deal at a conference in Qatar already has helped lift oil prices from their lowest levels in more than a decade. U.S. crude prices have rallied 54% since February, driven largely by reports that the big producers were agreeing to meet to discuss an output freeze after months of discord. Yet plenty of skepticism persists on their ability to agree and stick to a production freeze. U.S. oil prices fell 2.7%, to $40.36 a barrel, on Friday, their largest slide in nearly two weeks, on doubts that the major crude-exporting nations can compromise. Key participants, including Russia and Saudi Arabia, the world's two biggest producers, have said little about what they are going to discuss, how they will define and enforce a freeze and who would be bound by any deal. U.S. oil producers also seem skeptical that the meeting will produce results with a meaningful impact. Many have been keeping operations idle despite the recent price increases that in the past might have encouraged them to ramp up production. The number of rigs in the U.S. drilling for oil continues to decline, falling on Friday to 351, down a third from the start of the year, according to oil-field-services firm Baker Hughes Inc. "We're not convinced that we've tested the ultimate bottom," Thomas Jorden, chief executive of Cimarex Energy Co., said at an industry conference in New York this week. "I'd like to think it's only up from here, but we haven't seen the fundamental support for that thesis." Some producers have bigger problems. Goodrich Petroleum Corp., a Houston-based oil-and-gas firm, on Friday became the latest energy company to succumb to low prices when it filed for chapter 11 bankruptcy protection. The price of oil has fallen 34% since June. Since the downturn began, about 60 North American oil-and-gas companies have entered bankruptcy court, involving nearly $20 billion in debt, according to law firm Haynes & Boone. While jittery markets are likely to react on Monday morning to almost anything that comes out of Doha, longer term, the effect may be more muted unless the meeting results in specific commitments from participants and a mechanism to back those up. Even a production freeze may not move output, in the near-term at least, from levels that have left global markets awash in oil. The International Energy Agency said in a report on Wednesday that "any deal struck won't materially impact the global supply-demand balance" during the first half of 2016, as both Saudi Arabia and Russia already are producing at or near record rates. Saudi Arabia pumped 10.19 million barrels a day in March, a decline of 30,000 barrels a day but still close to its peak levels, while Russia's output hit a three-decade high in March at 10.91 million barrels a day, according to official statistics. At the same time, Iran indicated recently that it doesn't want to cap production until it returns to presanction levels. The country is trying to boost its oil exports by 500,000 barrels a day in the next few months. Most members of the Organization of the Petroleum Exporting Countries are attending the Doha meeting. OPEC in 2014 abandoned its role adjusting production at its own regularly scheduled meetings. Instead, it and other big producers started duking it out around the world over market share. An agreement in Doha would be at least a symbolic detente. It also could put a line under prices, which have risen 9% this year amid signs that lower prices are snuffing out production on its own. For oil watchers, this weekend's Doha talks have taken on similar importance to OPEC meetings of old. But those confabs tend to be relatively well-choreographed affairs. There is a scheduled meeting, a break for lunch and then a news conference. Generally speaking, oil watchers know what to look for: Is OPEC cutting production and by how much? This weekend, there is no script. Officials involved in the meeting said participants still are divided on some parameters, including which output levels could be frozen and for how long, and how any freeze would be enforced. Producers are "confident that Doha will have an agreement, but the baseline is still definitely debatable," said one Persian Gulf oil official who plans to attend. Commerzbank AG analysts said in a note Friday that they expect some sort of deal. But it "will probably not include any concrete figures or obligations, let alone any sanctions to be imposed in the event of noncompliance," they wrote. "In other words, the meeting will do nothing to change the current situation on the oil market." Still, some participants said they are considering options aimed at convincing the world they mean business. One idea would be to allocate individual output limits for each producer. On paper, that system would look similar to country-based quotas once used by OPEC. But the mechanism was abandoned by the cartel four years ago. Actual production is often a closely guarded secret, and outside verification is difficult. Some participants are expecting a softer target: a production number that would send a message to the world that participants were committed to the spirit of the deal. A collective "ceiling," a number that individual countries would commit to not broaching together, is also an option. That is how OPEC currently communicates its output decisions. "You don't want to look at this as a quota, but as a short-term guideline," another Persian Gulf official said. Then there is the issue of the baseline. If countries agree to freeze production, there has to be some agreement on what output is now. Would it be best to fix that using an average output over the past few weeks or months? If individual countries can't be trusted to report their real output, whose numbers will be used to measure compliance? Some delegates from OPEC have suggested their own collection of secondary sources, long used by the organization's Vienna office in its monthly report. Qatar has invited the group's secretary-general, Abdalla Salem el-Badri, to attend the gathering, according to people familiar with the matter, to brief the meeting on OPEC's methodology. --- Ryan Dezember and Timothy Puko contributed to this article. Credit: By Benoit Faucon and Summer Said
Subject: Crude oil; Commodity prices
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.12
Publication year: 2016
Publication date: Apr 16, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781304728
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781304728?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Oil Slump Claims Another U.S. Producer
Author: Gleason, Stephanie
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Apr 2016: B.3.
Abstract:
Or will they need to liquidate their positions?" Debt-for-equity swaps provide another benefit for cash-strapped oil and gas companies, said Jeff Jones, managing director of investment bank Blackhill Partners.
Full text: Goodrich Petroleum Corp. filed for chapter 11 bankruptcy Friday with investment firms slated to pick up the pieces, as yet another company sought court protection amid the shakeout in the oil and gas industry. Houston-based Goodrich, an oil and gas producer which struggled to cut its debt as crude prices tumbled, has a deal in place that would erase $400 million in debt from its books through a swap with a group of investors that own bonds the company issued last year. The Goodrich bondholders, who include Franklin Advisors Inc., Penn Capital Management and Jefferies LLC, have agreed to forgive $175 million in debt in exchange for ownership of the company. The deal is part of a larger bankruptcy-exit plan that would pay off or carry over $40 million of higher-ranking senior bank debt and wipe out $224 million in unsecured bonds. Goodrich's bankruptcy deal mirrors those proposed recently by other struggling oil producers as the energy slump transforms a U.S. industry once dominated by Texas oil men into one controlled by financial firms from across the nation. Falling oil prices have roiled the industry since the summer of 2014. Since that time, about 60 North American oil and gas companies have filed for bankruptcy, involving nearly $20 billion in debt, according to the law firm Haynes & Boone. On Thursday, Houston's Energy XXI Ltd. filed for bankruptcy to complete a debt-for-equity swap with a group of bondholders that includes Oaktree Capital Management. Denver-based Venoco Inc. filed for bankruptcy last month after striking a deal with Apollo Global Management and MAST Capital Management that will erase nearly $1 billion in debt. Energy & Exploration Partners Inc., Magnum Hunter Resources Corp. and New Gulf Resources LLC are among other energy companies that have brokered similar deals. The rising number of debt-for-equity swaps is due to lenders' unwillingness to accept the fire-sale prices that potential buyers are offering for oil assets, according to Ian Peck, head of Haynes & Boone's bankruptcy practice. Although some oil traders believe crude prices have bottomed out, others are striking a more cautious note as the world's biggest oil exporters meet this weekend in Doha to discuss how to end the price rout. The question, Mr. Peck says, is "are these new owners -- the banks and bondholders -- willing to hold the equity as long as it takes? Or will they need to liquidate their positions?" Debt-for-equity swaps provide another benefit for cash-strapped oil and gas companies, said Jeff Jones, managing director of investment bank Blackhill Partners. "If you convert enough debt to equity, then there is some room for drilling budgets to be inserted into these reorganization plans," he said. For Goodrich Petroleum, which operates in Texas, Louisiana and Mississippi, Friday's bankruptcy filing caps a yearlong effort to reduce leverage and raise liquidity to weather low prices. Last March, the company embarked on several money-raising efforts, including the issuance of a fresh series of bonds worth $100 million to its now owners-to-be. It also raised $47.5 million from the sale of now-worthless common stock. In September, the company pulled in another $110 million through an asset sale. In the fall, Goodrich sought to cut its debt with two bond exchanges. The first, on unsecured bonds, exchanged $72.1 million in 2032 bonds for $36 million in new 2032 bonds. The second, on the junior bonds that are being converted to equity, exchanged $158.2 million in 2019 bonds for $75 million in junior bonds. As the energy slump continued into the new year with U.S. benchmark West Texas Intermediate dipping below $30 a barrel in February, Goodrich needed a further reduction of its debt. It sought to shell out more preferred shares and launched another bond exchange. It also opened negotiations with junior bondholders regarding an exchange of their debt and went to stockholders for authorization to issue 400 million more shares of common stock. This time, however, the out-of-court refinancing attempts failed. Shareholders were unwilling to allow the common-stock issuance and not enough unsecured bondholders agreed to the second exchange. Goodrich opted to skip many interest payments on its bonds in March, setting the clock ticking on reaching a deal with investors. The clock ran out Thursday, but by then it had the framework of its deal with bondholders, which it plans to implement in bankruptcy court. --- Alex MacDonald, Jacqueline Palank, Corrie Driebusch and Ryan Dezember contributed to this article. Credit: By Stephanie Gleason
Subject: Bankruptcy reorganization; Petroleum industry
Location: Texas
Company / organization: Name: Goodrich Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Apr 16, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781304804
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781304804?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Iran Won't Attend Doha Oil Meeting; Tehran had previously said it would send a representative, though not its oil minister
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Apr 2016: n/a.
Abstract:
The meeting is intended to produce an agreement among OPEC members like Saudi Arabia and non-members like Russia to stop oil output increases that have led to a glut of crude and sunk oil prices to their lowest levels in a decade.
Full text: Iran won't attend an oil producers' summit on Sunday in Doha, Qatar, to discuss an output freeze, said an oil-ministry official in Tehran on Saturday. The Islamic Republic has refused to back any limitations on its production but had previously said it would send a representative to the meeting, though not its oil minister. The absence of any representation from Iran could undermine the credibility of the gathering, which is led by Russia and most members of the Organization of the Petroleum Exporting Countries such as Saudi Arabia. The meeting is intended to produce an agreement among OPEC members like Saudi Arabia and non-members like Russia to stop oil output increases that have led to a glut of crude and sunk oil prices to their lowest levels in a decade. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Petroleum industry; International markets; Cartels
Location: Russia Iran Qatar Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 16, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781326847
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781326847?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi, Iranian Rivalry Imperils Doha Oil Deal; A day before oil world descends on Doha, Iran says it won't be sending a representative
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Apr 2016: n/a.
Abstract:
Related Coverage * As Oil Producers Meet, Skepticism Persists Over Prospects of Freeze * Iran Won't Attend Doha Oil Meeting * Oil Prices Slide in Volatile Trade * U.S. Energy Producers Remain Leery * At a Glance: The Oil World Descends on Doha * Barrel Breakdown: The Cost of Producing a Barrel * Russia Opens Up New Oil Front: India Sharply lower oil prices over almost two years have hurt both Saudi Arabia and Iran, which both get the bulk of their government revenues from oil sales.
Full text: DOHA, Qatar--One week ago, Saudi Arabia cut by 10 cents the price it charges for each barrel of its sought-after light crude oil to Asian customers. Three days later, the kingdom's biggest rival, Iran, followed suit with its own 10-cent reduction to the same customers. The price war underscores the simmering tension between Saudi Arabia and Iran, which Saturday said it would snub a meeting Sunday in Qatar among some of the world's largest oil producers. The meeting is aimed at producing an agreement among Organization of the Petroleum Exporting Countries members such as Saudi Arabia and nonmembers like Russia to stop oil output increases that have led to a glut of crude and sunk oil prices to their lowest levels in a decade . But the continuing animosity between Iran and Saudi Arabia threatens to scuttle or significantly dilute any deal, analysts and oil officials said. In addition to the price competition, Iranian crude has been blocked from using a shortcut pipeline to Europe. And Saudi Arabia's powerful deputy crown prince has said the kingdom wouldn't agree to limit its output unless Iran did, too. Saudi Arabia won't constrain oil production unless other producers, including Iran, do, too, said Prince Mohammed bin Salman, according to an interview by Bloomberg published Saturday. Iran has said it won't join the deal and on Saturday said it wouldn't send any representatives to the meeting. The absence of any Iranian input in the debate could undermine the credibility of any agreement. "To many," the situation "seems to be all about the Saudi-Iran rivalry," said Adel Hamaizia, a senior teaching fellow at the School of Oriental and African Studies in London. Saudi Arabia and Iran represent two sects of Islam, respectively, Sunnis and Shiites, and are at odds in regional conflicts, supporting different sectarian sides in Syria's civil war and the violent unrest in Yemen. Riyadh cut off diplomatic ties with Tehran this year after its embassy there was ransacked following the execution in Saudi Arabia of a prominent Shiite cleric. Those divisions now appear to be spilling over into the countries' energy policies as Iran attempts to reassert itself in the region with the end of Western sanctions allowing it to ramp up its main export: crude oil. Meanwhile, Saudi Arabia is attempting to hold on to its influence in the region at a time when it is strapped for cash and one of its biggest allies, the U.S., looks to reset relations with Iran. "Middle East politics could once again trump oil economics," Bank of America Merrill Lynch said in a note Wednesday. The bank warned an open clash between both nations over oil policies could bring prices back down by $10 a barrel. Those tensions could lead to a deal with vague terms on Sunday, and will likely exclude Iran altogether. A growing number of analysts have cautioned investors to expect little fundamental change in oil supply. Related Coverage * As Oil Producers Meet, Skepticism Persists Over Prospects of Freeze * Iran Won't Attend Doha Oil Meeting * Oil Prices Slide in Volatile Trade * U.S. Energy Producers Remain Leery * At a Glance: The Oil World Descends on Doha * Barrel Breakdown: The Cost of Producing a Barrel * Russia Opens Up New Oil Front: India Sharply lower oil prices over almost two years have hurt both Saudi Arabia and Iran, which both get the bulk of their government revenues from oil sales. Saudi Arabia pumps about 10.2 million barrels of oil a day and exports more than any country in the world. Iran pumps about 3.3 million barrels a day and is trying to increase that to 4 million barrels a day. Surging American production from shale formations has cut into a key Saudi market in the U.S., forcing it to look elsewhere and compete heavily with both allies like the United Arab Emirates and rivals like Russia. The kingdom has been pumping at record levels in a fight to grab markets across the world, a departure from previous policies of pulling back output to keep prices high In Iran, the combination of low prices and reduced exports due to sanctions over its nuclear industry has crippled its economy over the past three years. Iran needs higher prices, but returning to its former presanctions glory as a big producer is economically and politically important for President Hassan Rouhani. Iran's return has been hampered by its lack of access to a partially Saudi-owned pipeline through Egypt called the Sumed, forcing tankers to go around Africa to haul oil to Europe. Egyptian and Iranian officials said. The pipeline is the only way to transfer large oil cargoes from the Red Sea to the Mediterranean and is 15% owned by Saudi Arabia, along with allies in the Persian Gulf and Egypt--all of them aligned politically against Iran. When France's biggest energy company, Total SA, in February tried to bring Iran's first oil export to Europe in three years, it was blocked from using Sumed. It was forced instead to go thousands of miles around Africa's Cape of Good Hope and up to the French port of Le Havre. Egyptian officials who run the pipeline said their paperwork simply hasn't been updated to reflect the end of Western sanctions on Iranian oil. The Saudi oil ministry didn't respond to requests for comment sent by email. An Iranian oil ministry official said the country wants to retain good relationships with other producers, including Saudi Arabia, but declined to comment further. Whatever the reason, the lack of access has put Iran at a disadvantage in Europe against Saudi Arabia, which this week signed a five-year contract with Sumed to increase its oil flows to Europe. That deal "may limit the opportunity for Iran to use the route," the International Energy Agency said in a report Thursday. The two countries also have been at odds over the market share in Asia, where both see rising demand and a host of future sales. In Taiwan, for instance, Saudi Arabia swooped in over the past three years to build a customer base there when the U.S. asked Taipei to curtail its Iranian shipments. Now, Tehran is wooing refineries again in Taiwan, where business officials say Iranian crude sales could jump over 25% this year. Privately, Persian Gulf oil officials say a deal will get done on Sunday despite the prince's comments. If Saudi Arabia backed out of the production freeze, it could send oil prices falling again. But Saudi Arabia's oil minister, Ali al-Naimi, "will have to toe the party line. He can't contradict his boss," said an African oil official who is planning to attend the gathering. Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon and Summer Said
Subject: Petroleum industry; Crude oil; Diplomatic & consular services; Crude oil prices; Petroleum production
Location: Russia Qatar Iran Europe Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 16, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781330535
Document URL: https://login .ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781330535?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
No Agreement on Oil Freeze at Doha Meeting; Unclear when officials might meet again
Author: Faucon, Benoit; Said, Summer; Spindle, Bill
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Apr 2016: n/a.
Abstract:
Related Coverage * Saudi, Iranian Rivalry Imperils Doha Oil Deal * As Oil Producers Meet, Skepticism Persists Over Prospects of Freeze * Iran Won't Attend Doha Oil Meeting * Oil Prices Slide in Volatile Trade * U.S. Energy Producers Remain Leery * At a Glance: The Oil World Descends on Doha * Barrel Breakdown: The Cost of Producing a Barrel * Russia Opens Up New Oil Front: India Energy Aspects, a London-based energy consultancy, recently revised its estimates for global, non-OPEC production declines this year to 700,000 barrels per day from 200,000 to 300,000 in earlier forecasts.
Full text: DOHA, Qatar--After oil producers that supply nearly half of the world's output failed Sunday to reach a deal to freeze crude output , crude oil prices sank more than 6% in the opening hour of Asia trade Monday. The much-anticipated meeting of Organization of the Petroleum Exporting Countries members and other major oil producers, such as Russia, started a day of negotiations over a possible freeze with what participants described as a draft deal. But Sunday's meeting quickly turned to sniping and confusion after Saudi Arabia's delegation appeared to step back from any agreement without geopolitical rival Iran. Ahead of the meeting, delegates circulated a draft accord that calls for freezing output at January levels until Oct. 1 to gauge its effect on prices. The freeze, first suggested in February, is intended to limit global supply and bolster prices. The draft, reviewed by The Wall Street Journal, calls for a monitoring committee comprising members of OPEC and other countries that would be charged with ensuring compliance. Ryadh has publicly signaled it won't consider a freeze without Iran. Saudi Crown Prince Mohammed bin Salman, the country's top economic official, repeated that view over the weekend, in an interview with Bloomberg News published Saturday. That tone contrasted with the kingdom's delegation here, led by longtime Saudi Oil Minister Ali al-Naimi. He landed in Doha on Saturday and declined to comment ahead of the meeting. But people familiar with the Saudi delegation's thinking said Riyadh was willing to sign a deal despite what they described as political statements from Prince Salman. Later Sunday, Mr. Naimi's delegation changed its tune and insisted on Iranian participation after all, two delegates familiar with the matter said. The switch was "surprising and contradicts what they have been saying for the last few days," according to one Persian Gulf oil official in Doha familiar with the new stance. Going into the meeting the key sticking point had always been Iran. It is also uncertain whether any deal will be considered strong enough to convince energy markets that producers are serious about reining in production and bolstering prices. Analysts have said that participants need to communicate a specific deal--agreeing on an output ceiling, time frame and transparent enforcement--to convince investors and oil traders around the world that the freeze could work. The longer-term market impact of the failure to freeze production could be blunted by the reality that low prices are already pushing many cash-strapped producers out of the market, making a formal freeze less important. The U.S. Energy Information Administration said in its short-term energy outlook last week that U.S. crude production fell by 90,000 barrels a day in March from February. The agency lowered its U.S. output forecast for 2016 to 8.6 million barrels per day and 8 million barrels per day in 2017. That is off from a multidecade peak of 9.4 million barrels per day last year. Related Coverage * Saudi, Iranian Rivalry Imperils Doha Oil Deal * As Oil Producers Meet, Skepticism Persists Over Prospects of Freeze * Iran Won't Attend Doha Oil Meeting * Oil Prices Slide in Volatile Trade * U.S. Energy Producers Remain Leery * At a Glance: The Oil World Descends on Doha * Barrel Breakdown: The Cost of Producing a Barrel * Russia Opens Up New Oil Front: India Energy Aspects, a London-based energy consultancy, recently revised its estimates for global, non-OPEC production declines this year to 700,000 barrels per day from 200,000 to 300,000 in earlier forecasts. It expects demand to begin outstripping supply--and drawing down on swollen crude stockpiles--globally starting in June. Iran, which was recently released from international sanctions that restricted its oil exports, has said it plans to increase production until it achieves the 4 million barrels per day level from before the sanctions. It currently produces 3.1 million barrels per day. But market observers say those levels will take Iran years to reach, and so far the country's ramp up in production has proceeded slowly. Write to Benoit Faucon at benoit.faucon@wsj.com , Summer Said at summer.said@wsj.com and Bill Spindle at bill.spindle@wsj.com Credit: By Benoit Faucon, Summer Said and Bill Spindle
Subject: Crude oil prices; Petroleum industry; Supply & demand; Energy industry
Location: Iran Qatar Asia Russia Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia Naimi, Ali I
Company / organization: Name: Bloomberg News; NAICS: 519110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 17, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781380181
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781380181?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Worker Strike Cuts in Half Kuwait Crude Production; Workers are protesting a proposal to cut wages and benefits for all public-sector employees
Author: Kholaif, Dahlia
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Apr 2016: n/a.
Abstract:
Kuwait's cabinet ordered the Kuwait Petroleum Corporation, the parent company of its state-owned oil institutions, to substitute the striking workers and "to hold accountable all those who hindered vital utilities," according to official news agency KUNA.
Full text: Kuwait's crude production dropped by more than half on Sunday as thousands of its oil industry employees began an open-ended strike over government plans to cut wages. The country's output fell to 1.1 million barrels a day, Kuwait Oil Co., the state-owned production company, said on its official Twitter account. The Organization of the Petroleum Exporting Countries member usually produces nearly 3 million barrels per day. Exports remain normal and production is "on the rise," oil ministry spokesman Sheikh Talal al-Khaled said in a post on the Twitter account. Workers are protesting a proposal to cut wages and benefits for all public-sector employees, as the oil-dependent country considers measures to cushion the effect of falling prices on its budget. Kuwait has lagged other oil producers in the Persian Gulf in cutting spending while attempting to make up for a nearly 30% drop in oil prices last year amid a global glut. The strike comes as delegates from more than a dozen oil producing countries who gathered in Doha hoping to freeze crude output failed to clinch a deal , according to ministers leaving the meeting late Sunday. A Kuwaiti oil official said the strike could inadvertently benefit the oversupplied market. State-owned refiner Kuwait Petroleum Corp.'s output fell from 930,000 barrels a day Sunday to 520,000 barrels. Kuwait has made it a priority to ramp up production capacity and reach new markets, competing with regional rivals including Iran and the United Arab Emirates. All three refineries operated by the Kuwait National Production Company, the state's sole refiner, are working at the maximum capacity allowed by an emergency plan, Chief Executive Mohammed al-Mutairi said in a statement. Domestic fuel needs will be met without interruption, he said. Kuwait's cabinet ordered the Kuwait Petroleum Corporation, the parent company of its state-owned oil institutions, to substitute the striking workers and "to hold accountable all those who hindered vital utilities," according to official news agency KUNA. Summer Said and Benoit Faucon contributed to this article. Write to at @wsj.com Credit: By Dahlia Kholaif
Subject: Petroleum industry; Production capacity; Social networks; Competition
Location: Kuwait Persian Gulf
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Kuwait Petroleum Corp; NAICS: 211111; Name: Kuwait Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 17, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781448738
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781448738?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Gas Glut Hands Pricing Power to Buyers; Many buyers are questioning the industry practice of contracting long-term gas supply deals linked to oil prices
Author: Strumpf, Dan; Stewart, Robb M
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Apr 2016: n/a.
Abstract: None available.
Full text: PERTH, Australia--As gas exporters from the U.S. to Australia ramp up their output, the gulf between buyers and sellers over prices for the energy source is widening. A growing glut of exported natural gas coming onto world markets is handing pricing power to buyers such as power utilities. They are questioning the long-held industry practice of contracting long-term gas supply deals linked to oil prices, pushing instead for shorter and more flexible deals that reflect the world's excess supply and currently low market prices. That is bad news for producers, from oil majors like Royal Dutch Shell PLC to state-owned behemoths like Malaysia's Petroliam Nasional Bhd., known as Petronas. Such companies have plowed billions into massive and complex plants that chill gas into liquid form for export by sea, and now need prices to stay high to ensure an adequate return on their investments. While companies recognize the need to accept different ways of pricing their gas, they argue gas buyers are being unrealistic about how much they will need to pay. "Markets evolve...I don't need to be proscriptive in what that pricing mechanism might be, but it will have to be sufficient to underpin new development," said John Watson, chief executive of Chevron Corp., which spearheaded the $54 billion Gorgon LNG project in western Australia, which has just produced its first gas. "Right now customers and buyers aren't in that space," Mr. Watson said at a major industry conference in Perth this week. Much of the world's new supply of liquefied natural gas, usually known as LNG, had been projected to flow through Asia, where many countries are looking to shift power generation away from heavily-polluting fuels like coal. But appetite in this region hasn't grown as strongly as expected as economies in China and elsewhere cool. The average spot price for LNG slumped by 39% in Asia in the past year to $4.460 per million British thermal units in April, according to price reporting agency Platts. In the U.S., benchmark natural gas closed Thursday at $1.97 per mmBTU, down just 27% from a year ago. "Asia has always been regarded as a bottomless pit, but now seems set to confound expectations," said Anne-Sophie Corbeau, a fellow at King Abdullah Petroleum Studies and Research Center in Riyadh. For sure, global trade in LNG is still expected to grow to as much as 420 million metric tons a year by 2020, up to 40% higher than in 2014, Ms. Corbeau said. About 40% of the new LNG export capacity will come from the U.S., which a decade ago was expected to become a bigger gas importer than Japan. The problem is that demand isn't keeping pace: The LNG market has been oversupplied since late 2014. That is expected to continue: The global gas market could be left with 70 million tons in uncontracted supply by 2021, analysts at Wood Mackenzie now estimate. That is enough to supply South Korea, China and India for a year. Buyers also argue linking gas contracts to oil prices is outdated, given the differing dynamics in each market: Gas is used far more for power generation than oil. The U.S.'s rise as an exporter is a further reason the oil peg may wither, because sales from there tend to be benchmarked to gas prices at Henry Hub, a delivery point in Louisiana. Already, sales of LNG on the spot market and via short-term contracts lasting less than four years had risen to 29% of trade in 2014 from 5.4% in 2000, and are likely to grow further even as the volume of gas trading also rises, Ms. Corbeau said. "People are understandably more cost conscious and expecting the price of LNG to reflect more adequately what is going on in the marketplace," said Yuji Kakimi, president of fuel procurement at JERA Co., a joint-venture between two big Japanese utilities that has emerged as the world's largest buyer of LNG. He said JERA now plans to buy LNG using contracts of varying length, and move away from using oil as a pricing reference. LNG producers, though, prefer long-term purchase agreements--sometimes lasting 20 years or more -- to lock in revenue in order to secure funding for their expensive production facilities. Industry executives, such as Ben van Beurden, CEO of Royal Dutch Shell PLC, said much of global LNG trade will continue to be underpinned by long-term supply deals. "If I were to be in their shoes, I'd try to have a mix of these types of formulas in order to cover the various possibilities for the evolution of the gas price and the oil price," Patrick Pouyanné, CEO of France's Total SA, said at the Perth conference. Write to Dan Strumpf at daniel.strumpf@wsj.com and Robb M. Stewart at robb.stewart@wsj.com Credit: By Dan Strumpf and Robb M. Stewart
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 17, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781448763
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781448763?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Set to Fall After Producers Fail to Reach Deal at Doha; Hopes of a deal had helped oil prices rally in recent weeks
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Apr 2016: n/a.
Abstract:
Related * No Agreement on Oil Freeze at Doha Meeting * U.S. Energy Producers Remain Leery * Barrel Breakdown: The Cost of Producing a Barrel * Oil Worker Strike Cuts in Half Kuwait Crude Production * 5 Things to Watch in Asian Markets After Doha and IMF Meetings Underscoring investors concerns, stock markets in the Middle East, which trade on Sunday, fell despite closing before the meeting had ended.
Full text: Oil prices are set to tumble on Monday after major producers failed to reach a much anticipated deal to freeze crude output, analysts said. At a meeting in Doha on Sunday, oil producers that supply nearly half of the world's output didn't reach a deal to curb their production after Saudi Arabia appeared to walk away from any agreement that didn't include geopolitical rival Iran. Hopes of a deal had helped oil prices rally by around 30% from February when the idea of a freeze was first suggested by producers, including Russia and several from the Organization of the Petroleum Exporting Countries. U.S. crude settled at $41.50 a barrel on Friday, while Brent, the international benchmark, ended at $43.84 a barrel. Now, most of those gains could be eroded in a market that has already endured a turbulent year, analysts say. "This is an extremely bearish scenario and we will probably see a knee-jerk reaction on the market," said Abhishek Deshpande, oil analyst at Natixis. "Prices could touch $30 a barrel within days." Mr. Deshpande said that most of the recent rally was supported by the idea that some form of a deal could happen. The failed talks will "seriously hurt investor confidence," he said. The key sticking point in the negotiations was Iran, which has ruled out capping its own production. Tehran didn't send a representative to the Doha talks. Iran had only recently returned to international oil markets after sanctions were lifted in January, and the country wants to regain lost market share. Iran, which pumped around 3.1 million barrels a day in February, plans to raise its output to 4 million barrels a day. "OPEC has once again been high on promises but low on delivery as politics once more got in the way," said Ole Hansen, head of commodity strategy at Saxo Bank. After the failed talks on Sunday, Mr. Hansen sees crude trading in the $35 to $40 a barrel range in the current quarter. Speculation over whether a deal could be reached has influenced the market since Saudi Arabia, Venezuela, Russia and Qatar said on Feb. 16 they would freeze oil production at January levels if other producers joined in. Some, such as Kuwait and the United Arab Emirates, did express support for the deal. But the rally then stalled as Saudi Arabia indicated that it would only agree to curb production if still more producers followed suit. Prices, though, have continued to hover at around $40 a barrel as investors still bet on a deal and others took comfort from falls in production in some key producers, in particular the U.S. "A lot of hedge funds have been very vocal in recent weeks about the end of the oil rout. What are they going to do now, when half of the world production will be unrestrained?" said Hamza Khan, head of commodities strategy at ING Bank. Hedge funds and other money managers expanded their net-long position in U.S. crude--or bets that prices will rise -- by 11% in the week ended Tuesday, CFTC data showed Friday. If investors now start unwinding these bullish positions, this could add pressure to prices, analysts said. "The market was expecting some kind of a deal -- we got nothing today," he said. Mr. Khan sees prices falling quickly toward $35 a barrel. Related * No Agreement on Oil Freeze at Doha Meeting * U.S. Energy Producers Remain Leery * Barrel Breakdown: The Cost of Producing a Barrel * Oil Worker Strike Cuts in Half Kuwait Crude Production * 5 Things to Watch in Asian Markets After Doha and IMF Meetings Underscoring investors concerns, stock markets in the Middle East, which trade on Sunday, fell despite closing before the meeting had ended. Saudi Arabia's Tadawul index ended down 1.5%, its first decline in four trading days. The Dubai Financial Market's General Index lost 0.7% while the Qatar Exchange's main QE Index fell 0.5%. A fall in the price of crude will add further pressure to oil producers who have already been hit hard this year. Steep falls in crude will also weigh on equity markets more generally. Equities have often moved in lockstep with oil this year. Bank stocks, for instance, many of which have large energy portfolios, have been pressured by the declines in oil. Even those investors who had been skeptical that a deal would make a huge difference to production--not least because big producers would be freezing their crude output at current high levels --- believed agreement in Doha would have sent a positive signal to the market That is because a deal would indicate that producers were willing to tackle an oversupply that has pressured prices for almost two years now, they said. The failure to agree to a freeze will now likely prolong the glut. Last year, the world was producing about 2 million barrels of oil a day more than there is demand for. While U.S. output has begun to slowly decline as shale drillers pare back amid the price rout, other producers have been pumping flat out. Saudi Arabia has kept producing above 10 million barrels a day since last year in a bid to gain market share. Mr. Deshpande estimated that the market will be oversupplied by over one million barrels a day this year. "After the failed freeze, the market just can't balance until early 2017," he said. "That is very bearish for prices." Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Petroleum industry; Stock exchanges; Investments; Crude oil prices; Petroleum production; Hedge funds
Location: Iran Russia United States--US Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 17, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781451865
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781451865?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall After Producers Fail to Reach Deal at Doha; Hopes of a deal had helped oil prices rally in recent weeks
Author: Kantchev, Georgi; Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
Related * 5 Questions for Oil Markets After the Doha Meeting * No Agreement on Oil Freeze at Doha Meeting * U.S. Energy Producers Remain Leery * Barrel Breakdown: The Cost of Producing a Barrel * Oil Worker Strike Cuts in Half Kuwait Crude Production * 5 Things to Watch in Asian Markets After Doha and IMF Meetings Even those investors who had been skeptical that a deal would make a huge difference to production--not least because big producers would be freezing their crude output at current high levels--believed agreement in Doha would have sent a positive signal to the market.\n
Full text: Oil prices opened sharply lower in Asian trading hours on Monday after major oil producers ended their meeting in Doha, Qatar, over the weekend without reaching an agreement to cap production. Hopes for a deal among major producers, including several from the Organization of the Petroleum Exporting Countries and Russia, were a main driver in a rally that lifted U.S. crude prices more than 50% from their February lows. U.S. crude settled at $41.50 a barrel on Friday. Now, much of those gains could be eroded in a market that has already endured a turbulent year, analysts say. U.S. crude was recently trading 4.41% lower at $38.58 a barrel and Brent down 3.94% at $41.39 a barrel. "This is an extremely bearish scenario," said Abhishek Deshpande, oil analyst at Natixis. "Prices could touch $30 a barrel within days." Steep falls in crude could also weigh on equity markets more generally. Stocks have often moved alongside oil this year. Bank shares, for instance, many of which have large energy portfolios, have been pressured by the declines in oil. At the meeting in Doha, oil producers that supply nearly half of the world's output failed to reach a deal to curb their production after Saudi Arabia appeared to walk away from any agreement that didn't include geopolitical rival Iran. Iran has ruled out capping its own production. It had only recently returned to international oil markets after sanctions were lifted in January, and the country wants to regain lost market share. Mr. Deshpande said that most of the recent rally was supported by the idea that some form of a deal could happen. The failed talks will "seriously hurt investor confidence," he said. Hedge funds and other money managers expanded their net-long position in U.S. crude--or bets that prices will rise--by 11% in the week ended Tuesday, Commodity Futures Trading Commission data showed Friday. If investors now start unwinding these bullish positions, this could add pressure to prices, analysts said. "You're going to see an exit of long positions," said Jason Schenker, president of Prestige Economics in Austin, Texas, adding that prices could revisit the 13-year lows reached in the first quarter. "The assumption that there was going to be an actual freeze on supply was overestimated." Still, other market watchers said that prices are unlikely to fall back to those previous lows because U.S. production is falling. Concerns about weaker demand in China may also be ebbing. "You've got to be more confident in the market today than you were three months ago," said David Zusman, chief investment officer at Talara Capital Management, which manages $500 million. "I don't think actions of OPEC will be required to balance this market anyhow. You've got a combination of improved demand as well as declining supplies." Steven Kopits, president of consulting firm Princeton Energy Advisors, added, "the view that the market will balance in the third quarter has gained some traction." Related * 5 Questions for Oil Markets After the Doha Meeting * No Agreement on Oil Freeze at Doha Meeting * U.S. Energy Producers Remain Leery * Barrel Breakdown: The Cost of Producing a Barrel * Oil Worker Strike Cuts in Half Kuwait Crude Production * 5 Things to Watch in Asian Markets After Doha and IMF Meetings Even those investors who had been skeptical that a deal would make a huge difference to production--not least because big producers would be freezing their crude output at current high levels--believed agreement in Doha would have sent a positive signal to the market. A deal would have indicated that producers were willing to tackle an oversupply that has pressured prices for almost two years now, they said. --Jenny W. Hsu contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev and Nicole Friedman
Subject: Petroleum industry; Agreements; Price increases
Location: Iran Qatar Russia United States--US
Company / organization: Name: Commodity Futures Trading Commission; NAICS: 926140, 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781455831
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781455831?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduc tion or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Moody's Ratings Downgrades Become Another Thorn in Oil Patch; The bond rater has deprived 19 energy companies of their investment grades this year
Author: Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
Companies that lose investment-grade ratings, in addition to facing higher borrowing costs, can also have a harder time doing business with counterparties such as foreign governments, a potentially big problem for large natural-resource companies with global operations, said Brian Gibbons, senior oil and gas analyst at the research firm CreditSights.
Full text: Moody's Investors Service is emerging as a new scourge for energy firms. The bond rater has deprived 19 energy companies of their investment-grade ratings this year, dropping many several notches into the deeper reaches of high-yield, or junk, territory. The sweep through the sector by Moody's Investors Service, a unit of Moody's Corp., reflects the firm's forecast that commodity prices will rebound little in coming years as well as its new emphasis on financial metrics such as free cash flow over other factors such as scale and asset quality. Moody's says the commodity-price plunge has necessitated the shift. Though not everyone has agreed with the Moody's analysis, the downgrades have still reinforced how much the oil-price decline since 2014 has reshaped the energy industry, leaving even large firms with sterling reputations at risk of facing the same sort of cash crunch as smaller competitors. "We have to call them like we see them," Steve Wood, managing director of the Moody's oil and gas team, said in an interview. While the firm hasn't formally changed its methodology for rating energy companies and continues to take nonfinancial metrics into account, its long-standing approach "wasn't contemplated to accommodate a 70% drop in oil prices," he said. Highlighting the difference between Moody's and its rating-agency peers on this issue, Standard & Poor's Ratings Services rates only four of the 19 companies that lost an investment-grade rating at Moody's as below investment grade, while Fitch Ratings rates two below investment grade. Meanwhile, just two energy companies that have been downgraded to high yield by S&P or Fitch since the start of 2015 still have investment-grade ratings from Moody's. Although S&P and Fitch have factored in lower commodity prices into their ratings decisions, both firms have somewhat less pessimistic outlooks than Moody's and have stuck closer to their traditional approaches to the sector by, among other things, attaching significant importance to the size and scale of companies, investors and analysts say. Moody's more bearish outlook for oil prices may work in its favor. Talks among major oil-producing nations in Doha, Qatar, collapsed on Sunday without an agreement to freeze production. That result is expected to weigh on oil prices for at least the near term. So far, the market has largely shaken off the Moody's reassessment of the sector, reflecting the continuing debate over where oil prices are going. Energy-firm bonds generally trade at lower levels than a year ago. But they have rebounded since suffering a deep selloff along with other risky debt early in 2016. One company that Moody's recently downgraded to junk status, Anadarko Petroleum Corp., nevertheless managed to raise large sums in the bond market at favorable terms compared with what it would have needed to pay a month earlier. In a March 1 conference call with analysts, Anadarko Chief Executive Al Walker said he was "very disappointed" with Moody's for downgrading Anadarko two notches to its highest junk rating. Noting that S&P had recently affirmed Anadarko's investment-grade triple-B rating, he argued that the new ratings approach from Moody's failed to account for Anadarko's "character," shown when it survived previous downturns. Anadarko then sold $3 billion of bonds, which received strong demand from investors. Its new 10-year bonds were priced to yield 3.6 percentage points above Treasurys, more than the 0.9 percentage point "spread" for its 10-year bonds issued in 2014, according to S&P Global Market Intelligence, but roughly 2 percentage points less than where those notes traded in the secondary market as recently as February, according to MarketAxess Holdings Inc. A higher gap in yield means that investors are demanding additional compensation to own a firm's bonds. "Once the dust settled, people went back to fundamentals and said this is one of the best-run companies, and it created an opportunity for a lot of investors," said Vivek Pal, managing director and desk strategist at Jefferies LLC. Firms that Moody's has dropped to junk are in a particularly vulnerable position because they need investment-grade ratings from two out of the three ratings firms to remain in the Barclays investment-grade corporate-bond index and thereby retain access to a large pool of investors that aren't allowed to invest in bonds outside of the index. Companies that lose investment-grade ratings, in addition to facing higher borrowing costs, can also have a harder time doing business with counterparties such as foreign governments, a potentially big problem for large natural-resource companies with global operations, said Brian Gibbons, senior oil and gas analyst at the research firm CreditSights. Two companies that Moody's dropped to high yield, EnLink Midstream Partners LP and Encana Corp., both sought and received first-time investment-grade ratings from Fitch to pair with the ones they already had from S&P, demonstrating the importance for companies of remaining in the Barclays index. Moody's expects oil prices to average $33 a barrel this year and $43 a barrel by 2018. A recent survey of 13 investment banks by The Wall Street Journal predicted that Brent, the global crude-oil benchmark, will average $69 a barrel and West Texas Intermediate. the U.S. benchmark, will average $66 a barrel in 2018. Regardless of whether they agree with Moody's, investors still recognize the significance of its actions. "Our philosophy is that we don't rely on the rating agencies, that we do our own internal work and we invest with a long-term perspective in regards to how these companies are going to look into the future, but you do have to acknowledge the fact that the rating agencies do have an impact on the markets," said Troy Johnson, portfolio manager at Westcore Funds, which manages roughly $1.5 billion of fixed-income assets. Georgi Kantchev contributed to this article. Write to Sam Goldfarb at sam.goldfarb@wsj.com Credit: By Sam Goldfarb
Subject: Ratings & rankings; Bond issues; Commodities; Prices; Energy industry; International finance
Company / organization: Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Anadarko Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781456050
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781456050?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
No Agreement on Oil Freeze at Doha Meeting; Unclear when officials might meet again
Author: Faucon, Benoit; Said, Summer; Spindle, Bill
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract: None available.
Full text: DOHA, Qatar--Oil producers that supply almost half the world's crude failed Sunday to negotiate a production freeze intended to strengthen prices. The talks collapsed after Saudi Arabia surprised the group by reasserting a demand that Iran also agree to cap its oil production. Oil prices had rallied in recent weeks on speculation that Saudi Arabia might successfully lead an initiative between members of the Organization of the Petroleum Exporting Countries and Russia, which joined the talks. A deal would have marked a new level of cooperation between non-OPEC countries and OPEC members that producers hoped would keep prices above January lows of $26 a barrel. U.S. crude plunged 6.7% to $37.70 a barrel and Brent was down 6.9% to $40.14 a barrel in early Asian trading. While markets could be disappointed by the failure to freeze oil production in the short term, the longer-run impact could well be blunted by the reality that low prices are already pushing out many cash-strapped producers, making a formal freeze less important. The U.S. Energy Information Administration said in its short-term energy outlook last week that U.S. crude production fell by 90,000 barrels a day in March, from February. The agency lowered its domestic-output forecast for this year to 8.6 million barrels a day, and to 8 million barrels a day in 2017. That is off from a multidecade peak of 9.4 million barrels a day last year. Energy Aspects, a London-based energy consultancy, recently revised its estimates for global, non-OPEC production declines this year to 700,000 barrels a day, from 200,000 to 300,000 in earlier forecasts. It expects global demand to begin outstripping supply in June, which would draw down swollen crude stockpiles. Saudi Arabia's position that Iran join the freeze or there would be no deal scuttled the discussions before they started, participants said, and the meeting descended into sniping and confusion. On Saturday, the day before the meeting, Saudi Arabia's powerful deputy crown prince, Mohammed bin Salman, was quoted by Bloomberg News as ruling out any deal that didn't include Iran. Other Saudi officials in the delegation had signaled on Saturday evening that the kingdom would consider a freeze without Iran's participation, and a draft agreement was circulated, according to participants. Related Coverage * 5 Questions for Oil Markets After Doha * Saudi, Iranian Rivalry Imperils Doha Oil Deal * As Oil Producers Meet, Skepticism Persists Over Prospects of Freeze * Iran Won't Attend Doha Oil Meeting * Oil Prices Slide in Volatile Trade * U.S. Energy Producers Remain Leery * At a Glance: The Oil World Descends on Doha * Barrel Breakdown: The Cost of Producing a Barrel * Russia Opens Up New Oil Front: India Then, in the very early hours Sunday morning, veteran Saudi oil minister Ali al-Naimi received a call from Riyadh, and then informed his delegates that they would need to scrap the draft agreement for a freeze that didn't include Iran, according to a person familiar with events. The outcome Sunday seemed to underscore the pre-eminence of the deputy crown prince over the kingdom's oil policy, and raised questions about the motivations driving oil policies long directed by Mr. al-Naimi. "Since 1995, it's been all about Ali al-Naimi, and he seems to have been overruled by his boss," said Michael Wittner, global head of oil market research at Société Générale. "We have a new player." Upon taking power in January 2015, King Salman bin Abdul Aziz created a new body--the Council of Economic and Development Affairs--to oversee the overall economy, finances and oil industry. He appointed his son to oversee it. But it was unclear how much direct control the deputy crown prince would exercise over oil production, export policy and relations with OPEC, especially with Mr. al-Naimi retaining his post as oil minister. Saudi Arabia's renewed opposition to a freeze without Iran underscored that the deputy crown prince "outranks everyone else in Saudi when it comes to economic policy," said Torbjorn Kjus, an oil market analyst at Norway's DNB Bank ASA in a note Wednesday. Mr. Kjus said last week that prices could potentially fall back to $25 a barrel if no freeze deal was struck. Iran had already declined to participate in the negotiations. It had ruled out any freeze until its production recovered the nearly one million barrels a day lost after international sanctions were imposed over its nuclear program. The country was recently released from the sanctions and has said it planned to increase production to 4 million barrels a day, from 3.1 million barrels. Market observers said such an increase would take years. Iran had always been a sticking point for Sunday's meeting of global oil producers. Another question was whether any deal would be considered strong enough to convince energy markets that producers were serious about reining in production and bolstering prices. Even Mr. al-Naimi had said for months that Saudi Arabia would focus on meeting customer demand for crude rather than trying to influence global oil prices--alone or in coordination with others--if that meant giving up market share, especially to its political and military rival Iran. Saudi Arabia's inexpensive output gives it a major competitive advantage over other producers around the world. The kingdom increasingly must feed its own growing fleet of refineries in Saudi Arabia and Asia while trying to maintain its share of global crude trade. "They're starting to see that a less-risky strategy is just getting their oil out of the ground sooner than later," said Jim Krane, a fellow at Rice University's Baker Institute for Public Policy. Erin Ailworth contributed to this article. Write to Benoit Faucon at benoit.faucon@wsj.com , Summer Said at summer.said@wsj.com and Bill Spindle at bill.spindle@wsj.com Credit: By Benoit Faucon, Summer Said and Bill Spindle
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781456194
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781456194?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks Fall in Asia After Failed Oil Deal; Japan suffers steepest losses in region as it also deals with fallout from earthquakes and the strong yen
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
While firm estimates of the total economic damage from the quake weren't available as of Monday, BNP Paribas said in a note that it expects the disruption in Japan's auto supply chain to lead to a contraction in the country's industrial production in April, thereby increasing the probability of negative economic growth during the second quarter.
Full text: A failed oil deal out of Doha sent stock markets in Asia down Monday, with Japan suffering the steepest losses as it also faced fallout from earthquakes and a renewed surge of its currency. Japan's Nikkei Stock Average tumbled 3.4%--its worst daily percentage loss since April 1. The Nikkei is down 14.5% for the year, making it Asia's worst-performing major stock benchmark so far in 2016. Insurers and auto makers were among the worst performers in Japan. Casualty insurer MS&AD Insurance Group Holdings Inc. ended down 7.3% and Toyota Motor Corp. finished down 4.8%. Related * Oil Prices Fall After Producers Fail to Reach Deal at Doha * Chinese Lender's Woes Expose Its Global Tentacles * China Calms Anxiety With Economic Fixes * 5 Things to Watch in Asian Markets After Doha and IMF Meetings Toyota curtailed production at most of its plants in Japan because of a components shortage after a series of a series of earthquakes in southern Japan's Kumamoto prefecture. Other Japanese companies also halted operations in the area due to the quake, which killed more than 40 people. While firm estimates of the total economic damage from the quake weren't available as of Monday, BNP Paribas said in a note that it expects the disruption in Japan's auto supply chain to lead to a contraction in the country's industrial production in April, thereby increasing the probability of negative economic growth during the second quarter. The yen didn't help Japan's day. The currency, nearing a fresh 18-month high, touched as strong as 107.81 yen to one U.S. dollar. A stronger currency hurts companies at home by making their exports less competitive and devaluing their repatriated earnings. "We are seeing some impact from the earthquakes," said Yoshihiro Okumura, general manager of research at Chibagin Asset Management. "From our previous experiences, though, the effects are likely limited in the long run." Elsewhere, the Shanghai Composite Index lost 1.4% and the Hang Seng Index fell 0.7%. South Korea's Kospi and Australia's S&P/ASX 200 were each off 0.3% and 0.4% respectively. "A lot of this is from the oil moves," said Andy Maynard, head of sales trading in Asia Pacific for HSBC. But, he added "the earthquake has caused a lot of local selling in the [Japanese] market." Meanwhile, Sunday's failed oil deal among major petroleum producers sent oil prices sharply lower at the start of Asian trading. Brent crude oil then eased off its lows of the session, although prices were still down 4.8% at $41.06 a barrel by the afternoon in Asia. Energy stocks in Australia bore the brunt of a oil's renewed bout of volatility. The sector fell almost 3% on the S&P/ASX 200, while commodity producers BHP Billiton Ltd. and Rio Tinto Ltd. ended off 3% and 1.6% respectively. In Hong Kong, the energy sector was down 1.3% and shares of state-owned oil producer PetroChina Co. Ltd. lost 1.9%. HSBC's Mr. Maynard said that the weakness in Japanese financial institutions is part of a global selloff in sector this year, as investors worry that banks are cutting costs to pad weak earnings. Financials are also a key gauge of sentiment toward global economic growth, which has been sluggish. On Monday, banks on Japan's other leading benchmark, the Tokyo Stock Price Index (TOPIX) were off 3.6%. Mitsubishi UFJ Financial Group Inc. plunged 4.3%. Yoko Kubota and Kosaku Narioka contributed to this article. Write to Chao Deng at Chao.Deng@wsj.com Credit: By Chao Deng
Subject: Earthquakes; Petroleum industry; Stock exchanges; Prices; Economic growth
Location: Japan
Company / organization: Name: BHP Billiton; NAICS: 211111, 212231, 212234; Name: BNP Paribas; NAICS: 522110; Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781458068
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781458068?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall on Failed Oil Deal; Pare Some Losses; June Brent crude on London's ICE Futures exchange fell $1.69 to $41.41 a barrel
Author: Hsu, Jenny W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
The key driver behind the breakdown was Saudi Arabia's refusal to participate in the deal without its geopolitical rival Iran pledging to do the same. Since economic sanctions against Iran were lifted in January, the country has vowed to keep ramping up production until output is back up to at least 4 million barrels a day.
Full text: Crude-oil prices pared some losses in mid-Asia trade Monday after tumbling more than 6% in the opening hour following a failure of the key producers to agree on a production cap that could have tightened up the supply market. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $38.55 a barrel at 0433 GMT, down $1.81 in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell $1.69 to $41.41 a barrel. The sharp decline in oil spilled over to regional stocks. Energy stocks in Hong Kong and Australia were all off about 2.8%, while the broader Hang Seng Index and S&P/ASX 200 benchmarks were down fractionally--by 0.9% and 0.2%. Japan's Nikkei Stock Average was off 3%, as the Japanese yen came close to reaching a fresh 18-month high. Elsewhere, the Shanghai Composite Index slipped 1.3% and South Korea's Kospi was off 0.5%. In Australia, commodity producers BHP Billiton Ltd.(BHP.AU) and Rio Tinto Ltd.(RIO) were off 2.7%, 1.1%, respectively. The country's currency was also taking a hit with the Australian dollar falling by more than 0.7% against the U.S. dollar. In Hong Kong, the state-owned oil producer PetroChina Co. Ltd.(0857.HK) was off 2.3%. Over the weekend, Russia and heavyweight producers inside the Organization of the Petroleum Exporting Countries walked away from a much-anticipated meeting empty handed. The group had gathered to discuss a production cap to limit output to January's levels as a way ease the global oversupply. The key driver behind the breakdown was Saudi Arabia's refusal to participate in the deal without its geopolitical rival Iran pledging to do the same. Since economic sanctions against Iran were lifted in January, the country has vowed to keep ramping up production until output is back up to at least 4 million barrels a day. While the market has largely expected such a no-deal outcome, the prospect of a bigger glut at a time when demand growth is likely to slow still does not bode well with the sentiment. "The market has mostly priced in the fact production rate will stay the same even before the meeting. But a failure to reach an agreement is bearish for sentiment and prices are likely to fall further later during the U.S. trading hours," said Nelson Wang, an energy analyst at CLSA who forecasts U.S. oil prices to drop as low as $30 a barrel. Hopes for a deal were a main catalyst in a rally that lifted U.S. crude prices more than 50% from their February lows. Much of those gains are likely to get wiped out, as oil producers might be looking to increase production to protect their market shares, analysts say. Morgan Stanley warns that if the kingdom was to lift production from current 10.2 million barrels a day to 11 million barrels a day as threatened while other players also show no restraint, "rebalancing could be pushed all the way into 2018." Still, some market watchers are taking comfort in the declining production in the from of shale players in the U.S. Crude production in the U.S. is forecast to fall to an average of 8.6 million barrels a day in 2016 and 8 million barrels a day in 2017, said the U.S. Energy Information Administration. "Now it is a question of speed to see if the rate of U.S. production decline can offset the growth in OPEC production. If not, the oversupply will linger longer and prices will stay depressed," Mr. Wang said. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--fell 377 points to $1.4235 a gallon, while May diesel traded at $1.1979, 343 points lower. ICE gasoil for May changed hands at $356.00 a metric ton, down $8.50 from Friday's settlement. Write to Jenny W. Hsu at jenny.hsu@wsj.com Credit: By Jenny W. Hsu
Subject: Stock exchanges; Petroleum industry; Crude oil prices
Location: United States--US Australia Asia Hong Kong
Company / organization: Name: PetroChina Co Ltd; NAICS: 424720; Name: Rio Tinto Group; NAICS: 212112, 212291; Name: BHP Billiton; NAICS: 211111, 212231, 212234; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781461620
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781461620?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further rep roduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Bonds Lose Overnight Rally on Oil Slump
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
0207 GMT [Dow Jones] Declining yields in the U.S. dollar bond market and the difficulty Chinese property developers face in transferring funds from onshore to offshore in recent months are encouraging developers to return to the offshore market for funding, says a banker from a U.S. investment bank.
Full text: The bond market has lost the overnight haven rally driven by the oil slump. The impact from oil-producers' failure to reach an agreement on production freeze was the most pronounced during the Asian trading session. The 10-year Treasury yield fell to 1.722% from flight to safety, but investors have since booked profit. Traders say the Treasury debt market is also pressured due to new corporate debt sales. U.S. Treasury yields near record low encouraged firms to sell bonds to lock in favorable borrowing costs. U.S. mortgage rates have fallen lately--a boon for those who can refinance. The 10-year yield was recently at 1.766% vs 1.753% Friday. Write to Min Zeng at min.zeng@wsj.com Credit: By Min Zeng
Subject: Bond issues; International finance; Funding
Location: United States--US Japan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781467587
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781467587?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Talks to Prop Up Oil Prices Fail
Author: Faucon, Benoit; Said, Summer; Spindle, Bill
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Apr 2016: A.1.
Abstract:
The outcome Sunday seemed to underscore the pre-eminence of the deputy crown prince over the kingdom's oil policy, and raised questions about the motivations driving oil policies long directed by Mr. al-Naimi. "Since 1995, it's been all about Ali al-Naimi, and he seems to have been overruled by his boss," said Michael Wittner, global head of oil market research at Societe Generale.
Full text: DOHA, Qatar -- Oil producers that supply almost half the world's crude failed Sunday to negotiate a production freeze intended to strengthen prices. The talks collapsed after Saudi Arabia surprised the group by reasserting a demand that Iran also agree to cap its oil production. Oil prices had rallied in recent weeks on speculation that Saudi Arabia might successfully lead an initiative between members of the Organization of the Petroleum Exporting Countries and Russia, which joined the talks. A deal would have marked a new level of cooperation between non-OPEC countries and OPEC members that producers hoped would keep prices above January lows of $26 a barrel. U.S. crude plunged 4.6% to $38.49 a barrel and Brent was down 4.2% to $41.27 a barrel in early Asian trading Monday. While markets could be disappointed by the failure to freeze oil production in the short term, the longer-run impact could well be blunted by the reality that low prices are already pushing out many cash-strapped producers, making a formal freeze less important. The U.S. Energy Information Administration said in its short-term energy outlook last week that U.S. crude production fell by 90,000 barrels a day in March, from February. The agency lowered its domestic-output forecast for this year to 8.6 million barrels a day, and to 8 million barrels a day in 2017. That is off from a multidecade peak of 9.4 million barrels a day last year. Energy Aspects, a London-based energy consultancy, recently revised its estimates for global, non-OPEC production declines this year to 700,000 barrels a day, from 200,000 to 300,000 in earlier forecasts. It expects global demand to begin outstripping supply in June, which would draw down swollen crude stockpiles. Saudi Arabia's position that Iran join the freeze or there would be no deal scuttled the discussions before they started, participants said, and the meeting descended into sniping and confusion. On Saturday, the day before the meeting, Saudi Arabia's powerful deputy crown prince, Mohammed bin Salman, was quoted by Bloomberg News as ruling out any deal that didn't include Iran. Other Saudi officials in the delegation had signaled on Saturday evening that the kingdom would consider a freeze without Iran's participation, and a draft agreement was circulated, according to participants. Then, in the very early hours Sunday morning, veteran Saudi oil minister Ali al-Naimi received a call from Riyadh, and then informed his delegates that they would need to scrap the draft agreement for a freeze that didn't include Iran, according to a person familiar with events. The outcome Sunday seemed to underscore the pre-eminence of the deputy crown prince over the kingdom's oil policy, and raised questions about the motivations driving oil policies long directed by Mr. al-Naimi. "Since 1995, it's been all about Ali al-Naimi, and he seems to have been overruled by his boss," said Michael Wittner, global head of oil market research at Societe Generale. "We have a new player." Upon taking power in January 2015, King Salman bin Abdul Aziz created a new body -- the Council of Economic and Development Affairs -- to oversee the overall economy, finances and oil industry. He appointed his son to oversee it. But it was unclear how much direct control the deputy crown prince would exercise over oil production, export policy and relations with OPEC, especially with Mr. al-Naimi retaining his post as oil minister. Saudi Arabia's renewed opposition to a freeze without Iran underscored that the deputy crown prince "outranks everyone else in Saudi when it comes to economic policy," said Torbjorn Kjus, an oil market analyst at Norway's DNB Bank ASA in a note Wednesday. Mr. Kjus said last week that prices could potentially fall back to $25 a barrel if no freeze deal was struck. Iran had already declined to participate in the negotiations. It had ruled out any freeze until its production recovered the nearly one million barrels a day lost after international sanctions were imposed over its nuclear program. The country was recently released from the sanctions and has said it planned to increase production to 4 million barrels a day, from 3.1 million barrels. Market observers said such an increase would take years. Iran had always been a sticking point for Sunday's meeting of global oil producers. Another question was whether any deal would be considered strong enough to convince energy markets that producers were serious about reining in production and bolstering prices. Even Mr. al-Naimi had said for months that Saudi Arabia would focus on meeting customer demand for crude rather than trying to influence global oil prices -- alone or in coordination with others -- if that meant giving up market share, especially to its political and military rival Iran. --- Erin Ailworth contributed to this article. Credit: By Benoit Faucon, Summer Said and Bill Spindle
Subject: Petroleum industry; Cartels; Crude oil prices; Negotiations; Petroleum production
Location: Qatar United States--US Iran Saudi Arabia
Company: Organization of Petroleum Exporting Countries--OPEC
Classification: 8510: Petroleum industry; 9178: Middle East
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Apr 18, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781478845
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781478845?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Moody's Another Thorn in Oil Patch
Author: Goldfarb, Sam
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Apr 2016: C.1.
Abstract:
Companies that lose investment-grade ratings, in addition to facing higher borrowing costs, can also have a harder time doing business with counterparties such as foreign governments, a potentially big problem for large natural-resource companies with global operations, said Brian Gibbons, senior oil and gas analyst at the research firm CreditSights.
Full text: Moody's Investors Service is emerging as a new scourge for energy firms. The bond rater has deprived 19 energy companies of their investment-grade ratings this year, dropping many several notches into the deeper reaches of high-yield, or junk, territory. The sweep through the sector by Moody's Investors Service, a unit of Moody's Corp., reflects the firm's forecast that commodity prices will rebound little in coming years as well as its new emphasis on financial metrics such as free cash flow over other factors such as scale and asset quality. Moody's says the commodity-price plunge has necessitated the shift. Though not everyone has agreed with the Moody's analysis, the downgrades have still reinforced how much the oil-price decline since 2014 has reshaped the energy industry, leaving even large firms with sterling reputations at risk of facing the same sort of cash crunch as smaller competitors. "We have to call them like we see them," Steve Wood, managing director of the Moody's oil and gas team, said in an interview. While the firm hasn't formally changed its methodology for rating energy companies and continues to take nonfinancial metrics into account, its long-standing approach "wasn't contemplated to accommodate a 70% drop in oil prices," he said. Highlighting the difference between Moody's and its rating-agency peers on this issue, Standard & Poor's Ratings Services rates only four of the 19 companies that lost an investment-grade rating at Moody's as below investment grade, while Fitch Ratings rates two below investment grade. Meanwhile, just two energy companies that have been downgraded to high yield by S&P or Fitch since the start of 2015 still have investment-grade ratings from Moody's. Although S&P and Fitch have factored in lower commodity prices into their ratings decisions, both firms have somewhat less pessimistic outlooks than Moody's and have stuck closer to their traditional approaches to the sector by, among other things, attaching significant importance to the size and scale of companies, investors and analysts say. The more bearish outlook for oil prices may work in favor of Moody's. Talks among major oil-producing nations in Doha, Qatar, collapsed on Sunday without an agreement to freeze production. That result is expected to weigh on oil prices for at least the near term. Oil prices fell early Monday. U.S. crude was down 4.6% to $38.49 a barrel and Brent was down 4.2% at $41.27. So far, the market has largely shaken off the Moody's reassessment of the sector, reflecting the continuing debate over where oil prices are going. Energy-firm bonds generally trade at lower levels than a year ago. But they have rebounded since suffering a deep selloff along with other risky debt early in 2016. One company that Moody's recently downgraded to junk status, Anadarko Petroleum Corp., nevertheless managed to raise large sums in the bond market at favorable terms compared with what it would have needed to pay a month earlier. In aMarch 1conference call withanalysts, Anadarko Chief Executive Al Walker said he was "very disappointed" with Moody's for downgrading Anadarko two notches to its highest junk rating. Noting that S&P had recently affirmed Anadarko's investment-grade triple-B rating, he argued that the new ratings approach from Moody's failed to account for Anadarko's "character," shown when it survived previous downturns. Anadarko then sold $3 billion of bonds, which received strong demand from investors. Its new 10-year bonds were priced to yield 3.6 percentage points above Treasurys, more than the 0.9 percentage point "spread" for its 10-year bonds issued in 2014, according to S&P Global Market Intelligence, but roughly two percentage points less than where those notes traded in the secondary market as recently as February, according to MarketAxess Holdings Inc. A higher gap in yield means that investors are demanding additional compensation to own a firm's bonds. "Once the dust settled, people went back to fundamentals and said this is one of the best-run companies, and it created an opportunity for a lot of investors," said Vivek Pal, managing director and desk strategist at Jefferies LLC. Firms that Moody's has dropped to junk are in a particularly vulnerable position because they need investment-grade ratings from two out of the three ratings firms to remain in the Barclays investment-grade corporate-bond index and thereby retain access to a large pool of investors that aren't allowed to invest in bonds outside of the index. Companies that lose investment-grade ratings, in addition to facing higher borrowing costs, can also have a harder time doing business with counterparties such as foreign governments, a potentially big problem for large natural-resource companies with global operations, said Brian Gibbons, senior oil and gas analyst at the research firm CreditSights. Two companies that Moody's dropped to high yield, EnLink Midstream Partners LP and Encana Corp., both sought and received first-time investment-grade ratings from Fitch to pair with the ones they already had from S&P, demonstrating the importance for companies of remaining in the Barclays index. --- Georgi Kantchev contributed to this article. Credit: By Sam Goldfarb
Subject: Bond issues; Crude oil prices; Energy industry; Credit ratings
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Classification: 8510: Petroleum industry; 3200: Credit management; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 18, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781478866
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781478866?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Finance: Oil Heads Lower as Freeze Falls Apart --- Prices turn bearish as Doha talks end without any deal to cap production
Author: Kantchev, Georgi; Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Apr 2016: C.3.
Abstract:
Hedge funds and other money managers expanded their net-long position in U.S. crude -- or bets that prices will rise -- by 11% in the week ended Tuesday, Commodity Futures Trading Commission data showed Friday.
Full text: Oil prices fell sharply in early Asian trading hours on Monday after major oil producers ended their meeting in Doha, Qatar, over the weekend without reaching an agreement to cap production. Hopes for a deal among major producers, including several from the Organization of the Petroleum Exporting Countries and Russia, were a main driver in a rally that lifted U.S. crude prices more than 50% from their February lows. U.S. crude settled at $41.50 a barrel on Friday. Now, much of those gains could be eroded in a market that has already endured a turbulent year, analysts say. In late morning, U.S. crude was down 4.6% to $38.49 a barrel and the global benchmark Brent was down 4.2% at $41.27 a barrel. "This is an extremely bearish scenario," said Abhishek Deshpande, oil analyst at Natixis. "Prices could touch $30 a barrel within days." Steep falls in crude could also weigh on equity markets more generally. Stocks have often moved alongside oil this year. Bank shares, for instance, many of which have large energy portfolios, have been pressured by the declines in oil. At the meeting in Doha, oil producers that supply nearly half of the world's output failed to reach a deal to curb their production after Saudi Arabia appeared to walk away from any agreement that didn't include geopolitical rival Iran. Iran has ruled out capping its own production. It had only recently returned to international oil markets after sanctions were lifted in January, and the country wants to regain lost market share. Mr. Deshpande said that most of the recent rally was supported by the idea that some form of a deal could happen. The failed talks will "seriously hurt investor confidence," he said. Hedge funds and other money managers expanded their net-long position in U.S. crude -- or bets that prices will rise -- by 11% in the week ended Tuesday, Commodity Futures Trading Commission data showed Friday. If investors now start unwinding these bullish positions, this could add pressure to prices, analysts said. "You're going to see an exit of long positions," said Jason Schenker, president of Prestige Economics in Austin, Texas, adding that prices could revisit the 13-year lows reached in the first quarter. "The assumption that there was going to be an actual freeze on supply was overestimated." Still, other market watchers said that prices are unlikely to fall back to those previous lows because U.S. production is falling. Concerns about weaker demand in China may also be ebbing. "You've got to be more confident in the market today than you were three months ago," said David Zusman, chief investment officer at Talara Capital Management, which manages $500 million. "I don't think actions of OPEC will be required to balance this market anyhow. You've got a combination of improved demand as well as declining supplies." Steven Kopits, president of consulting firm Princeton Energy Advisors, added, "the view that the market will balance in the third quarter has gained some traction." Even those investors who had been skeptical that a deal would make a huge difference to production -- not least because big producers would be freezing their crude output at current high levels -- believed agreement in Doha would have sent a positive signal to the market. A deal would have indicated that producers were willing to tackle an oversupply that has pressured prices for almost two years now, they said. Credit: By Georgi Kantchev and Nicole Friedman
Subject: Agreements; Crude oil prices; Petroleum production
Location: Iran Qatar Russia Saudi Arabia United States--US
Company: Organization of Petroleum Exporting Countries--OPEC
Classification: 8510: Petroleum industry; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: Apr 18, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781478957
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781478957?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks Near Elusive Record --- Inability to reach Doha pact on oil production threatens Dow's latest run at all-time high
Author: Vaishampayan, Saumya; Zeng, Min
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Apr 2016: C.1.
Abstract:
The number of advancing stocks compared with the number of declining stocks on the New York Stock Exchange has risen during the past two months and is higher than it was last May, according to the WSJ Market Data Group. The closer U.S. stocks get to record levels, the stronger the pressure on investors who have been holding a negative view on stocks to "throw in the towel and join the rally," said Donald Ellenberger, head of multisector strategies at Federated Investors, which had $361 billion in assets under management at the end of March.
Full text: After the Dow Jones Industrial Average kicked off 2016 with its worst-ever five-day start to a year, the blue-chip index is flirting with its all-time high. The momentum of the recent rally, which has sent the Dow up 14% from the year's low in February, could carry major U.S. indexes to fresh records. The outlook for stocks in coming months has improved since the Federal Reserve in March signaled a more cautious path for raising interest rates this year. Another spark has been a rebound in oil prices, which hit their 2016 bottom in the U.S. the same day as the Dow. But those gains came under threat Sunday as delegates from major oil-producing countries failed to reach an agreement to freeze crude-oil output at a meeting in Doha, Qatar. Stocks this year have often sold off when oil prices fell sharply. Oil prices opened sharply lower in early Asian trading hours on Monday. By late morning, U.S. oil was down 4.6% to $38.49 a barrel, while Brent crude, the global benchmark, was down 4.2% to $41.27. Asian stocks fell early Monday, led by Japan's Nikkei 225 Stock Average, which was down 2.6%. While the Dow's record is within reach, the index has also been there several times before and hasn't vaulted the hurdle, partly because global growth remains sluggish and the outlook for corporate earnings is grim. A series of attempts at a Dow record came late last year, following the first 10% pullback since 2011 in August. One run brought the Dow within 2.2% of its record of 18312.39, which it set May 19. The index is now back in familiar territory. Banks led a rally last week as lackluster results from some of the biggest U.S. lenders beat expectations, lifting the Dow to 17897.46. The index is 2.3% below its closing high, and the S&P 500 is 2.4% from its record close of 2130.82, set May 21. "The question is how much further the equity market can rally" given the extent and speed of its rebound over the past two months, said John Vail, chief global strategist at Nikko Asset Management, which had $153.7 billion in assets under management at the end of December. There are several signs that U.S. indexes could manage to surpass the records this time, analysts say. The gains have been broad. The number of advancing stocks compared with the number of declining stocks on the New York Stock Exchange has risen during the past two months and is higher than it was last May, according to the WSJ Market Data Group. The number of stocks on the NYSE hitting a 52-week high has also increased this year. Both indicators show that more stocks are participating in the rally. The closer U.S. stocks get to record levels, the stronger the pressure on investors who have been holding a negative view on stocks to "throw in the towel and join the rally," said Donald Ellenberger, head of multisector strategies at Federated Investors, which had $361 billion in assets under management at the end of March. Riskier bets have gained favor. Shares of smaller companies, which tend to have fewer sources of income that can offset each other in times of stress, have rallied along with their larger peers. The Russell 2000, the benchmark for small-company shares, has surged 19% since Feb. 11, outpacing the roughly 14% advances in the S&P 500 and Dow industrials. Similarly, junk bonds, which have a greater chance of default than high-grade corporate bonds, have rallied. The iShares iBoxx $ High Yield Corporate Bond exchange-traded fund, the biggest junk-bond ETF, has gained 9.1% since Feb. 11. "None of those indicators are going to tell you exactly what's going on, but when you have more of them confirming the trend in place, that's powerful," said Frank Cappelleri, executive director of institutional equities at broker Instinet LLC. Sentiment has become more positive than earlier this year, when investors were tossing around the possibility of a U.S. recession. The most recent American Association of Individual Investors survey, dated Thursday, showed 27.85% of investors were bullish, up from 17.9% on Jan. 14. However, investors are far from euphoric. The current level of bullishness, by this gauge, is below the average of 38.57% since the start of the survey in 1987 and significantly lower than the roughly 50% level hit at the start of 2015. Earnings projections and stock valuations, both powerful drivers of the market, are deterring some investors. "Expectations for [first-quarter earnings] are very low and easily beaten, but can only go so far to improve the outlook for stocks," said Gina Martin Adams, equity strategist at Wells Fargo Securities. "We probably do need to get [upbeat guidance] to justify the market pushing to new highs." The S&P 500 has a trailing price/earnings ratio of 18.4, higher than its 10-year average of 15.8, according to FactSet. Ahead of the first-quarter reporting season, earnings at S&P 500 companies were forecast to decline 8.5% from a year earlier, according to analysts polled by FactSet. Terri Spath, chief investment officer at Sierra Investment Management, which oversees $2.3 billion, is putting money to work in high-yield and emerging-market bonds, rather than stocks. Ms. Spath, who said the stock market is fairly valued, explains her approach as, "what's the next asset class where we could potentially see 10% gains?" Another factor that is making investors cautious: Despite the strong run-up in equity prices since mid-February, prices of havens such as U.S. government debt continue to remain stubbornly high. The yield on the benchmark 10-year Treasury note was 1.753% on Friday, less than 0.4 percentage point from its record closing low set in 2012. Yields fall as prices rise. --- Corrie Driebusch contributed to this article. Credit: By Saumya Vaishampayan and Min Zeng
Subject: Abreast of the market (wsj)
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 18, 2016
column: Abreast of the Market
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781479050
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781479050?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Slips After Output Deal Fails; Now that the biggest catalyst is gone, traders say it will be harder for crude to rally in the short term
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
Money managers, including hedge funds, held an unusually large number of bets as of April 12 that U.S. and Brent crude prices would rise, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. Without an immediate bullish driver, traders could start to close out those wagers, sending prices lower.
Full text: Oil prices careened wildly on Monday after the collapse of talks aimed at capping production left investors at odds over what factors will dominate trading in the weeks ahead. Prices fell more than 6% in overnight trading, slumping as news emerged that leaders of big oil-producing nations failed to reach a deal to freeze production in Doha, Qatar, on Sunday. But oil started to rebound in U.S. trading after news of a strike in Kuwait that took more than half of the country's production offline on Sunday. By day's end, oil prices finished down 58 cents, or 1.4%, at $39.78 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 19 cents, or 0.4%, to $42.91 on ICE Futures Europe after briefly crossing into positive territory. Hope that producers would freeze output--and that a deal could eventually lead to more meaningful production cuts--was the main driver for U.S. oil prices surging as much as 60% from 13-year lows in February. Now that the biggest catalyst is gone, traders say other factors are likely to be slow-moving, making it harder for oil to rally in the short term. "It's not going to be one big event" that moves oil prices from current levels, said Nick Koutsoftas, a portfolio manager at Cohen & Steers Inc., who helps oversee $558 million in commodity investments. Mr. Koutsoftas expects U.S. oil to trade between $30 and $40 a barrel through year-end. Many investors expect prices to fall further in the near term. Global inventories of crude oil and refined products stand near record, with U.S. crude inventories at the highest in more than 80 years. Money managers, including hedge funds, held an unusually large number of bets as of April 12 that U.S. and Brent crude prices would rise, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. Without an immediate bullish driver, traders could start to close out those wagers, sending prices lower. The recent price rally also could spur U.S. producers to increase output. Many companies need to produce as much oil as possible to meet debt payments. With most futures contracts for 2017 and 2018 trading above $45 a barrel, some companies could lock in prices that let them put more drilling rigs to work, analysts say. Serengeti Asset Management has taken positions that would benefit from lower oil prices, said Leslie Biddle, a partner at the $1.5 billion hedge fund. "By the middle of the summer, we could see some American production coming online," she said. Others are more bullish, predicting that supply and demand will start to come into balance. U.S. crude output fell from a 44-year peak of 9.7 million barrels a day in April 2015 to 9 million barrels a day in March, according to the Energy Information Administration. The agency forecasts output will drop below 8.5 million barrels a day in August. Market Talk Doha Oil Talks All About Politics--The oil discussions in Doha to potentially introduce a freeze on production were all about politics and nothing else, says SEB Markets, in a note. Saudi Arabia will have known all along that Iran would refuse to freeze production at the suggested levels, which means Saudi effectively "placed the ball in the court of Iran." This meant that if the deal fell apart, the blame would be centered on Iran, potentially harming the county's relationships with its close allies Russia and Venezuela. (miriam.malek@wsj.com, @WSJenergy) Doha Will Have Limited Impact On Oil In Long Term--The immediate impact on oil prices after the Doha meeting between major oil producers failed to result in a consensus to freeze production will reverberate negatively around the markets over the next few days, but the long-term prognosis is better, says UBS. In a note, the bank's analysts state that there is actually very limited scope for any producer to actually expand output at the moment. Iran and Libya certainly have the capacity to increase production, but any major incremental rise in output is unlikely in Libya and will take much longer than initially anticipated in Iran. (kevin.baxter@wsj.com) At the same time, demand is expected to increase as summertime weather spurs drivers to hit the road. The EIA expects U.S. gasoline demand to average 9.3 million barrels a day this year, up from 9.2 million barrels a day in 2015. "I don't think you need a big bang to save the market," said Greg Sharenow, a portfolio manager at Pacific Investment Management Co., which manages $1.5 trillion. "You just need time to pass and output to decay." If there is widespread consensus, it is that the producers' inability to reach an agreement Sunday doesn't bode well for future cooperation. "We expected they'd at least be able to organize a photo opportunity and say some nice things about the market," Citigroup analyst Tim Evans said. "The bar was set as low as it could possibly have been set, and they still tripped over it." Many countries already are producing at full capacity, but the Organization of the Petroleum Exporting Countries has about 3.1 million barrels a day of so-called spare capacity, or additional production that could be reached within 90 days, according to the International Energy Agency. Saudi Arabia accounts for about two-thirds of the spare capacity. In a worst-case scenario for prices, producing nations could increase their output further, analysts said. OPEC countries added about a million barrels a day to their annual production in 2015 as Saudi Arabia, Iraq and other nations competed for buyers. "If this is going to be the starting shot of another price war, we have fireworks ahead," said Jan Stuart, global energy economist at Credit Suisse Group AG. "It all depends on what the Saudis do next." Timothy Puko, Christian Berthelsen and Ryan Dezember contributed to this article. Related Coverage * Why Oil Prices Aren't Dropping More * 5 Questions for Oil Markets After Doha * Saudi, Iranian Rivalry Imperils Doha Oil Deal * As Oil Producers Meet, Skepticism Persists Over Prospects of Freeze * Iran Won't Attend Doha Oil Meeting * Oil Prices Slide in Volatile Trade * U.S. Energy Producers Remain Leery * At a Glance: The Oil World Descends on Doha * Barrel Breakdown: The Cost of Producing a Barrel * Russia Opens Up New Oil Front: India Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Supply & demand; Inventory; Crude oil prices
Location: Iran United States--US
Company / organization: Name: Intercontinental Exchange Inc; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Commodity Futures Trading Commission; NAICS: 926140, 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781481973
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781481973?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Gold Ends Higher; Prices rise on uncertainty over oil prices and a weaker U.S. dollar
Author: Yang, Stephanie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
Gold for June delivery gave back most of its gains from the morning, ending the day up 40 cents at $1,235 a troy ounce on the Comex division of the New York Mercantile Exchange.
Full text: Gold prices inched higher on Monday, bolstered by uncertainty over oil prices and a weaker dollar. Gold for June delivery gave back most of its gains from the morning, ending the day up 40 cents at $1,235 a troy ounce on the Comex division of the New York Mercantile Exchange. Gold traded as high as $1,243.30 earlier in the session. Some analysts noted that a more bearish outlook on oil has supported gold prices, as investors look to haven assets amid falling crude prices. A Sunday meeting between major oil producers in Doha failed to produce an agreement on limiting production. U.S. oil futures were recently down 1.6% at $39.74 a barrel. "You had a little bit of safe-haven buying ... after the meeting kind of fell apart," said Frank McGhee, head precious-metals dealer at Alliance Financial. "That seems to have worked its way through." Weakness in the greenback also helped to boost gold, as the dollar-denominated metal becomes cheaper for foreign buyers. The WSJ Dollar Index, which measures the buck against 16 other currencies, was recently down 0.2% at 86.04. Write to Stephanie Yang at stephanie.yang@wsj.com Credit: By Stephanie Yang
Subject: Gold markets
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781511260
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781511260?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Oil's Anti-Freeze: The Saving Grace of a Stalemate; The worst may be over but there is no quick fix
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
[...]the question mark over 1.6 million barrels a day of production, about the size of the first-quarter market surplus, is a reminder that the strain low prices put on exporters operationally and socially could spell further disruptions.
Full text: In a market blowing hot and cold, it's appropriate that a freeze turned out to be just a lot of hot air. The world's biggest crude exporters failed Sunday to reach an agreement on freezing oil output at January's levels. With nations like Saudi Arabia and Russia producing at record levels, an accord would have been symbolic at best . Instead, Saudi Arabia insisted that it wouldn't restrain production without the cooperation of Iran. And it has zero interest in playing along . That left the Organization of the Petroleum Exporting Countries and associated hangers-on looking fractious and dysfunctional, dashing hopes of coordinated action to support oil prices. Benchmark crude prices duly dropped in early trading before recovering some losses. The irony is that the anti-freeze leaves the oil market looking in arguably better shape, for those prepared to wait. No doubt, the near-term picture is a mess. The oil market can look forward to rising output from Iran, the return of temporarily disrupted production in places such as Iraq and Nigeria, as well as a potential boost to supply from wild cards like Libya. Yet the unpredictability of exporters' output is also working in oil bulls' favor. A workers' strike in Kuwait has cut output by 60%, according to officials, with refinery utilization also down. With exports unaffected and orders met from stocks, this is only likely to have a lasting impact if the strike lasts more than a week, argues Barclays. But the question mark over 1.6 million barrels a day of production, about the size of the first-quarter market surplus, is a reminder that the strain low prices put on exporters operationally and socially could spell further disruptions. Meanwhile, the global market is slowly creaking into alignment. Slightly stronger-than-expected demand, and the odd bright spot like India , must be set against a go-slow global economy. But non-OPEC supply is falling: the International Energy Agency now expects 57 million barrels a day of production in 2016, compared with its forecast of 57.8 million six months ago. Exporter discord keeps up the pressure on struggling U.S. shale operators and cash-strapped oil and gas majors, who are chopping investment. It delays the question of how onshore U.S. producers will behave as oil prices rise and potentially exacerbates labor and equipment shortages when they do. The demise of a freeze with little fundamental impact hits sentiment but leaves a market undergoing slow, self-repair effectively unchanged. It reinforces one, key message: The worst may be over but there is no quick fix. Write to Helen Thomas at helen.thomas@wsj.com Credit: By Helen Thomas
Subject: Petroleum industry; Supply & demand; Exports
Location: Russia Iran Saudi Arabia
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781520989
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781520989?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Government Bonds Pull Back After Earlier Gains; Treasurys had gained earlier Monday after oil producers fail to reach a production-freeze deal
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
"There wasn't a lot of panic," said Anthony Cronin, a Treasury bond trader at Societe Generale SA. Traders said new corporate debt sales also weighed down on U.S. government bond prices, highlighting the latter security's important role in global finance.
Full text: U.S. government bonds pulled back Monday, reversing their earlier price gains driven by a selloff in crude oil . The haven-bond market initially strengthened during earlier global trade after major oil-producing nations failed to reach an agreement on a production freeze. But in the U.S. session, investors booked profits from the haven flows as crude oil pared its big price decline. Other markets also showed subdued reactions. European and U.S. stocks were modestly lower . "There wasn't a lot of panic,'' said Anthony Cronin, a Treasury bond trader at Société Générale SA. In recent trading, the yield on the benchmark 10-year Treasury note was 1.771%, according to Tradeweb, compared with 1.753% on Friday. Yields rise as bond prices fall. The yield had fallen to 1.722% earlier in the session, trading near an all-time closing low set in 2012. Traders said new corporate debt sales also weighed down on U.S. government bond prices, highlighting the latter security's important role in global finance. Stubbornly low Treasury yields are encouraging firms to sell new debt to lock in favorable borrowing costs. Corporate bonds offer higher yields than U.S. Treasury debt, enticing buyers who see low Treasury yields as unappealing. Some developing countries also benefited from the low yield environment. One highlight this week: Argentina is coming back to sell debt for the first time after being shut out of the international debt market for 15 years. Traders say the sale may attract buying interest as many investors struggle to get income. Market response to oil had been more dramatic a few months ago when worries over a global economic downturn and deflationary risks reigned supreme. But sentiment has been improving since mid-February, with riskier markets from stocks, oil and junk bonds rising from their 2016 lows. Despite Monday's decline, crude oil prices remain significantly higher from its Feb low. One support for market sentiment over the past few weeks: the Federal Reserve has signaled that it will be cautious and very slow in raising interest rates. Analysts say policy makers don't want to see a repeat of the market turmoil earlier this year following the Fed's rate increase in December--the first tightening move since 2006. The European Central Bank and the Bank of Japan have been continuing to provide monetary stimulus aiming to support economic growth and combat very low inflation. The ECB's next policy meeting is due this Thursday, followed by meetings from the Fed and the BOJ next week. In the short term, highly accommodative policies from major central banks are likely to continue to bolster sentiment, but investors may need to gird for a bumpier ride in June, analysts say. The Fed is expected to stand pat in its monetary policy meeting next week, but the door remains open for the Fed to raise rates in June if financial markets continue to stabilize and the U.S. economy remains resilient. Write to Min Zeng at min.zeng@wsj.com Credit: By Min Zeng
Subject: Interest rates; Corporate debt; Crude oil prices; Government bonds; Crude oil
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781547107
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Commodity Currencies Rise; Failure by oil producers to reach production deal had triggered selloffs in currencies of commodity exporters
Author: Du laney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
Commodity-linked currencies also benefited from optimism that oil producers could strike a deal if crude prices push sharply lower again, said Athanasios Vamvakidis, Bank of America Merrill Lynch's head of European G-10 currency strategy .
Full text: The currencies of several commodity-exporting nations rose Monday even though oil producers failed to reach an agreement on curbing output over the weekend. The dollar was recently down 0.2% against the Canadian dollar at C$1.28 after being up as much as 1.3% earlier in the day. The Australian dollar rose 0.3% to $0.7745. On Sunday, oil producers that supply almost half the world's crude met to negotiate a production freeze intended to strengthen prices. Oil prices had rallied in recent weeks on speculation that a deal might be struck among large producing nations including Saudi Arabia and Russia. But talks fell apart after Saudi Arabia surprised the group by reasserting a demand that Iran also agree to cap its oil production. U.S. crude oil prices fell 1.1% to $39.93 a barrel but pared earlier losses amid concerns about an oil workers' strike in Kuwait . Commodity-linked currencies also benefited from optimism that oil producers could strike a deal if crude prices push sharply lower again, said Athanasios Vamvakidis, Bank of America Merrill Lynch's head of European G-10 currency strategy . "The fact that they can came close to a deal does signal that they can work together," he said. Meanwhile, the dollar rose 2.1% against the Brazilian real to 3.6058 reais. The real had risen sharply earlier in the day after Sunday's vote by the Brazilian lower house to impeach President Dilma Rousseff . In response to the currency's rise, the central bank auctioned off reverse foreign-exchange swaps--instruments that weaken the real, according to Brown Brothers Harriman currency strategist Win Thin. Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com Credit: By Chelsey Dulaney
Subject: Crude oil prices; Petroleum industry; Currency; Petroleum production
Location: Iran Russia United States--US Kuwait Saudi Arabia
People: Rousseff, Dilma
Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781547121
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781547121?acc ountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Mexican Officials Seek to Reassure Investors About Pemex; Finance minister, Pemex CEO to underline government's support for state oil company
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexican officials are setting out to assure investors of government support for state oil company Petróleos Mexicanos after the firm received a $4.2 billion financial lifeline to help it through a cash-flow squeeze brought on by falling oil prices. Finance Minister Luis Videgaray and Pemex Chief Executive José Antonio González Anaya were scheduled to meet with investors in New York on Monday to ratify the government's support for the company and underscore its importance to the Mexican economy, the Finance Ministry said. The government said last week it will give Pemex $1.5 billion in capital from federal budget savings, and about $2.7 billion in money related to an overhaul of the state firm's pension liabilities. Pemex will use the funds to pay suppliers and contractors owed money from 2015. "What this package does is allow us to address our most immediate debts. We have to continue working on adjusting our cost structure...we have to lower our costs," Mr. González Anaya said at the time. The government also increased the amount of investment that Pemex can deduct from its shallow-water and onshore projects, saving the company an estimated $2.9 billion in taxes this year--money Pemex says it will no longer have to borrow. "Despite the relatively small commitment for a company with about $85 billion in total debt, the announcement helps validate our assumption of very high implicit government support for the national oil company," Moody's Investors Service said in a report last week. But it doesn't change the negative outlook, given falling production, low prices and investment constraints, the ratings firm added. Moody's, which cut Pemex's credit rating last month by two notches to its lowest investment grade, estimated that the measures will reduce Pemex's financing needs this year to less than $13 billion from $17 billion. Pemex sold $5 billion in bonds in January and [euro]2.25 billion ($2.54 billion) in March, The government was able to support Pemex without compromising its fiscal deficit targets after it received $13.6 billion in surplus funds from the central bank. It will use 70% to lower federal government debt, and put the rest in a budget stabilization fund. Moody's kept Mexico's sovereign rating at A3, four notches into investment grade, but changed the outlook to negative. Carlos Legaspy, president of Illinois-based Insight Securities Inc., which includes Pemex debt in its client portfolios, said he prefers Pemex bonds to Mexican sovereigns given that they pay higher yields while enjoying implicit government backing. "The capital injection commitment confirms the inseparability of Pemex" and Mexican sovereign debt, he said. Pemex still faces the huge task of reversing output declines while slimming down operations amid low oil prices. The company's problems are as much technical as financial, said John Padilla, managing director of energy consultancy IPD Latin America. "This is a Band-Aid solution, or kicking the can down the road. It doesn't resolve the structural underlying problems plaguing Pemex." Pemex sees its crude oil production falling by 100,000 barrels a day this year to 2.12 million barrels a day as a result of budget cuts, and projects a further decline to around 2 million barrels a day in 2017. The price of Mexican crude oil fell by half last year, contributing to the company's $30 billion after-tax loss, and has fallen further in early 2016. Pemex's crude mix priced at $32.24 per barrel on Friday. The government's willingness to ease Pemex's onerous tax burden is a significant change, said Pablo Medina, a Latin America upstream analyst at Wood Mackenzie. "I would describe this as the first step in a long journey of ensuring that Pemex is a sustainable company over the longer term," he said. Under new energy laws that opened refining, exploration and production to private and foreign competition for the first time in nearly eight decades, Pemex is able for the first time to take on partners in those and other areas. "The farmouts or joint-ventures are the most important way in which Mexico can increase production in the short-to-medium term," Mr. Medina said. "With new partners they can bring more capital, they can bring more expertise, and basically that is how you get faster results." Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781573612
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781573612?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Stocks and Oil Prices: Correlation Breakdown; Oil and stocks aren't trading in tandem as they did earlier this year; that is a good thing
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
Each decline in crude was seen as intensifying the stresses facing commodity producing economies, and further sparked fears over oil companies' ability to pay off debts.
Full text: Remember when what was bad for oil was bad for stocks, and vice versa? That isn't true anymore. For investors, this indicates the adverse feedback loops that were rattling markets earlier this year have, for the moment, been broken. A good thing--though it may also make the Federal Reserve more comfortable about raising rates. Not so long ago, the easiest way to figure out where U.S. stocks were headed was to look at oil. There were only two days in the 20-day trading period that ended Feb. 12 that the front-month Nymex crude oil contract and the S&P 500 went in opposite directions. The correlation between daily oil and stock price changes during that period was an atypically high 0.74, with 1 representing perfect correlation and zero no relation whatsoever. That correlation was driven by oil's part in a tangle of feedback loops that was upsetting markets. Each decline in crude was seen as intensifying the stresses facing commodity producing economies, and further sparked fears over oil companies' ability to pay off debts. The interaction of those things with the dollar, and worries over emerging economies and capital flight, made for a scary moment. It was the major reason the Fed dialed back its rate-increase expectations . Lately, there have been more days like Monday, when oil prices slipped after key producers failed to reach a deal on output over the weekend. Yet U.S. stocks pushed higher. Indeed, oil and stock prices have moved in the same direction on just 11 of the past 20 trading days. And the correlation between daily moves in the crude contract and the S&P has fallen to 0.28. The Fed, wary of what happened earlier this year, is in no rush to tighten; the chances of a rate increase at its meeting next week are next to nil. But with the fading of the extreme correlations between oil, stocks and other market instruments, it has one less reason not to go in June. Write to Justin Lahart at justin.lahart@wsj.com Credit: By Justin Lahart
Subject: Stocks; Price increases; Petroleum industry
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781591245
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781591245?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudis Mix Politics and Oil Policy; The kingdom's decision not to freeze production and to blame Iran underscores the regional rivalry
Author: Spindle, Bill; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract:
Mr. Naimi, who isn't a member of the royal family and started working in Saudi Arabia's national oil company as a teenager, is an octogenarian and speculation has swirled for years that he could soon retire. Since King Salman came to power last year, he has shuffled the kingdom's economic, financial and oil management and placed all of it under the direct control of the deputy crown prince, his 30-year-old son.
Full text: Saudi Arabia's decision over the weekend to refuse to freeze oil output without Iran's participation indicates a heightened willingness in the kingdom to mix politics and oil policy amid tensions with Tehran and Washington. Deputy Crown Prince Mohammed bin Salman's intervention into the talks among oil-producing countries in Doha was seen by analysts as a surprisingly open display of influence over oil policy that risked being seen as political jab at Iran. Iran refused to participate in the talks and the deputy crown prince reaffirmed during the meeting that the kingdom wouldn't do a deal without Iran, communicating that both via the media and directly to a Saudi delegation headed by the country's long-serving oil minister, Ali al-Naimi. That was a move away from what had seemed to be a growing willingness on the part of the Saudis work with Russia and many members of the Organization of the Petroleum Exporting Countries. It comes just days before President Barack Obama's meeting Wednesday with King Salman bin Abdul Aziz in Riyadh. Riyadh is seeking new assurances that the U.S. hasn't ditched loyal Gulf allies in favor of Iran. Mr. Obama has made the case that Saudi Arabia and Iran should reduce longtime tensions between their two countries to help tamp down instability in the Middle East. But the kingdom's decision instead to go it alone on oil-production policy highlighted its increasingly fierce rivalry with Iran. "The signs of tensions within the kingdom and the willingness to politicize oil production, the mixed signals and flip-flopping really have an impact," said Antoine Halff, an oil economist and fellow at Columbia University's Center on Global Energy Policy. Saudi Arabia offered no explanation for the sudden hardening of its position in Doha. White House press secretary Josh Earnest on Monday declined to comment on Saudi Arabia's decision during what he described as "efforts by oil producers to coordinate their activities to maximize the economic standing of their individual countries." "We're certainly conscious of the fact that it has an impact on the U.S. economy," Mr. Earnest said, adding that the White House prefers the current dynamic of low oil prices over the impact of high oil prices. By agreeing to attend the meeting, Saudi Arabia seemed to be bending to pleas from desperate fellow OPEC members, signaling it might agree to some collective output freeze even without Iran. Related * Oil Slips After Output Deal Fails * Russia Says Saudi, Other Gulf Countries Added Last-Minute Demands * Obama to Face Uneasy Allies at Gulf Summit * EU Energy Chief Sees Significant Role for Iranian LNG in Europe * Heard on the Street: Oil's Anti-Freeze: The Saving Grace of a Stalemate Officials who attended the meeting said they had received assurances a deal was possible even without Iran participating in the meeting or the freeze. "We flew here with almost certainty of reaching an agreement," said Russian energy minister Alexander Novak. Still, he said, "Russia will not suffer from this." Another official who was involved in preparations for the gathering said that Mr. Naimi had said before coming to Doha that Iran didn't necessarily have to be a part of the deal. And Saudi officials reviewed early drafts of such an agreement in Doha the night before the meeting. For years, Mr. Naimi's level of autonomy helped make him one of the most powerful figures in global crude markets. Mr. Naimi, who isn't a member of the royal family and started working in Saudi Arabia's national oil company as a teenager, is an octogenarian and speculation has swirled for years that he could soon retire. Since King Salman came to power last year, he has shuffled the kingdom's economic, financial and oil management and placed all of it under the direct control of the deputy crown prince, his 30-year-old son. Prince Mohammed has exerted more direct control over all areas of policy, and spoken out publicly recently about privatizing Saudi Aramco, the national oil company. He is also in charge of the military, and oversees an intervention in Yemen against a rebel group that is allied with Iran. The oil markets, a lifeline for the economies of both Iran and Saudi Arabia, have become one stage where their struggle is playing out. The failure to reach a deal in Doha sent oil prices down as much as 6% in early trading Monday before recovering. U.S. oil prices closed at $39.78 on Monday, down 1.4%. after rallying on news of a Kuwaiti oil-worker strike that shut off some output there On Monday, a top Iranian oil official said it would be an "illusion" to ask Iran to stop boosting its production. In an interview with Iran's oil ministry agency Shana, Iran's OPEC envoy Hossein Kazempour said countries that tried to derail Iran's nuclear talks "this time around sought to stop Iran from regaining its share in the global oil market by pressuring it to freeze its production." As Iran ramps up production now, aiming to eventually return to its former production level of four million barrels a day, it is competing for some of the same buyers as Saudi Arabia. Saudi Arabia produces more than 10 million barrels of crude oil a day, roughly three times as much as Iran, which until recently has also had its exports restricted by international sanctions. In recent months, Iran and Saudi Arabia have been engaged in a fierce price war for customers in Europe and Asian, matching each others' discounts. A freeze that left out Iran would likely result in Saudi Arabia losing market share to the Islamic Republic. And Saudi Arabia has said for almost two years that it wouldn't cede market share by cutting or restraining production alone, even if that meant lower prices and potentially less revenue. Mr. Naimi made that point repeatedly, including at OPEC meetings and industry conferences. Iran's ramp-up is expected to constitute almost all of the production growth in world markets this year, with the only other country obviously capable of raising production being Saudi Arabia. On Saturday in Tehran, Iranian Foreign Minister Javad Zarif said he saw no sign of a thaw in relations with Riyadh. The oil glut resulting from an all-out production race pushed prices down by as much as 75%, and has devastated OPEC members such as Venezuela and hurt the group as a whole. Declining revenues are even causing stress in Saudi Arabia, which ran through more than 10% of its financial reserves last year alone. For oil producers around the world, the collapse of what appeared to be an opportunity to curtail production means more pain. But it also means less oil over time as low prices make cutbacks in drilling and investment even more urgent, say analysts. Output is already turning down in the North Sea, Latin America and the U.S. Bob Sullivan, head of the oil and gas practice for energy consultancy AlixPartners, said that North American exploration and production companies are already facing a collective cash-flow shortage of $102 billion, and the shortage will grow if prices don't recover. "People were holding out hope that this would create momentum," he said. "Now they realize this isn't going to get fixed anytime soon." Benoit Faucon, James Marson and Carol E. Lee contributed to this article. Write to Bill Spindle at bill.spindle@wsj.com and Summer Said at summer.said@wsj.com Credit: By Bill Spindle and Summer Said
Subject: Royalty; Petroleum industry; Petroleum production
Location: Iran Russia United States--US Riyadh Saudi Arabia Saudi Arabia
People: Obama, Barack Earnest, Josh Naimi, Ali I Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Columbia University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781643859
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781643859?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Correlation Between Oil Prices, Stocks Weakens; Diminishing link seen as sign of growing confidence in global economy
Author: Zeng, Min; Eisen, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Apr 2016: n/a.
Abstract: None available.
Full text: The once-strong link between crude-oil prices and U.S. stocks has weakened, the latest sign of the markets' steadier footing this spring. The Dow industrials rose 107 points Monday to close above 18000 for the first time since July, on a day when Nymex crude futures tumbled 1.4% to $39.78. The Dow and oil have moved in the same direction on half of the 12 trading days so far this month, down from 68% in January and 75% in February. Just two months ago, falling crude prices would likely have meant a decline in U.S. stocks by intensifying concerns about the health of energy firms and the global economy. Oil has long been tracked by traders in other markets as a vital signal for demand for goods and services. But since the Feb. 11 market low , analysts and traders have generally grown more sanguine about the global economy, reasoning that its tepid growth doesn't necessarily presage a recession or market shock. For now, any given decline in oil prices doesn't have the same power to rattle sentiment. "Oil has been less of a powerful force,'' said Jason Evans, co-founder of hedge fund NineAlpha Capital LP in New York. He said many investors are still coming to terms with lower oil prices. Related * Dow Clambers Back Above 18000 * Streetwise: Reality of Stocks and Bonds: They're Expensive * Oil Loses Catalyst to Rally Further * Heard on the Street: Stocks and Oil Prices: Correlation Breakdown Recent correlations, a measure of two independent markets' tendency to move up or down together, have weakened substantially between oil and stocks, though they remain well above their historical average. The correlation between the S&P 500 and oil futures has fallen to 0.35 this month through Friday, well below the level of 0.94 for all of 2016 so far, according to WSJ Market Data Group. A correlation of 1 means oil and stock prices move by the same proportion in the same direction, while a correlation of minus 1 would mean they move proportionally in opposite directions. The strongly positive correlation between oil and stocks puzzled many analysts and economists during the early-2016 market rout and for part of the recent bounceback rally, in which oil and stocks largely rose together. Lower oil prices are good news for large energy users such as the U.S., fattening consumers' wallets, so stocks tracking oil--or vice versa--struck many observers as paradoxical. But the bounce in riskier assets since mid-February, together with signs of stabilizing overseas economies and Federal Reserve plans to raise interest rates only slowly, has boosted market sentiment and broken the fear trade that drove correlations higher, said money managers. Worries over a sharp slowdown in China helped drive broad selling in January. But exports from China expanded in March for the first time in nine months and capital flight has been easing. "China's growth is stabilizing and so any fall in the oil price looks less sinister than before,'' said Luca Paolini, chief strategist at Pictet Asset Management, which had $150 billion assets under management at the end of December. "The risk is that investors become too complacent." In the mid-March policy meeting, the Fed lowered its projection of the number of interest rate increases this year to two from four times projected in their December meeting. Fed Chairwoman Janet Yellen said March 29 that she would be cautious in raising rates due to an uncertain global outlook. Investors took it as a sign that the Fed would be patient in tightening policy despite a robust domestic labor market and some uptick in inflation. "Yellen being patient and cautious has been significant'' in calming investors' nerves, said Douglas Coté, chief market strategist at Voya Investment Management, which had $205 billion under management at the end of March. The correlation between U.S. oil and the yield on the benchmark 10-year Treasury note also fell to 0.32 Monday--on a 30-day rolling basis--from 0.87 a month ago, according to Penn Mutual Asset Management. Betting on a tight correlation between markets has been a hot wager among hedge funds, including those that apply computer algorithm trading programs. But "guys got tired of being whipped around by oil,'' said Scott Buchta, head of fixed-income strategy at Brean Capital LLC. "So they weaned themselves from that trade." Write to Min Zeng at min.zeng@wsj.com and Ben Eisen at ben.eisen@wsj.com Credit: By Min Zeng and Ben Eisen
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 178164386 8
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781643868?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Slips After Output Deal Fails; Now that the biggest catalyst is gone, traders say it will be harder for crude to rally in the short term
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
Money managers, including hedge funds, held an unusually large number of bets as of April 12 that U.S. and Brent crude prices would rise, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. Without an immediate bullish driver, traders could start to close out those wagers, sending prices lower.
Full text: Oil prices careened wildly on Monday after the collapse of talks aimed at capping production left investors at odds over what factors will dominate trading in the weeks ahead. Prices fell more than 6% in overnight trading, slumping as news emerged that leaders of big oil-producing nations failed to reach a deal to freeze production in Doha, Qatar, on Sunday. But oil started to rebound in U.S. trading after news of a strike in Kuwait that took more than half of the country's production offline on Sunday. By day's end, oil prices finished down 58 cents, or 1.4%, at $39.78 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 19 cents, or 0.4%, to $42.91 on ICE Futures Europe after briefly crossing into positive territory. Hope that producers would freeze output--and that a deal could eventually lead to more meaningful production cuts--was the main driver for U.S. oil prices surging as much as 60% from 13-year lows in February. Now that the biggest catalyst is gone, traders say other factors are likely to be slow-moving, making it harder for oil to rally in the short term. "It's not going to be one big event" that moves oil prices from current levels, said Nick Koutsoftas, a portfolio manager at Cohen & Steers Inc., who helps oversee $558 million in commodity investments. Mr. Koutsoftas expects U.S. oil to trade between $30 and $40 a barrel through year-end. Many investors expect prices to fall further in the near term. Global inventories of crude oil and refined products stand near record, with U.S. crude inventories at the highest in more than 80 years. Money managers, including hedge funds, held an unusually large number of bets as of April 12 that U.S. and Brent crude prices would rise, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. Without an immediate bullish driver, traders could start to close out those wagers, sending prices lower. The recent price rally also could spur U.S. producers to increase output. Many companies need to produce as much oil as possible to meet debt payments. With most futures contracts for 2017 and 2018 trading above $45 a barrel, some companies could lock in prices that let them put more drilling rigs to work, analysts say. Serengeti Asset Management has taken positions that would benefit from lower oil prices, said Leslie Biddle, a partner at the $1.5 billion hedge fund. "By the middle of the summer, we could see some American production coming online," she said. Others are more bullish, predicting that supply and demand will start to come into balance. U.S. crude output fell from a 44-year peak of 9.7 million barrels a day in April 2015 to 9 million barrels a day in March, according to the Energy Information Administration. The agency forecasts output will drop below 8.5 million barrels a day in August. Market Talk Doha Oil Talks All About Politics--The oil discussions in Doha to potentially introduce a freeze on production were all about politics and nothing else, says SEB Markets, in a note. Saudi Arabia will have known all along that Iran would refuse to freeze production at the suggested levels, which means Saudi effectively "placed the ball in the court of Iran." This meant that if the deal fell apart, the blame would be centered on Iran, potentially harming the county's relationships with its close allies Russia and Venezuela. (miriam.malek@wsj.com, @WSJenergy) Doha Will Have Limited Impact On Oil In Long Term--The immediate impact on oil prices after the Doha meeting between major oil producers failed to result in a consensus to freeze production will reverberate negatively around the markets over the next few days, but the long-term prognosis is better, says UBS. In a note, the bank's analysts state that there is actually very limited scope for any producer to actually expand output at the moment. Iran and Libya certainly have the capacity to increase production, but any major incremental rise in output is unlikely in Libya and will take much longer than initially anticipated in Iran. (kevin.baxter@wsj.com) At the same time, demand is expected to increase as summertime weather spurs drivers to hit the road. The EIA expects U.S. gasoline demand to average 9.3 million barrels a day this year, up from 9.2 million barrels a day in 2015. "I don't think you need a big bang to save the market," said Greg Sharenow, a portfolio manager at Pacific Investment Management Co., which manages $1.5 trillion. "You just need time to pass and output to decay." If there is widespread consensus, it is that the producers' inability to reach an agreement Sunday doesn't bode well for future cooperation. "We expected they'd at least be able to organize a photo opportunity and say some nice things about the market," Citigroup analyst Tim Evans said. "The bar was set as low as it could possibly have been set, and they still tripped over it." Many countries already are producing at full capacity, but the Organization of the Petroleum Exporting Countries has about 3.1 million barrels a day of so-called spare capacity, or additional production that could be reached within 90 days, according to the International Energy Agency. Saudi Arabia accounts for about two-thirds of the spare capacity. Related * Dow Clambers Back Above 18000 * Shares, Oil Break Lock-Step Dance * Streetwise: Reality of Stocks and Bonds: They're Expensive * Heard on the Street: Stocks and Oil Prices: Correlation Breakdown * Why Oil Prices Aren't Dropping More * Barrel Breakdown: The Cost of Producing a Barrel In a worst-case scenario for prices, producing nations could increase their output further, analysts said. OPEC countries added about a million barrels a day to their annual production in 2015 as Saudi Arabia, Iraq and other nations competed for buyers. "If this is going to be the starting shot of another price war, we have fireworks ahead," said Jan Stuart, global energy economist at Credit Suisse Group AG. "It all depends on what the Saudis do next." Timothy Puko, Christian Berthelsen and Ryan Dezember contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Supply & demand; Inventory; Crude oil prices
Location: Iran United States--US
Company / organization: Name: Intercontinental Exchange Inc; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Commodity Futures Trading Commission; NAICS: 926140, 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781659144
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781659144?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil's Anti-Freeze: The Saving Grace of a Stalemate; The worst may be over, but there is no quick fix
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
[...]the question mark over 1.6 million barrels a day of production, about the size of the first-quarter market surplus, is a reminder that the strain low prices put on exporters operationally and socially could spell further disruptions.
Full text: In a market blowing hot and cold, it's appropriate that a freeze turned out to be just a lot of hot air. The world's biggest crude exporters failed Sunday to reach an agreement on freezing oil output at January's levels. With nations like Saudi Arabia and Russia producing at record levels, an accord would have been symbolic at best . Instead, Saudi Arabia insisted that it wouldn't restrain production without the cooperation of Iran. And it has zero interest in playing along . That left the Organization of the Petroleum Exporting Countries and associated hangers-on looking fractious and dysfunctional, dashing hopes of coordinated action to support oil prices. Benchmark crude prices duly dropped in early trading before recovering some losses. The irony is that the anti-freeze leaves the oil market looking in arguably better shape, for those prepared to wait. No doubt, the near-term picture is a mess. The oil market can look forward to rising output from Iran, the return of temporarily disrupted production in places such as Iraq and Nigeria, as well as a potential boost to supply from wild cards like Libya. Yet the unpredictability of exporters' output is also working in oil bulls' favor. A workers' strike in Kuwait has cut output by 60%, according to officials, with refinery utilization also down. With exports unaffected and orders met from stocks, this is only likely to have a lasting impact if the strike lasts more than a week, argues Barclays. But the question mark over 1.6 million barrels a day of production, about the size of the first-quarter market surplus, is a reminder that the strain low prices put on exporters operationally and socially could spell further disruptions. Meanwhile, the global market is slowly creaking into alignment. Slightly stronger-than-expected demand, and the odd bright spot like India , must be set against a go-slow global economy. But non-OPEC supply is falling: the International Energy Agency now expects 57 million barrels a day of production in 2016, compared with its forecast of 57.8 million six months ago. Exporter discord keeps up the pressure on struggling U.S. shale operators and cash-strapped oil and gas majors, who are chopping investment. It delays the question of how onshore U.S. producers will behave as oil prices rise and potentially exacerbates labor and equipment shortages when they do. The demise of a freeze with little fundamental impact hits sentiment but leaves a market undergoing slow, self-repair effectively unchanged. It reinforces one, key message: The worst may be over but there is no quick fix. Write to Helen Thomas at helen.thomas@wsj.com Credit: By Helen Thomas
Subject: Petroleum industry; Supply & demand; Exports
Location: Russia Iran Saudi Arabia
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781659237
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781659237?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Edge Slightly Lower; U.S. Data in Focus; June Brent crude on London's ICE Futures exchange fell $0.25 to $42.66 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
Crude oil prices saw minor losses in early Asia trade Tuesday, but the strike by oil workers in Kuwait and outages in other parts of the world have renewed hope of a smaller global glut.
Full text: Crude oil prices saw minor losses in early Asia trade Tuesday, but the strike by oil workers in Kuwait and outages in other parts of the world have renewed hope of a smaller global glut. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $39.62 a barrel at 0250 GMT, down $0.16 in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell $0.25 to $42.66 a barrel. The nationwide strike in Kuwait paralyzed around 60% of the country's production on Sunday. Other than chronic outages in Yemen, South Sudan and Iraq, major pipeline outages in Nigeria and oil strikes in Kuwait, have substantially curtailed production in recent weeks, said BMI Research. The strike could potentially result in output falling to 1 million barrels a day, the research firm said. Kuwait produced 2.7 million barrels a day in March, based on data provided by the Organization of the Petroleum Exporting Countries. Prices fell almost 7% on Monday after a deal that would have limited future crude production between major Organization of the Petroleum Exporting Countries and non-OPEC countries was thwarted at the last minute on Sunday upon Saudi Arabia's blatant refusal to join the pact without Iran's commitment to do the same. "So the stage looks set for ongoing competition for market share between Saudi Arabia and Iran, at least until Iran's output approaches capacity," said Tim Evans, a Citi Futures analyst. The latest mounting discord underscores the mistrust among OPEC members and stokes questions among analysts of the cartel's ability to collaborate in the future. Market watchers say OPEC's biannual June 2 meeting is unlikely to yield a production cap agreement as member countries will act on their own self-interest and continue to pump at high rates to defend market shares. ING's head of commodity strategy Hamza Khan predicts a failure to reach a production cap agreement in the June meeting could push prices back $30 a barrel. For this week, traders will be watching the U.S. crude inventories and production data for cues on global supply. The U.S. has these days become the swing producer in global oil markets, thanks to the shale revolution. However, the persistent low prices have encouraged some producers to turn off their taps. Pricing agency Platts estimates a 1.6-million barrel increase in crude stocks while gasoline stocks fell by 1.5 million barrels in the week ended April 15. The official data will be released on Wednesday. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 14 points to $1.4379 a gallon, while May diesel traded at $1.2363, 4 points higher. ICE gas oil for May changed hands at $368.50 a metric ton, down $1.75 from Monday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Petroleum industry; Gasoline; Crude oil prices
Location: Iran Iraq Asia Nigeria Yemen Kuwait South Sudan Saudi Arabia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economic s
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781668143
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781668143?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Japan's Stock Market Does a Turnabout--Ending Up Ahead; Investors in Tokyo shares take a fresh look at oil prices, the yen and implications of recent earthquakes
Author: Fong, Dominique
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
Related * Stocks and Oil Prices: Correlation Breakdown * China Quietly Halting Creation of New Investment Businesses * Dow Clambers Back Above 18000 * Kuroda Sees Yen Rise Threatening Inflation Goal "Yesterday's falls were a bit too much," said Soichiro Monji, general manager of economic research at Daiwa SB Investments.
Full text: Japan stock traders did a turnabout Tuesday, in a two-day whipsaw that despite the drama left Tokyo's main benchmark pretty much back where it started. Japan's Nikkei Stock Average rose 3.7%--its highest daily percentage gain since Feb. 2. The surge stamped out Monday's loss, when the benchmark tumbled 3.4%. The same three factors--oil, earthquakes and the yen--that were blamed for Monday's big losses were cited as reasons for Tuesday's gains. On Tuesday, the yen eased off Monday's highs. Damage by a series of earthquakes to the supply chain of auto makers and others were viewed as less disruptive. And oil prices that fell Monday during Japan's trading hours rebounded later. Related * Stocks and Oil Prices: Correlation Breakdown * China Quietly Halting Creation of New Investment Businesses * Dow Clambers Back Above 18000 * Kuroda Sees Yen Rise Threatening Inflation Goal "Yesterday's falls were a bit too much," said Soichiro Monji, general manager of economic research at Daiwa SB Investments. The largest gains in Japan came from shares of banks and insurers. But investors' cheer also spread across the larger market. Shares of Toyota Motor Corp., which slid 4.8% Monday after the auto maker halted production at many of its local plants, jumped 3.9%. The Japanese yen weakened slightly to 109.14 to one U.S. dollar during Asian trading hours, as traders pocketed profits. The weakness lifted pressure off Japanese exporters, who benefit when a weaker yen makes their products more competitive overseas. Meanwhile, Japanese officials reiterated their willingness to act if the yen strengthens rapidly again, with Finance Minister Taro Aso saying Tuesday that he "will take various measures if there are what we see as sharp rises or sharp falls in the yen." Elsewhere in Asia, most markets eked out at least small gains. Australia's S&P/ASX 200 rose 1% and Hong Kong's Hang Seng Index gained 1.3%. In Korea, shares ended up 0.1%. The shares crept higher initially after the central bank held the base interest rate steady at 1.5% Tuesday morning, though many economists still expect a rate cut later this year. Stocks pulled back after the central bank also cut its growth forecast to 2.8% from 3% for the year as exports and sluggish domestic demand drag on the economy. In China, the Shanghai Composite Index finished up 0.3% after a day of choppy trading. "Given the lack of additional new fund inflow, the market is expected to continue range-bound trading in the short-term" in China, said Tian Weidong, an analyst at Kaiyuan Securities. In the U.S., oil prices and stocks have shown a willingness to break their lockstep, an alignment that had emerged earlier this year and rattled markets. For example on Monday, oil prices fell after major oil producers failed to reach a deal to freeze output, but the S&P 500 ended up 0.7%. But in Asia, oil and stock markets on Tuesday largely stayed joined at the hip. That link meant Tuesday was "set to see a strong day in Asia," said Angus Nicholson, a market analyst for Australian brokerage firm IG. Brent crude oil was recently trading at about $43.70 per barrel. Kosaku Narioka, Kwanwoo Jun, Takashi Nakamichi and Yifan Xie contributed to this article. Write to Dominique Fong at Dominique.Fong@wsj.com Credit: By Dominique Fong
Subject: Stock exchanges; Yen; Automobile industry; Energy economics; Central banks; Earthquakes
Location: Japan China Asia
People: Aso, Taro
Company / organization: Name: Toyota Motor Corp; NAICS: 336111, 336510, 423110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781668187
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781668187?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
World News: Saudis Wield Oil to Keep Iran in Check --- Refusal to freeze production without Tehran's involvement underscores rivalry
Author: Spindle, Bill; Said, Summer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Apr 2016: A.8.
Abstract:
Mr. Naimi, who isn't a member of the royal family and started working in Saudi Arabia's national oil company as a teenager, is an octogenarian and speculation has swirled for years that he could soon retire. Since King Salman came to power last year, he has shuffled the kingdom's economic, financial and oil management and placed all of it under the direct control of the deputy crown prince, his 30-year-old son.
Full text: Saudi Arabia's decision over the weekend to refuse to freeze oil output without Iran's participation indicates a heightened willingness in the kingdom to mix politics and oil policy amid tensions with Tehran and Washington. Deputy Crown Prince Mohammed bin Salman's intervention into the talks among oil-producing countries in Doha was seen by analysts as a surprisingly open display of influence over oil policy that risked being seen as political jab at Iran. Iran refused to participate in the talks and the deputy crown prince reaffirmed during the meeting that the kingdom wouldn't do a deal without Iran, communicating that both via the media and directly to a Saudi delegation headed by the country's long-serving oil minister, Ali al-Naimi. That was a move away from what had seemed to be a growing willingness on the part of the Saudis work with Russia and many members of the Organization of the Petroleum Exporting Countries. It comes just days before President Barack Obama's meeting Wednesday with King Salman bin Abdul Aziz in Riyadh. Riyadh is seeking new assurances that the U.S. hasn't ditched loyal Gulf allies in favor of Iran. Mr. Obama has made the case that Saudi Arabia and Iran should reduce longtime tensions between their two countries to help tamp down instability in the Middle East. But the kingdom's decision instead to go it alone on oil-production policy highlighted its increasingly fierce rivalry with Iran. "The signs of tensions within the kingdom and the willingness to politicize oil production, the mixed signals and flip-flopping really have an impact," said Antoine Halff, an oil economist and fellow at Columbia University's Center on Global Energy Policy. Saudi Arabia offered no explanation for the sudden hardening of its position in Doha. White House press secretary Josh Earnest on Monday declined to comment on Saudi Arabia's decision during what he described as "efforts by oil producers to coordinate their activities to maximize the economic standing of their individual countries." "We're certainly conscious of the fact that it has an impact on the U.S. economy," Mr. Earnest said, adding that the White House prefers the current dynamic of low oil prices over the impact of high oil prices. By agreeing to attend the meeting, Saudi Arabia seemed to be bending to pleas from desperate fellow OPEC members, signaling it might agree to some collective output freeze even without Iran. Officials who attended the meeting said they had received assurances a deal was possible even without Iran participating in the meeting or the freeze. "We flew here with almost certainty of reaching an agreement," said Russian energy minister Alexander Novak. Still, he said, "Russia will not suffer from this." Another official who was involved in preparations for the gathering said that Mr. Naimi had said before coming to Doha that Iran didn't necessarily have to be a part of the deal. And Saudi officials reviewed early drafts of such an agreement in Doha the night before the meeting. For years, Mr. Naimi's level of autonomy helped make him one of the most powerful figures in global crude markets. Mr. Naimi, who isn't a member of the royal family and started working in Saudi Arabia's national oil company as a teenager, is an octogenarian and speculation has swirled for years that he could soon retire. Since King Salman came to power last year, he has shuffled the kingdom's economic, financial and oil management and placed all of it under the direct control of the deputy crown prince, his 30-year-old son. Prince Mohammed has exerted more direct control over all areas of policy, and spoken out publicly recently about privatizing Saudi Aramco, the national oil company. The oil markets, a lifeline for the economies of both Iran and Saudi Arabia, have become one stage where their struggle is playing out. The failure to reach a deal in Doha sent oil prices down as much as 6% in early trading Monday before recovering. U.S. oil prices closed below $40 on Monday, down 1.4%. On Monday, a top Iranian oil official said it would be an "illusion" to ask Iran to stop boosting its production. In an interview with Iran's oil ministry agency Shana, Iran's OPEC envoy Hossein Kazempour said countries that tried to derail Iran's nuclear talks "this time around sought to stop Iran from regaining its share in the global oil market by pressuring it to freeze its production." Saudi Arabia produces more than 10 million barrels of crude oil a day, roughly three times as much as Iran, which until recently has also had its exports restricted by international sanctions. In recent months, Iran and Saudi Arabia have been engaged in a fierce price war for customers in Europe and Asian, matching each others' discounts. Saudi Arabia has said for almost two years that it wouldn't cede market share by cutting or restraining production alone. --- Benoit Faucon, James Marson and Carol E. Lee contributed to this article. Credit: By Bill Spindle and Summer Said
Subject: Petroleum industry; Crude oil prices; International relations; Petroleum production
Location: United States--US Iran Saudi Arabia
People: Naimi, Ali I Mohamed bin Salman, Prince of Saudi Arabia
Company: Organization of Petroleum Exporting Countries--OPEC
Classification: 8510: Petroleum industry; 9178: Middle East
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.8
Publication year: 2016
Publication date: Apr 19, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781723339
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781723339?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Shares, Oil Break Lock-Step Dance
Author: Zeng, Min; Eisen, Ben
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Apr 2016: C.1.
Abstract:
[...]the bounce in riskier assets since mid-February, together with signs of stabilizing economies abroad and Federal Reserve plans to raise interest rates only slowly, has boosted market sentiment and broken the fear trade that drove correlations higher, money managers said.
Full text: The once-strong link between crude-oil prices and U.S. stocks has weakened, signaling markets have gained steadier footing this spring. The Dow industrials rose 107 points Monday to close above 18000 for the first time since last July, even as Nymex crude futures tumbled 1.4% to $39.78. The Dow and oil have moved in the same direction on half of the 12 trading days so far this month, less frequently than the 68% of trading days in January and 75% in February. Just two months ago, falling crude prices would likely have meant a decline in U.S. stocks as they would have intensified concerns about the health of energy firms and the global economy. Oil long has been tracked by traders in other markets as a vital sign for demand for goods and services. But since the Feb. 11 market low, analysts and traders have generally grown more sanguine about the global economy, reasoning that its tepid growth doesn't necessarily presage a recession or market shock. For now, any given decline in oil prices doesn't have the same power to rattle sentiment as before. "Oil has been less of a powerful force," said Jason Evans, co-founder of hedge fund NineAlpha Capital LP in New York. He said many investors still are coming to terms with lower oil prices. Recent correlations of movements in oil and stock prices have weakened substantially between oil and stocks, though they remain well above their historical average. The correlation between the S&P 500 and oil futures has fallen to 0.35 this month through Friday, well below the level of 0.94 for all of 2016 so far, according to WSJ Market Data Group. A correlation of 1 means oil and stock prices move by the same proportion in the same direction, while a correlation of minus-1 would mean they move proportionally in opposite directions. The correlation over the past 10 years has been minus-0.11. A strongly positive correlation between oil and stocks puzzled many analysts and economists during the market rout earlier this year and for part of the recent bounceback rally. Lower oil prices are good news for large energy users such as the U.S., fattening consumers' wallets, so it struck many observers as paradoxical that stocks would appear to follow oil. But the bounce in riskier assets since mid-February, together with signs of stabilizing economies abroad and Federal Reserve plans to raise interest rates only slowly, has boosted market sentiment and broken the fear trade that drove correlations higher, money managers said. Worries over a sharp slowdown in China helped drive broad selling in January. But exports from China expanded in March for the first time in nine months and capital flight has been easing. "China's growth is stabilizing and so any fall in the oil price looks less sinister than before," said Luca Paolini, chief strategist at Pictet Asset Management, which had $150 billion assets under management at the end of December. "The risk is that investors become too complacent." In the mid-March policy meeting, the Fed lowered its projection of the number of interest-rate increases this year to two from the four projected in their December meeting. Fed Chairwoman Janet Yellen said March 29 that she would be cautious in raising rates due to an uncertain global outlook. Investors took it as a signal that the central bank would be patient in tightening policy despite a robust domestic labor market and some increase in inflation. "Yellen being patient and cautious has been significant" in calming investors' nerves, said Douglas Cote, chief market strategist at Voya Investment Management, which had $205 billion under management at the end of March. The correlation between U.S. oil and the yield on the benchmark 10-year Treasury note fell to 0.32 Monday on a 30-day rolling basis from 0.87 a month ago, according to Penn Mutual Asset Management. Betting on a tight correlation between markets has been a hot wager among hedge funds, including those that apply computer algorithm trading programs. But "guys got tired of being whipped around by oil," said Scott Buchta, head of fixed-income strategy at Brean Capital LLC. "So they weaned themselves from that trade." Credit: By Min Zeng and Ben Eisen
Subject: Interest rates; Crude oil prices; Stock prices; Dow Jones averages; Securities markets
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 19, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781723627
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781723627?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Loses Catalyst to Rally Further --- Failure of producers to freeze output leaves market without driver; U.S. price falls 1.4%
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Apr 2016: C.4.
Abstract:
Money managers, including hedge funds, held an unusually large number of bets as of April 12 that U.S. and Brent crude prices would rise, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. Without an immediate bullish driver, traders could start to close out those wagers, sending prices lower.
Full text: Oil prices careened wildly after the collapse of talks aimed at capping production left investors at odds over what factors will dominate trading in the weeks ahead. Prices fell more than 6% in overnight trading, slumping as news emerged that leaders of big oil-producing nations failed to reach a deal to freeze production in Doha, Qatar, on Sunday. But oil started to rebound in U.S. trading after news of a strike in Kuwait that took more than half of the country's production offline on Sunday. By day's end, oil prices finished down 58 cents, or 1.4%, at $39.78 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 19 cents, or 0.4%, to $42.91 on ICE Futures Europe after briefly crossing into positive territory. Hope that producers would freeze output -- and that a deal could eventually lead to more meaningful production cuts -- was the main driver for U.S. oil prices surging as much as 60% from 13-year lows in February. Now that the biggest catalyst is gone, traders say other factors are likely to be slow-moving, making it harder for oil to rally in the short term. "It's not going to be one big event" that moves oil prices from current levels, said Nick Koutsoftas, a portfolio manager at Cohen & Steers Inc., who helps oversee $558 million in commodity investments. Mr. Koutsoftas expects U.S. oil to trade between $30 and $40 a barrel through year-end. Many investors expect prices to fall further in the near term. Global inventories of crude oil and refined products stand near record, with U.S. crude inventories at the highest in more than 80 years. Money managers, including hedge funds, held an unusually large number of bets as of April 12 that U.S. and Brent crude prices would rise, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. Without an immediate bullish driver, traders could start to close out those wagers, sending prices lower. The recent price rally also could spur U.S. producers to increase output. Many companies need to produce as much oil as possible to meet debt payments. With most futures contracts for 2017 and 2018 trading above $45 a barrel, some companies could lock in prices that let them put more drilling rigs to work, analysts say. Serengeti Asset Management has taken positions that would benefit from lower oil prices, said Leslie Biddle, a partner at the $1.5 billion hedge fund. "By the middle of the summer, we could see some American production coming online," she said. Others are more bullish, predicting that supply and demand will start to come into balance. U.S. crude output fell from a 44-year peak of 9.7 million barrels a day in April 2015 to 9 million barrels a day in March, according to the Energy Information Administration. The agency forecasts output will drop below 8.5 million barrels a day in August. At the same time, demand is expected to increase as summertime weather spurs drivers to hit the road. The EIA expects U.S. gasoline demand to average 9.3 million barrels a day this year, up from 9.2 million barrels a day in 2015. "I don't think you need a big bang to save the market," said Greg Sharenow, a portfolio manager at Pacific Investment Management Co., which manages $1.5 trillion. "You just need time to pass and output to decay." If there is widespread consensus, it is that the producers' inability to reach an agreement Sunday doesn't bode well for future cooperation. Many countries already are producing at full capacity, but the Organization of the Petroleum Exporting Countries has about 3.1 million barrels a day of so-called spare capacity, or additional production that could be reached within 90 days, according to the International Energy Agency. Saudi Arabia accounts for about two-thirds of the spare capacity. In a worst-case scenario for prices, producing nations could increase their output further, analysts said. --- Timothy Puko contributed to this article. Credit: By Nicole Friedman
Subject: Commodity prices; Crude oil
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Apr 19, 2016
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781723628
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781723628?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Regain Ground on Production Outages; Demand and supply slowly coming back into balance, some analysts say
Author: Baxter, Kevin; Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
While the lack of a production-limiting agreement this past weekend in Doha, Qatar, had a negative impact on market sentiment, underlying supply-and-demand conditions have improved marginally because of outages around the world that are expected to curtail output by about 2 million barrels a day, roughly the rate at which the global oversupply is estimated to be growing.
Full text: Oil prices jumped on Tuesday, as the markets moved past the failure of a group of oil producing nations to agree on a production freeze and focused on supply outages that are curbing the world's crude glut. The benchmark U.S. crude contract ended 3.3% higher at $41.08 a barrel on the New York Mercantile Exchange, while the global Brent contract gained 2.6% to end at $44.03 a barrel on the ICE Futures Europe exchange. While the lack of a production-limiting agreement this past weekend in Doha, Qatar, had a negative impact on market sentiment, underlying supply-and-demand conditions have improved marginally because of outages around the world that are expected to curtail output by about 2 million barrels a day, roughly the rate at which the global oversupply is estimated to be growing. An oil-worker strike in its third day in Kuwait has removed 1.3 million barrels a day from the market, and pipeline problems in Nigeria removed another 440,000 barrels, though some of that was restored on Tuesday. Some 150,000 barrels a day of Iraqi crude has come off the market because of a pipeline dispute between the central government and Kurdish regional authorities. And North Sea production maintenance is expected to remove another 160,000 barrels. London-based Energy Aspects said in a note that oil balances are on the mend with or without a production freeze from major producers , but added that finding market equilibrium will take time. "We aren't swinging from a huge oversupply to a huge deficit in crude overnight," the research consultancy said. "This is only likely to happen later in the year or early 2017." The collapse of the Doha talks is already starting to fade into the background, as worries over increased outages across the world start to dominate sentiment. Weakening production in Latin America and the U.S. is also accelerating declines. U.S. Energy Department data last week showed U.S. production fell below 9 million barrels a day for the first time since 2014. Olivier Jakob from the Swiss-based research firm Petromatrix said in a note that the market is betting on a recovery in supply-and-demand balance because much of the spare capacity that was available in 2015 has now disappeared. "We are back in an environment where the only spare capacity left is in storage tanks and if those barrels start to be used, then the crude oil structure tightens, which in turns provides some flat price support," Mr. Jakob said. Still, stored U.S. oil supplies are expected to keep rising for now. Analysts surveyed by The Wall Street Journal expect crude inventories to rise by 2 million barrels as of the end of last week in Energy Department data scheduled for release on Wednesday morning. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 3.1-million-barrel increase in crude supplies, a 1-million-barrel decrease in gasoline stocks and a 2.5-million-barrel decrease in distillate inventories, according to market participants. In refined product markets, gasoline futures rose 3% to $1.4799 a gallon, while diesel futures rose 2.2% to $1.2632 a gallon. Corrections & Amplifications: U.S. crude settled up 3.3% to $41.08. An earlier version of this article incorrectly quoted the June contract price and misstated that the benchmark closed at its highest mark of the year. It also incorrectly suggested an oil worker strike in Kuwait was expected to remove about 2 million barrels of supply from the market. That is the amount that could be removed in total by outages around the world, not just by the Kuwait strike. (April 19) Write to Kevin Baxter at Kevin.Baxter@wsj.com and Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Kevin Baxter and Christian Berthelsen
Subject: Petroleum industry; Inventory; Futures
Location: Qatar United States--US Kuwait
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781760917
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudis Mix Politics and Oil Policy; The kingdom's decision not to freeze production and to blame Iran underscores the regional rivalry
Author: Spindle, Bill; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
Mr. Naimi, who isn't a member of the royal family and started working in Saudi Arabia's national oil company as a teenager, is an octogenarian and speculation has swirled for years that he could soon retire. Since King Salman came to power last year, he has shuffled the kingdom's economic, financial and oil management and placed all of it under the direct control of the deputy crown prince, his 30-year-old son.
Full text: Saudi Arabia's decision over the weekend to refuse to freeze oil output without Iran's participation indicates a heightened willingness in the kingdom to mix politics and oil policy amid tensions with Tehran and Washington. Deputy Crown Prince Mohammed bin Salman's intervention into the talks among oil-producing countries in Doha was seen by analysts as a surprisingly open display of influence over oil policy that risked being seen as political jab at Iran. Iran refused to participate in the talks and the deputy crown prince reaffirmed during the meeting that the kingdom wouldn't do a deal without Iran, communicating that both via the media and directly to a Saudi delegation headed by the country's long-serving oil minister, Ali al-Naimi. That was a move away from what had seemed to be a growing willingness on the part of the Saudis work with Russia and many members of the Organization of the Petroleum Exporting Countries. It comes just days before President Barack Obama's meeting Wednesday with King Salman bin Abdul Aziz in Riyadh. Riyadh is seeking new assurances that the U.S. hasn't ditched loyal Gulf allies in favor of Iran. Mr. Obama has made the case that Saudi Arabia and Iran should reduce longtime tensions between their two countries to help tamp down instability in the Middle East. But the kingdom's decision instead to go it alone on oil-production policy highlighted its increasingly fierce rivalry with Iran. "The signs of tensions within the kingdom and the willingness to politicize oil production, the mixed signals and flip-flopping really have an impact," said Antoine Halff, an oil economist and fellow at Columbia University's Center on Global Energy Policy. Saudi Arabia offered no explanation for the sudden hardening of its position in Doha. White House press secretary Josh Earnest on Monday declined to comment on Saudi Arabia's decision during what he described as "efforts by oil producers to coordinate their activities to maximize the economic standing of their individual countries." "We're certainly conscious of the fact that it has an impact on the U.S. economy," Mr. Earnest said, adding that the White House prefers the current dynamic of low oil prices over the impact of high oil prices. By agreeing to attend the meeting, Saudi Arabia seemed to be bending to pleas from desperate fellow OPEC members, signaling it might agree to some collective output freeze even without Iran. Related * Oil Slips After Output Deal Fails * Russia Says Saudi, Other Gulf Countries Added Last-Minute Demands * Obama to Face Uneasy Allies at Gulf Summit * EU Energy Chief Sees Significant Role for Iranian LNG in Europe * Heard on the Street: Oil's Anti-Freeze: The Saving Grace of a Stalemate Officials who attended the meeting said they had received assurances a deal was possible even without Iran participating in the meeting or the freeze. "We flew here with almost certainty of reaching an agreement," said Russian energy minister Alexander Novak. Still, he said, "Russia will not suffer from this." Another official who was involved in preparations for the gathering said that Mr. Naimi had said before coming to Doha that Iran didn't necessarily have to be a part of the deal. And Saudi officials reviewed early drafts of such an agreement in Doha the night before the meeting. For years, Mr. Naimi's level of autonomy helped make him one of the most powerful figures in global crude markets. Mr. Naimi, who isn't a member of the royal family and started working in Saudi Arabia's national oil company as a teenager, is an octogenarian and speculation has swirled for years that he could soon retire. Since King Salman came to power last year, he has shuffled the kingdom's economic, financial and oil management and placed all of it under the direct control of the deputy crown prince, his 30-year-old son. Prince Mohammed has exerted more direct control over all areas of policy, and spoken out publicly recently about privatizing Saudi Aramco, the national oil company. He is also in charge of the military, and oversees an intervention in Yemen against a rebel group that is allied with Iran. The oil markets, a lifeline for the economies of both Iran and Saudi Arabia, have become one stage where their struggle is playing out. The failure to reach a deal in Doha sent oil prices down as much as 6% in early trading Monday before recovering. U.S. oil prices closed at $39.78 on Monday, down 1.4%. after rallying on news of a Kuwaiti oil-worker strike that shut off some output there On Monday, a top Iranian oil official said it would be an "illusion" to ask Iran to stop boosting its production. In an interview with Iran's oil ministry agency Shana, Iran's OPEC envoy Hossein Kazempour said countries that tried to derail Iran's nuclear talks "this time around sought to stop Iran from regaining its share in the global oil market by pressuring it to freeze its production." As Iran ramps up production now, aiming to eventually return to its former production level of four million barrels a day, it is competing for some of the same buyers as Saudi Arabia. Saudi Arabia produces more than 10 million barrels of crude oil a day, roughly three times as much as Iran, which until recently has also had its exports restricted by international sanctions. In recent months, Iran and Saudi Arabia have been engaged in a fierce price war for customers in Europe and Asian, matching each others' discounts. A freeze that left out Iran would likely result in Saudi Arabia losing market share to the Islamic Republic. And Saudi Arabia has said for almost two years that it wouldn't cede market share by cutting or restraining production alone, even if that meant lower prices and potentially less revenue. Mr. Naimi made that point repeatedly, including at OPEC meetings and industry conferences. Iran's ramp-up is expected to constitute almost all of the production growth in world markets this year, with the only other country obviously capable of raising production being Saudi Arabia. On Saturday in Tehran, Iranian Foreign Minister Javad Zarif said he saw no sign of a thaw in relations with Riyadh. The oil glut resulting from an all-out production race pushed prices down by as much as 75%, and has devastated OPEC members such as Venezuela and hurt the group as a whole. Declining revenues are even causing stress in Saudi Arabia, which ran through more than 10% of its financial reserves last year alone. For oil producers around the world, the collapse of what appeared to be an opportunity to curtail production means more pain. But it also means less oil over time as low prices make cutbacks in drilling and investment even more urgent, say analysts. Output is already turning down in the North Sea, Latin America and the U.S. Bob Sullivan, head of the oil and gas practice for energy consultancy AlixPartners, said that North American exploration and production companies are already facing a collective cash-flow shortage of $102 billion, and the shortage will grow if prices don't recover. "People were holding out hope that this would create momentum," he said. "Now they realize this isn't going to get fixed anytime soon." Benoit Faucon, James Marson and Carol E. Lee contributed to this article. Write to Bill Spindle at bill.spindle@wsj.com and Summer Said at summer.said@wsj.com Credit: By Bill Spindle and Summer Said
Subject: Royalty; Petroleum industry; Petroleum production
Location: Iran Russia United States--US Riyadh Saudi Arabia Saudi Arabia
People: Obama, Barack Earnest, Josh Naimi, Ali I Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Columbia University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781767099
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781767099?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Real Estate Boom Is Coming to an End, U.K.'s Grosvenor Warns; Stock-market volatility, low oil prices and political uncertainty have dampened demand
Author: Patnaude, Art
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract: None available.
Full text: A major U.K. landlord warned Tuesday that the boom in global real estate is coming to an end. London-based Grosvenor Group, which manages investments on behalf of the Duke of Westminster, said in its annual report that years of rising property values could be set to reverse. While it isn't possible to predict when the market will turn, "it is only a matter of time," said Nicholas Scarles, group finance director, in the 2015 report. Real-estate investment surged after the 2008 financial crisis, pushing values of commercial and residential property to record highs in cities around the world. Amid low interest rates, returns in property looked attractive compared with other asset classes. Stock-market volatility, low oil prices and political uncertainty have dampened demand. High-end housing markets in cities like London and New York have softened in the past year. Commercial property transaction volumes totaled $1.2 trillion in 2015, down 2% from 2014, according to data-provider Real Capital Analytics. Grosvenor is continuing to "expect and plan for a slowdown, particularly in high-end commercial and residential property," Mr. Scarles said. Other historic landlords in Britain have also been preparing for a downturn. For Grosvenor, preparation includes selling assets and pursuing development opportunities expected to mature during the next market upturn, Mr. Scarles said. In addition to high property values, "there is a risk that sustained low oil prices could lead to sovereign-wealth funds reducing investment in high-end commercial and residential property in London and elsewhere," he said. "All of this points to a correction in the near future," he said. Grosvenor manages a £6.7 billion ($8.42 billion) property portfolio spanning Hong Kong to San Francisco. The jewel in Grosvenor's crown is a 300-acre plot of central London that has been in the family since 1677. Once a marshy pasture, it now encompasses the Mayfair and Belgravia neighborhoods, home to hedge funds and embassies. Prices of luxury housing in these areas have fallen in the past year. "In the U.K., the top end of the residential market in London has passed its peak, due in part to the recent changes to stamp duty, along with the strength of sterling during 2015," said Mark Preston, Grosvenor's chief executive, in the report. In 2015, the total return for Grosvenor was 9%, down from 13.1% in 2014. Pretax profit was £526.6 million, down from £681.8 million in 2014. "While we have seen performance above the cycle average in each of the years since the financial crisis, we anticipate the next few years will bring a more challenging environment," Mr. Scarles said. Write to Art Patnaude at art.patnaude@wsj.com Credit: By Art Patnaude
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Real Estate
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781816841
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781816841?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Seventy Seven Energy Plans to File for Bankruptcy; Oil-field services provider reaches restructuring agreement with many of its lenders
Author: Hufford, Austen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
Oil-field services provider Seventy Seven Energy Inc. said Tuesday that it plans to file for Chapter 11 bankruptcy protection and that it has reached a restructuring agreement with many of its lenders, becoming the latest casualty of the energy-price downturn.
Full text: Oil-field services provider Seventy Seven Energy Inc. said Tuesday that it plans to file for Chapter 11 bankruptcy protection and that it has reached a restructuring agreement with many of its lenders, becoming the latest casualty of the energy-price downturn. Seventy Seven's planned bankruptcy is slated to convert debt into common shares of a new company. Seventy Seven Energy said operations will continue and that suppliers, contractors and employees will continue to be paid throughout the bankruptcy process. Seventy Seven said it has already reached an agreement with some of its lenders. Lenders of a $650 million 2019 note will receive 96.75% of the company's new common stock to be issued, pending a vote by other lenders. Holders of a $450 million 2022 note will vote on whether to accept 3.25% of the company's new common stock and warrants worth up to 15% of the new company's value. The company intends to start a prepackaged Chapter 11 proceeding on or before May 26. A solicitation process will begin by Friday. As energy prices declined in recent years, oil field activities plummeted, severely hurting the market for many of Seventy Seven's main services. Write to Austen Hufford at austen.hufford@wsj.com Credit: By Austen Hufford
Subject: Bankruptcy reorganization; Bankruptcy; Common stock
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781817061
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781817061?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi's Blow to Doha Deal Could Push Some Oil-Reliant Nations to the Brink; Struggling oil-dependent nations wanted output cap to help drive up prices and boost their economies
Author: Faucon, Benoit; Williams, Selina; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
[...]speaking to reporters on the side of a Moscow conferences, he said that the drop in oil "prices could be so pronounced that this reality may force us to meet again," according to the website of the country's state-run oil company Petroleos de Venezuela SA. In Russia, where the government was among the architects of the Doha talks, oil minister Alexander Novak told the Moscow press corp that the failure to reach a deal would delay a recovery in oil prices to mid-2017.
Full text: Saudi Arabia's decision to reject an international plan to limit oil output could push other big producers to the brink almost two years into a historic crude-price slump. Saudi Arabia, the world's largest exporter of crude, scuttled the hopes of countries like Russia, Venezuela and Angola, which wanted a deal that would freeze production at January levels and begin regulating the global glut of oil that has sunk prices. Nearly half of the countries sitting at the table in recent days in Doha--Iraq, Nigeria, Angola , Ecuador, Venezuela and Azerbaijan, among others--are seeking financial support from international backers. In Venezuela, where President Nicolás Maduro trumpeted the oil-producer talks as a first step toward fiscal recovery, the economy is set to contract again this year as petroleum revenues dwindle. The cash crunch has hurt power generation, prompting the government to declare a national holiday on Monday to conserve energy usage and to consider a time-zone change. Without naming any country, Venezuela's oil minister Eulogio del Pino said last-minute decisions had "sabotaged" the summit. But speaking to reporters on the side of a conference in Moscow on Monday, he said the drop in oil "prices could be so pronounced that this reality may force us to meet again," according to the website of the country's state-run oil company Petróleos de Venezuela SA. In Russia, where the government was among the architects of the Doha talks, oil minister Alexander Novak said the failure to reach a deal would delay a recovery in oil prices to mid-2017. Senior Russian government officials had been counting on higher oil prices to lift the country out of a recession. Now, instead of a freeze in production this year, "we expect growth in production compared with 2015," Mr. Novak said. Russia's economy contracted 3.7% in 2015 amid weaker oil prices and Western sanctions. The country's central bank forecasts gross domestic product to shrink a further 1.5% this year. Angola, a member of the 13-nation Organization of the Petroleum Exporting Countries, is seeking financial aid from the International Monetary Fund as it prepares for a critical political transition. "The government of Angola is aware that the high reliance on the oil sector represents a vulnerability to the public finances and the economy more broadly," Angola's finance ministry said this month. Azerbaijan, which relies on oil and gas exports for 75% of its revenues and supported the Doha talks, has also held talks with the IMF on a possible bailout. Nigeria, an OPEC member with inflation at nearly 13%, is holding talks with the World Bank to help it close a forecast $11-billion budget deficit this year. In Kazakhstan, where the government relies on oil for around half of its revenue, the IMF forecast GDP growth of 0.1% this year, compared with 1.2% in 2015 and 6% in 2013 before oil prices started falling. Meanwhile, vulnerable oil producers are beginning to pump less petroleum because they don't have enough money to make investments in the energy sector. Venezuelan crude production is down by 46,000 barrels a day in March compared with its 2014 average. In Nigeria, a new wave of sabotage has taken 189,000 barrels a day offline in the same period. Kazakhstan's oil output is expected to decline this year for the third year in a row because of spending cuts and delays in launching output at the giant Kashagan oil field. Azerbaijan's production is also is expected to fall this year mostly because of declines at the BP PLC-operated ACG oil field. In contrast, Saudi Arabia is in a better position to ride out low prices. The kingdom still held foreign reserves worth $582 billion as of late February, according to the IMF, and plans to set up a sovereign fund worth $2 trillion. The Kingdom also has the ability to boost production by 2 million barrels a day at will, according to the International Energy Agency, the bulk of the world's available spare production capacity. Related * 5 Questions for Oil Markets After Doha * No Agreement on Oil Freeze at Doha Meeting * Oil Slips After Output Deal Fails The Saudis had signaled they were ready to make a deal in Doha over the weekend. The plans changed at the last minute, a day after Deputy Crown Prince Mohammed bin Salman told Bloomberg thatthe kingdom wouldn't make a deal unless Iran also constrained its production. Iran and Saudi Arabia are longtime rivals for power and influence in the Middle East. Olivier Jakob, an analyst at Switzerland-based energy consultancy Petromatrix, said Saudi oil minister Ali al-Naimi would have lost credibility with Russia and others in what would have been a symbolic first step which could have led to greater OPEC and non-OPEC cooperation in the future. A Persian Gulf oil official familiar with Saudi thinking said the kingdom's oil officials are "well aware that they have lost their credibility." "But the kingdom is not totally shutting the door on further cooperation in the future," the official said, noting that there could be renewed talks on oil production "when the picture in the market is clearer." Write to Benoit Faucon at benoit.faucon@wsj.com , Selina Williams at selina.williams@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon, Selina Williams and Summer Said
Subject: Petroleum industry; Oil fields; Prices; Economic development; Energy industry
Location: Azerbaijan Angola Nigeria Venezuela Russia Saudi Arabia
People: Novak, Alexander del Pino, Eulogio Maduro, Nicolas
Company / organization: Name: Petroleos de Venezuela SA; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781817188
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781817188?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dollar Weakens on Tepid Housing Data, Oil Price Surge; U.S. housing starts hit lowest level since October
Author: Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 currencies, was recently down 0.4% to 85.68, amid losses against the euro and emerging-market currencies.
Full text: The dollar weakened Tuesday, weighed on by soft U.S. economic data and a surge in oil prices. The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 currencies, was recently down 0.4% to 85.68, amid losses against the euro and emerging-market currencies. Home-building starts in the U.S. slowed in March to the lowest level since October, government data showed, providing further evidence for those who believe that global and domestic conditions aren't ideal to warrant an interest-rate increase from the Fed. Expectations of a dovish Fed weaken the dollar, as low rates make the currency less attractive to yield-seeking investors. Cloudy global growth prospects, a possible U.K. exit from the European Union and coming U.S. elections will make it difficult for the Fed to raise rates in coming months, said Shaun Osborne, a strategist at Scotiabank. "The bar for rate increases seems to be fairly high at this point," he said. At the same time, a jump in oil prices revved up investors' risk appetites, buoying stocks and the currencies of commodity-producing nations. The benchmark U.S. crude contract ended 3.3% higher at $41.08 a barrel on the New York Mercantile Exchange, while the global Brent contract gained 2.6% to end at $44.03 a barrel on the ICE Futures Europe exchange. The euro was recently up 0.4% at $1.1360. The dollar was down 0.7% against the Mexican peso, at 17.30. Write to Ira Iosebashvili at ira.iosebashvili@wsj.com Credit: By Ira Iosebashvili
Subject: American dollar; Currency
Location: United States--US United Kingdom--UK
Company / organization: Name: Scotiabank; NAICS: 522110; Name: New York Mercantile Exchange; NAICS: 523210; Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781826474
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781826474?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
What Is the 'Magic Number' for the Price of Oil? At $50 a barrel, falling Brent prices start to hurt rather than help shares and other risky assets
Author: Mackintosh, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
Oil is driven both by supply issues--such as the weekend meeting of members of the Organization of the Petroleum Exporting Countries and Russia in Qatar, where ministers failed to negotiate a production freeze --and by global demand.
Full text: Here's a number to focus on: $50. That's per barrel, the price of Brent crude oil at which falling prices started to hurt rather than help shares and other risky assets. Monday's 6% fall and rebound in oil pushed equities down and back up, once again demonstrating its importance. Brent prices rose 2.6% to $44.03 a barrel Tuesday, well within sight of $50. Despite the obvious impact on Monday, there are some signs that the influence of oil on other assets may be fading. If the price keeps going up, the question is not only whether it will carry on, but whether more expensive oil will continue to be good news for shares. The answer depends to a large extent on the explanation for why the link was so tight to begin with. Wind back to last summer, when Brent tumbled below $50 and stayed down at levels not reached since the depths of the financial crisis. As it fell toward $50, it became more important to shares--and not only to shares in oil companies and airlines, which normally suffer and benefit most respectively from cheap oil. The main reason: spillover effects from spending cuts and defaults at energy companies. The speed of the oil decline led to rapid retrenchment in capital spending and widespread job cuts, both with knock-on effects on the real economy. At the same time a sharp rise in defaults created fear of financial contagion from shale drillers, which had financed their operations with a flood of junk bonds and from commodity-dependent emerging-market companies with excessive debt. As oil has risen again, those fears have receded. There is still little sign that Americans are spending more of the money they save from cheaper fuel, something economists had assumed would boost growth. But the pressure for even deeper cuts by oil companies has reduced. "If oil stays around $40, the correlations will continue to break down," says Andrew Milligan, head of global strategy at insurance group Standard Life. This is not merely about the importance of Big Oil to major indexes. Even stripping out energy stocks, the tendency of the S&P 500 to move together with oil increased sharply as the crude price dropped, as the International Monetary Fund showed last week. The correlation between Brent, the global oil benchmark, and the S&P 500 is still exceptionally high on multi-month measures. But earlier this month the 10-day correlation reached its lowest since last July, when Brent stood at $56 a barrel. The effects of the oil price are tricky to analyze because so much depends on the cause. Oil is driven both by supply issues--such as the weekend meeting of members of the Organization of the Petroleum Exporting Countries and Russia in Qatar, where ministers failed to negotiate a production freeze --and by global demand. If demand rises, a higher price might be good news for risky assets as it reflects strength in the global economy. In 2009, in the aftermath of the financial crisis, shares and oil soared together and the correlation between the two was close to perfect. On the other hand, if the oil price rises because of a supply shock, it can hammer risky assets. In 1990, the first Gulf War tripled the price of oil, and shares suffered badly, with correlations almost exactly inverse. The recent rise in oil doesn't neatly fit either model (although this week's rise was helped by a Kuwaiti oil-worker strike ). Instead, it seems to be mostly about reduced fear of extreme outcomes for the economy. Worries earlier this year about recession, China and financial stress receded, helped by signs that lower oil prices were stimulating demand. But the traditional interpretations may come back into play as $50 draws closer. After the political standoff between Saudi Arabia and Iran at OPEC, it seems unlikely that the cartel will slash production. That leaves the best hope for higher prices with the demand side, if the economy were to start showing signs of strength. Better-off consumers should mean gains for stocks, so there is little to worry about from such a demand-driven oil price rise. Especially as part-drilled shale wells can quickly be finished off, keeping a cap on prices and further reducing the financial stress in the shale sector. Such a self-reinforcing positive cycle remains no more than hope. But even if oil merely stays roughly where it stands today, investors in stocks should at least be able to stop worrying so much about crude prices and Middle Eastern politics and put their focus where it should be, on earnings and valuations. Write to James Mackintosh at James.Mackintosh@wsj.com Credit: By James Mackintosh
Subject: Economic models; Energy economics; Economic crisis; Capital expenditures; Crude oil prices
Company / organization: Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781899739
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781899739?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
What Oil Glut? Outages Put Supply, Demand Close to Balance; Crude producers scramble to restore pumping halted by strikes, sabotage and payment disputes, highlighting the diminishing of spare capacity
Author: Faucon, Benoit; Said, Summer; Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
Related Coverage * What Is the 'Magic Number' for the Price of Oil? (April 19) * Saudi's Blow to Doha Deal Could Push Some Oil-Reliant Nations to the Brink (April 19) * 5 Questions for Oil Markets After Doha (April 17) * Barrel Breakdown: The Cost of Producing a Barrel (April 15) Brent crude, the global benchmark, rose 2.6% Tuesday to $44.03 a barrel on ICE Futures Europe.
Full text: LONDON--Oil-producing governments across the world are scrambling to address petroleum outages that have taken nearly 2 million barrels a day off the market and sent crude prices rallying . The outages have been caused by an oil-worker strike in Kuwait , alleged pipeline sabotage in Nigeria and payment disputes in Iraqi Kurdistan. The missing oil supply--about 1.85 million barrels a day--has essentially brought the oil market's supplies back into balance with demand, if only temporarily, and raised questions about big producers' ability to quickly ramp up during supply outages. The situation offers a glimpse of what the oil market would look like if the current glut were to end after nearly two years of weighing on prices. Oil demand is expected to average 94.8 million barrels a day in the first quarter of 2016, compared with oil supply of 96.4 million barrels a day. Related Coverage * What Is the 'Magic Number' for the Price of Oil? (April 19) * Saudi's Blow to Doha Deal Could Push Some Oil-Reliant Nations to the Brink (April 19) * 5 Questions for Oil Markets After Doha (April 17) * Barrel Breakdown: The Cost of Producing a Barrel (April 15) Brent crude, the global benchmark, rose 2.6% Tuesday to $44.03 a barrel on ICE Futures Europe. U.S. prices rose 3.3% to $41.08 on the New York Mercantile Exchange. The rally occurred just two days after big oil producers failed to reach a deal in Qatar to limit production, a development that initially sent prices down until traders noticed the supply shortages. "This is definitely the famous canary in the coal mine telling us something about the state of the oil market. It is telling us that the oil market is more in balance than widely assumed," said Bjarne Schieldrop, chief commodities analyst at SEB, a leading Nordic corporate bank. Oil-producing governments said they were working to resume pumping as soon as possible. In Kuwait, where oil workers upset over apparent pay cuts and plans to privatize parts of the energy industry went on strike last weekend, the government has threatened the strikers with legal action. The military reportedly has taken over some production sites and reopened them after workers disabled them. State-run Kuwait National Petroleum Co. regrouped staff at its most critical production sites and got output back up to 1.5 million barrels a day, Chief Executive Mohammad Al-Mutairi told state-run news agency KUNA on Monday. That is still only about half of the previous level of 2.8 million barrels a day reported by the member of the Organization of the Petroleum Exporting Countries. The Kuwaiti oil company has been authorized to recruit contractors from abroad to operate some of its facilities. In Nigeria, another OPEC member, Italy's Eni SpA said Tuesday it resumed pumping its Brass River crude in the Niger Delta, whose output normally is about 140,000 barrels a day. The production had been disrupted after a pipeline caught fire in an area where oil theft is frequent. About 300,000 barrels a day of Nigerian crude were still offline, according to Nigerian news accounts, because of a late February oil spill at a terminal run by a Royal Dutch Shell PLC joint venture. Shell confirmed the outage but declined to comment further. In Iraq, the central government has said it stopped pumping about 150,000 barrels a day in March from the giant Kirkuk fields in the north into the main export pipeline following a dispute with an autonomous Kurdish authority that controls the pipeline transporting the oil. The shift to a tighter market could get worse in coming months. Oversupply is set to shrink from 1.5 million barrels a day in the first half of the year to 0.2 million barrels a day in the second half, according to the International Energy Agency, at a time producers are facing further supply risks. The disruptions come as oil supplies outside OPEC are set to decline this year by an estimated 700,000 barrels a day, driven by a slump in U.S. shale-oil production. At the same time, several of OPEC's members are pumping at capacity, reducing the cartel's ability to ramp up production when there is a shortage of crude. The difference between what a country is pumping now and what it could theoretically pump is known as "spare capacity," a number that fell by about 100,000 barrels a day to 3.13 million barrels a day in March from the beginning of the year, according to the IEA. In Saudi Arabia, spare capacity stands at about 2 million barrels a day, but the amount it could immediately ramp up to is only about 500,000 barrels a day, Olivier Jakob, head of Swiss-based consultancy Petromatrix, said in a note Tuesday. The price rally may have been tempered by the world's huge inventories of stored oil--crude that was bought at low prices and stored until it could be sold for higher prices. Commercial oil stocks in industrialized countries in February stood at about 3 billion barrels, according to OPEC, though that is still about 352 million barrels above the latest five-year average. "We are back in an environment where the only spare capacity left is in storage tanks, and if those barrels start to be used then the crude-oil structure tightens, which in turn provides some flat price support," Mr. Jakob said in a note. Write to Benoit Faucon at benoit.faucon@wsj.com , Summer Said at summer.said@wsj.com and Selina Williams at selina.williams@wsj.com Credit: By Benoit Faucon, Summer Said and Selina Williams
Subject: Pipelines; Petroleum production; Price increases; Supply & demand
Location: United States--US Nigeria Kuwait
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781957679
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781957679?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Italian Government Survives Two Separate Confidence Votes Over Oil Scandal; Second vote was presented by other opposition parties, including Silvio Berlusconi's Forza Italia and anti-immigration Northern League
Author: Zampano, Giada
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Apr 2016: n/a.
Abstract:
Ms. Guidi resigned last month amid allegations that she may have used her influence to help in the development of an oil field that would benefit her partner financially, embarrassing the government of Prime Minister Matteo Renzi and sparking a chorus of accusations of conflict of interest from opposition parties, which called for the entire government to step down.
Full text: ROME--Italy's government survived on Tuesday two separate confidence votes proposed by the opposition parties over a recent oil scandal that led to the resignation of Industry Minister Federica Guidi. Ms. Guidi resigned last month amid allegations that she may have used her influence to help in the development of an oil field that would benefit her partner financially, embarrassing the government of Prime Minister Matteo Renzi and sparking a chorus of accusations of conflict of interest from opposition parties, which called for the entire government to step down. The Renzi government won both votes in Italy's Senate, where it holds a weaker majority than in the Lower House. The first no-confidence motion, presented by the antiestablishment Five-Star Movement, was rejected by senators with 183 votes against and 96 votes for it. The second one, presented by all the other main opposition parties, including Silvio Berlusconi's center-right Forza Italia party and the anti-immigration Northern League, was rejected with 180 votes against and 93 for it. The motions didn't have much chances to pass, since the government holds a thin majority in the Senate, but it is supported by other small groups of senators. Prosecutors' documents published by Italy's main newspapers last month included phone-tapping transcripts showing that Ms. Guidi and her partner, businessman Gianluca Gemelli, in 2014 discussed a planned government budget amendment affecting the development of an oil field where he would get an engineering contract. Ms. Guidi isn't under investigation in the case and has repeatedly denied any wrongdoing. The Italian premier defended his government's action in a speech to senators on Tuesday, rejecting any accusation of conflict of interest. Mr. Renzi added he respected the prosecutors' work, but would wait for the final outcome of the investigation before drawing his conclusions. Mr. Renzi's government has been recently under increasing pressure over its stance on a referendum on the extensions of some oil and gas offshore concessions, which didn't reach the necessary quorum to be valid last Sunday. The premier, who had openly campaigned for abstention, said on Sunday that the failure of the referendum was a victory for workers in the oil business sector and staunchly defended his government's energy policies. The Italian premier has staked his political future on a proposed overhaul of the country's constitution which would sharply reduce the powers of the upper house, the Senate, and faces a key constitutional referendum planned for October. Write to Giada Zampano at giada.zampano@wsj.com Credit: By Giada Zampano
Subject: Conflicts of interest; No confidence motions & votes; Oil fields; Presidents
Location: Italy
People: Berlusconi, Silvio
Company / organization: Name: Forza Italia; NAICS: 813940; Name: Northern League; NAICS: 711211
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 19, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1781980367
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1781980367?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Colombian Oil Producer Pacific Falls From Grace; Pacific's restructuring would mark reversal of fortune for company that once stood at vanguard of continent's oil boom
Author: Sara Schaefer Muñoz; Anatoly Kurmanaev; Sara Schaefer Muñoz; Kurmanaev, Anatoly
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract: None available.
Full text: BOGOTÁ, Colombia--Latin America's largest privately owned oil producer said it was preparing to file for bankruptcy-court protection after reaching a tentative restructuring deal Monday that leaves shareholders with cents on the dollar. The deal would cap a humbling turn of events for Pacific Exploration & Production Corp., which once stood at the vanguard of South America's oil boom. At its peak earlier this decade, Pacific was worth $8 billion, employed 30,000 people and had so much cash it flew pop star Marc Anthony to a corporate party. Pacific has become a major bust from the global commodity downturn, a slide that current and former directors and employees say was aggravated by mismanagement, wild overspending and poor investments. "Pacific was a big success story, but it didn't make the right choices," said Nathan Piper, an analyst at RBC Capital Markets. "It didn't have to be in the situation it's in today." Pacific spokesman Tom Becker said management made investment decisions based on the best available information at the time. The restructuring agreed with Canadian hedge fund The Catalyst Capital Group Inc. on Monday would inject $500 million and cut $5 billion of the company's debt, at the cost of wiping out equity holders. The deal now needs to be approved by two-thirds of the bondholders. Founded by Venezuelan oil and mining executives who had fled their country's socialist government, the scrappy startup grew to become Colombia's second-largest company, after state-controlled Ecopetrol SA, and helped transform the country into the continent's third largest producer. In 2012, Colombian magazine Dinero featured the management team on its cover, with the headline "The Magic of Pacific." Pacific's highly visible executives, Serafino Iacono and Ronald Pantin, flew in private jets and built sprawling country houses. Pacific sponsored the national soccer team, an annual PGA Golf Championship and in 2013, congress gave Mr. Iacono the prestigious Order of Democracy award for his business activities. Money flowed in, and right out. The firm made nearly a dozen acquisitions, branching into natural gas and infrastructure, among them a 35% stake in the ODL oil pipeline and a 41.6% stake in the city of Cartagena's $600 million new port, which the company said helped it grow and decrease operating costs. But analysts and employees say the company's spending spree--especially the cash acquisition of oil explorer Petrominerales Ltd. in 2014 for $909 million--racked up an unsustainable $5 billion in debt. "We had huge overhang just as times turned bad," said a former executive, who said the firm's directors took out more loans to pay for Petrominerales instead of more prudently paying in shares. Even then, investors were willing to pile in. Mexican conglomerate Grupo Industrial Alfa SAB boosted a small stake to 19% of the company in 2014 for $1 billion. Analysts also say that Pacific overstated reserves, inflating demand for its debt and shares long after the price of crude had fallen and production became less profitable. Mr. Becker, the Pacific spokesman, said the company hired independent third-party reserves analysts in accordance with securities laws. The company tasked to calculate Pacific's reserves, Canada-based Petrotech Engineering Ltd., said in 2013 that the company had more than 30 million barrels of proven reserves in its CPE-6 block in Colombia's eastern plains, even as the owner of the other half of the block, Canada's Talisman Energy Inc., said its own reserve calculations for CPE-6 were zero. In an interview, Petrotech founder John Yu said he based his calculations on several factors allowed under Canadian law, including an estimated future oil price that was higher than what it turned out to be. People inside and outside the company said Pacific directors based their 2015 budget on $80 per barrel oil when the futures market was already pricing in a further fall. Mr. Becker said management "immediately began to cut costs and budgets to reflect the new oil price reality" in late 2014. As Pacific's woes piled on in early 2015, a group of young Venezuelans investors saw an opportunity to snatch the company on the cheap, giving them a vehicle to expand into the massive oil sector back home. They racked up a nearly 20% stake in the company for $290 million. Those investors, grouped in investment vehicle O'Hara Administration Co., are led by electricity contractor Alejandro Betancourt, whose company Derwick Associates has been investigated by U.S. authorities for bribery . A Derwick spokesman said the investigation was suspended after the Justice Department reviewed its bank accounts. The Justice Department declined to comment on the status of the investigation. Just days after O'Hara upped its stake, Mexico's Alfa and U.S.-based partner Harbour Energy Ltd. offered to buy Pacific for a high of 6.50 Canadian dollars (US$5.1) a share--Pacific is also listed in Toronto--to use the company in Mexico's new oil auctions. But new Venezuelan shareholders blocked the offer, hoping to gain control of the company themselves. The Alfa bid for Pacific was "a miracle" amid low world oil prices, said Ian MacQueen, analyst at Paradigm Capital. "It was also [unbelievable] that the bid was turned down." When the deal failed, Pacific's shares plummeted 45% further, to C$2.85 on the Toronto stock exchange. As prices of crude continued to sink, so did the share price, and the O'Hara group lost 70% of their initial investment. Now O'Hara, and the rest of Pacific's shareholders, could face a total wipeout if the restructuring deal is approved. Top management, however, will be able to own up to 10% of the restructured company's shares under the incentive plan offered by Catalyst. Write to Anatoly Kurmanaev at Anatoly.kurmanaev@wsj.com Credit: By Sara Schaefer Muñoz and Anatoly Kurmanaev
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782019398
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782019398?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Slips as Kuwait Oil Industry Resumes Normal Operations; Brent is down 59 cents or 1.3% at $43.44 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
According to Kuwait News Agency, the strike organizer Oil and Petrochemical Industries Workers Confederation said the strike was "overwhelmingly successful" through which participants displayed their "ability to affect the production process which was achieved."
Full text: Crude oil prices retreated in early Asia trade after Kuwait oil workers called off a three-day strike, a key support that kept oil prices afloat after major global producers failed to agree to a production freeze last weekend. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded at $40.32 a barrel, down $0.76, or 1.9%, in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell $0.59, or 1.3%, to $43.44 a barrel. According to Kuwait News Agency, the strike organizer Oil and Petrochemical Industries Workers Confederation said the strike was "overwhelmingly successful" through which participants displayed their "ability to affect the production process which was achieved." The strike reduced around 60% of the country's daily production to around 1.1 million barrels a day, said BMI Research. "[The end of the strike] removes one of the key supports that allowed prices to recover easily after the disappointing outcome of the Doha talks," said Tim Evans, a Citi Futures analyst. "At a minimum, the relatively quick resolution of the strike will test whether traders remain eager to buy on dips or whether we see a cycle of long liquidation," he added. Earlier in the week, prices rose as the market looked past the failure of a group of major oil producers to agree on an output freeze by focusing on supply outages around the world. Apart from Kuwait, disruptions in Iraq, Nigeria, and the North Sea also curtailed global output by around 750,000 barrels a day, roughly half the rate at which the total world supply is estimated to be growing. "With oversupply back in focus, prices are likely fall in the near term amid slower demand growth," said Gao Jian, an energy analyst at the Shandong-based SCI International. Growth in global oil demand is expected to moderate to around 1.2 million barrels a day in 2016, below the 1.8 million barrels a day expansion last year, based on the latest monthly report by global energy watchdog International Energy Agency. This week, market watchers will be taking cues from the weekly U.S. production and inventories data released by the U.S. energy department. Analysts surveyed by The Wall Street Journal expect crude inventories to rise by 2 million barrels while the American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 3.1-million-barrel increase in crude supplies, a 1-million-barrel decrease in gasoline stocks and a 2.5-million-barrel decrease in distillate inventories, according to market participants. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--fell 209 points to $1.4590 a gallon, while May diesel traded at $1.2519, 113 points lower. ICE gasoil for May changed hands at $373.00 a metric ton, down $5.50 from Tuesday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Supply & demand; Inventory; Futures
Location: Kuwait Asia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782027730
Document URL: https://login.ezproxy.uta.edu/login?url=https://search.proques t.com/docview/1782027730?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Treasurys Little Changed Despite Lower Oil
Author: Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract: None available.
Full text: It's looking like a quiet day in the Treasury market. The 10-year yield dipped a bit in the morning, responding to lower oil prices and muted equity moves, but it's having trouble sustaining any rally. With only existing home sales on the economic calendar and no Fed officials expected to speak, bonds could struggle to find a direction. The 10-year yield is at 1.782% vs. 1.783% Tuesday. Write to Sam Goldfarb at sam.goldfarb@wsj.com Credit: By Sam Goldfarb
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782033215
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782033215?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dollar Lower Against Yen on Weaker Asian Stocks, Oil; The dollar was lower against the yen in directionless Asia trade, as investors bought into the perceived safety of the Japanese currency following weakness in Asian stock markets and oil prices.
Author: Kachi, Hiroyuki
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
Investors are shifting slightly away from the dollar-yen trade, after confirming the dollar's strong resistance around Y109.50 in recent sessions, said Shinsuke Sato, head of the foreign-exchange trading group at Sumitomo Mitsui Banking Corp. "We are seeing yen buying, though it's not standing out.
Full text: The dollar was lower against the yen in directionless Asia trade, as investors bought into the perceived safety of the Japanese currency following weakness in Asian stock markets and oil prices. The greenback drifted to as low as Y108.87 early in the afternoon session before changing hands at Y108.97 around 0450 GMT. That compared with Y109.21 late Tuesday in New York. Investors have witnessed rapidly changing risk sentiment since the beginning of the week, when demand for the yen increased as a safe haven after major global oil producers failed to agree to a production freeze Sunday. The yen buying was also supported buy the comments of U.S. Treasury Secretary Jack Lew that the Japanese currency's recent appreciation has been orderly, despite Japanese authorities' description of the yen movement as "one-sided" and speculator-driven. But the Japanese currency then weakened on a quick turnaround in market sentiment on a recovery in stocks and oil prices. Investors are shifting slightly away from the dollar-yen trade, after confirming the dollar's strong resistance around Y109.50 in recent sessions, said Shinsuke Sato, head of the foreign-exchange trading group at Sumitomo Mitsui Banking Corp. "We are seeing yen buying, though it's not standing out. It looks like investors are locking in profits," said Mr. Sato. In addition, only a moderate gain in the benchmark Nikkei Stock Average is prompting buying into the safety of the yen. The benchmark Nikkei rose 0.4% midday after rising 1.3% earlier in the session. The Shanghai Composite Index lost more than 2%. But the greenback was higher against commodity-linked currencies, as oil prices weakened in early Asia trade Wednesday after Kuwait oil workers called off a three-day strike. The Australian dollar fell to $0.7777 from $0.7813. The Canadian dollar also fell against the U.S. dollar, which was changing hands at C$1.2719 from C$1.2669 late Tuesday. The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.07% at 85.74. Currency market traders and dealers showed a muted reaction to a smaller-than-expected Japan merchandise trade surplus released earlier Wednesday. Japan's trade balance for March came in at a surplus of Y755 billion compared with a Y222.7 billion surplus in the same month a year earlier, as a global economic slowdown has been dragging downing exports. Economists polled by The Wall Street Journal and the Nikkei had expected a Y883.3 billion surplus. Ahead of the European Central Bank's policy setting meeting scheduled on Thursday, the euro rose slightly to $1.1362 from $1.1356, while the common currency fell to Y123.83 from Y124.06. Write to hiroyuki.kachi@wsj.com Credit: By Hiroyuki Kachi
Subject: American dollar; Yen; International finance; Stock exchanges; Investments; Currency
Location: Asia United States--US New York
Company / organization: Name: Sumitomo Mitsui Banking Corp; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782062671
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782062671?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
World News: Saudi Rebuff Hurts Other Oil Exporters --- Rejection of deal to limit output heightens distress for nations desperate for revenue
Author: Faucon, Benoit; Williams, Selina; Said, Summer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Apr 2016: A.10.
Abstract:
[...]speaking to reporters on the side of a conference in Moscow on Monday, he said the drop in oil "prices could be so pronounced that this reality may force us to meet again," according to the website of the state-run oil company Petroleos de Venezuela SA. In Russia, where the government was among the architects of the Doha talks, oil minister Alexander Novak said the failure to reach a deal would delay a recovery in oil prices to mid-2017.
Full text: Saudi Arabia's decision to reject an international plan to limit oil output could push other big producers to the brink almost two years into a historic crude-price slump. Saudi Arabia, the world's largest exporter of crude, scuttled the hopes of countries like Russia, Venezuela and Angola, which wanted a deal that would freeze production at January levels and begin regulating the global glut of oil that has sunk prices. Nearly half of the countries sitting at the table in recent days in Doha -- Iraq, Nigeria, Angola, Ecuador, Venezuela and Azerbaijan, among others -- are seeking financial support from international backers. In Venezuela, where President Nicolas Maduro trumpeted the oil-producer talks as a first step toward fiscal recovery, the economy is set to contract again this year as petroleum revenues dwindle. The cash crunch has hurt power generation, prompting the government to declare a national holiday Monday to conserve energy usage and to consider a time-zone change. Without naming any country, Venezuela's oil minister Eulogio del Pino said last-minute decisions had "sabotaged" the summit. But speaking to reporters on the side of a conference in Moscow on Monday, he said the drop in oil "prices could be so pronounced that this reality may force us to meet again," according to the website of the state-run oil company Petroleos de Venezuela SA. In Russia, where the government was among the architects of the Doha talks, oil minister Alexander Novak said the failure to reach a deal would delay a recovery in oil prices to mid-2017. Senior Russian government officials had been counting on higher oil prices to lift the country out of recession. Now, instead of a freeze in production this year, "we expect growth in production compared with 2015," Mr. Novak said. Angola, a member of the 13-nation Organization of the Petroleum Exporting Countries, is seeking financial aid from the International Monetary Fund as it prepares for a critical political transition. "The government of Angola is aware that the high reliance on the oil sector represents a vulnerability to the public finances and the economy more broadly," the finance ministry said this month. Azerbaijan, which relies on oil and gas exports for 75% of its revenues and supported the Doha talks, has also held talks with the IMF on a possible bailout. Nigeria, an OPEC member with inflation at nearly 13%, is holding talks with the World Bank to help it close a forecast $11 billion budget deficit this year. In Kazakhstan, where the government relies on oil for around half of its revenue, the IMF forecast GDP growth of 0.1% this year, compared with 1.2% in 2015 and 6% in 2013 before oil prices started falling. Meanwhile, vulnerable oil producers are starting to pump less petroleum because they lack money to make investments in the energy sector. Venezuelan crude production is down by 46,000 barrels a day in March compared with its 2014 average. In Nigeria, a new wave of sabotage has taken 189,000 barrels a day offlinein the period. Kazakhstan's oil output is expected to decline this year for the third year in a row because of spending cuts and delays in launching output at the giant Kashagan oil field. Azerbaijan's production is also expected to fall this year, mostly because of declines at the BP PLC-operated ACG oil field. In contrast, Saudi Arabia is in a better position to ride out low prices. The kingdom still held foreign reserves worth $582 billion as of late February, according to the IMF, and plans to set up a sovereign fund worth $2 trillion. The kingdom also has the ability to boost production by two million barrels a day at will, according to the International Energy Agency, the bulk of the world's available spare production capacity. The Saudis had signaled they were ready to make a deal in Doha over the weekend. The plans changed at the last minute, a day after Deputy Crown Prince Mohammed bin Salman told Bloomberg that the kingdom wouldn't make a deal unless Iran also constrained its production. Iran and Saudi Arabia are longtime rivals for power and influence in the Middle East. A Persian Gulf oil official familiar with Saudi thinking said the kingdom's oil officials are "well aware that they have lost their credibility." "But the kingdom is not totally shutting the door on further cooperation in the future," the official said, noting there could be renewed talks on oil production "when the picture in the market is clearer." Credit: By Benoit Faucon, Selina Williams and Summer Said
Subject: Crude oil prices; Energy industry; Economic impact; Petroleum production
Location: Angola Venezuela Russia Saudi Arabia
Classification: 8510: Petroleum industry; 1210: Politics & political behavior; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.10
Publication year: 2016
Publication date: Apr 20, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782069800
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782069800?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Finance: Oil-Supply Outages Spark Scramble
Author: Faucon, Benoit; Said, Summer; Williams, Selina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Apr 2016: C.3.
Abstract:
In Nigeria, another OPEC member, Italy's Eni SpA said Tuesday it resumed pumping its Brass River crude in the Niger Delta, whose output normally is about 140,000 barrels a day.The production had been disrupted after a pipeline caught fire in an area where oil theft is frequent.
Full text: LONDON -- Oil-producing governments across the world are scrambling to address petroleum outages that have taken nearly 2 million barrels a day off the market and sent crude prices rallying. The outages have been caused by an oil-worker strike in Kuwait, alleged pipeline sabotage in Nigeria and payment disputes in Iraqi Kurdistan. The missing oil supply -- about 1.85 million barrels a day -- has essentially brought the oil market's supplies back into balance with demand, if only temporarily, and raised questions about big producers' ability to quickly ramp up during supply outages. The situation offers a glimpse of what the oil market would look like if the current glut were to end after nearly two years of weighing on prices. Oil demand is expected to average 94.8 million barrels a day in the first quarter of 2016, compared with oil supply of 96.4 million barrels a day. U.S. crude prices rose 3.3% Tuesday to $41.08 on the New York Mercantile Exchange. The rally occurred just two days after big oil producers failed to reach a deal in Qatar to limit production, a development that initially sent prices down until traders noticed the supply shortages. "This . . . is telling us that the oil market is more in balance than widely assumed," said Bjarne Schieldrop, chief commodities analyst at SEB, a leading Nordic corporate bank. Oil-producing governments said they were working to resume pumping as soon as possible. In Kuwait, where oil workers upset over apparent pay cuts and plans to privatize parts of the energy industry went on strike last weekend, the government has threatened the strikers with legal action. The military reportedly has taken over some production sites and reopened them after workers disabled them. State-run Kuwait National Petroleum Co. regrouped staff at its most critical production sites and got output back up to 1.5 million barrels a day, Chief Executive Mohammad Al-Mutairi told state-run news agency KUNA on Monday. That is still only about half of the previous level of 2.8 million barrels a day reported by the member of the Organization of the Petroleum Exporting Countries. The Kuwaiti oil company has been authorized to recruit contractors from abroad to operate some of its facilities. In Nigeria, another OPEC member, Italy's Eni SpA said Tuesday it resumed pumping its Brass River crude in the Niger Delta, whose output normally is about 140,000 barrels a day.The production had been disrupted after a pipeline caught fire in an area where oil theft is frequent. About 300,000 barrels a day of Nigerian crude were still offline, according to Nigerian news accounts, because of a late February oil spill at a terminal run by a Royal Dutch Shell PLC joint venture. Shell confirmed the outage but declined to comment further. In Iraq, the central government has said it stopped pumping about 150,000 barrels a day in March from the giant Kirkuk fields in the north into the main export pipeline following a dispute with an autonomous Kurdish authority that controls the pipeline transporting the oil. The disruptions come as oil supplies outside OPEC are set to decline this year by an estimated 700,000 barrels a day, driven by a slump in U.S. shale-oil production. At the same time, several of OPEC's members are pumping at capacity, reducing the cartel's ability to ramp up production when there is a shortage of crude. Credit: By Benoit Faucon, Summer Said and Selina Williams
Subject: Pipelines; Petroleum industry; Price increases; Petroleum production; Crude oil prices
Location: United States--US
Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: Kuwait National Petroleum; NAICS: 324110
Classification: 8510: Petroleum industry; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: Apr 20, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782070191
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782070191?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Colombian Oil Producer Falls From Grace --- Pacific's restructuring would mark reversal of fortune for company that stood at vanguard of continent's oil boom
Author: Sara Schaefer Munoz; Anatoly Kurmanaev; Sara Schaefer Munoz; Kurmanaev, Anatoly
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Apr 2016: B.6.
Abstract:
Latin America's largest privately owned oil producer said it was preparing to file for bankruptcy-court protection after reaching a tentative restructuring deal Monday that leaves shareholders with cents on the dollar.
Full text: BOGOTA, Colombia -- Latin America's largest privately owned oil producer said it was preparing to file for bankruptcy-court protection after reaching a tentative restructuring deal Monday that leaves shareholders with cents on the dollar. The deal would cap a humbling turn of events for Pacific Exploration & Production Corp., which once stood at the vanguard of South America's oil boom. At its peak earlier this decade, Pacific was worth $8 billion, employed 30,000 people and had so much cash it flew pop star Marc Anthony to a corporate party. Pacific has become a major bust from the global commodity downturn, a slide that current and former directors and employees say was aggravated by mismanagement, wild overspending and poor investments. "Pacific was a big success story, but it didn't make the right choices," said Nathan Piper, an analyst at RBC Capital Markets. "It didn't have to be in the situation it's in today." Pacific spokesman Tom Becker said management made investment decisions based on the best available information at the time. The restructuring agreed with Canadian hedge fund The Catalyst Capital Group Inc. on Monday would inject $500 million and cut $5 billion of the company's debt, at the cost of wiping out equity holders. The deal now needs to be approved by two-thirds of the bondholders. Founded by Venezuelan oil and mining executives who had fled their country's socialist government, the scrappy startup grew to become Colombia's second-largest company, after state-controlled Ecopetrol SA, and helped transform the country into the continent's third largest producer. In 2012, Colombian magazine Dinero featured the management team on its cover, with the headline "The Magic of Pacific." Pacific's highly visible executives, Serafino Iacono and Ronald Pantin, flew in private jets and built sprawling country houses. Pacific sponsored the national soccer team, an annual PGA Golf Championship and in 2013, congress gave Mr. Iacono the prestigious Order of Democracy award for his business activities. Money flowed in, and right out. The firm made nearly a dozen acquisitions, branching into natural gas and infrastructure, among them a 35% stake in the ODL oil pipeline and a 41.6% stake in the city of Cartagena's $600 million new port, which the company said helped it grow and decrease operating costs. But analysts and employees say the company's spending spree -- especially the cash acquisition of oil explorer Petrominerales Ltd. in 2014 for $909 million -- racked up an unsustainable $5 billion in debt. "We had huge overhang just as times turned bad," said a former executive, who said the firm's directors took out more loans to pay for Petrominerales instead of more prudently paying in shares. Even then, investors were willing to pile in. Mexican conglomerate Grupo Industrial Alfa SAB boosted a small stake to 19% of the company in 2014 for $1 billion. Analysts also say that Pacific overstated reserves, inflating demand for its debt and shares long after the price of crude had fallen and production became less profitable. Mr. Becker, the Pacific spokesman, said the company hired independent third-party reserves analysts in accordance with securities laws. The company tasked to calculate Pacific's reserves, Canada-based Petrotech Engineering Ltd., said in 2013 that the company had more than 30 million barrels of proven reserves in its CPE-6 block in Colombia's eastern plains, even as the owner of the other half of the block, Canada's Talisman Energy Inc., said its own reserve calculations for CPE-6 were zero. In an interview, Petrotech founder John Yu said he based his calculations on several factors allowed under Canadian law, including an estimated future oil price that was higher than what it turned out to be. People inside and outside the company said Pacific directors based their 2015 budget on $80 per barrel oil when the futures market was already pricing in a further fall. Mr. Becker said management "immediately began to cut costs and budgets to reflect the new oil price reality" in late 2014. As Pacific's woes piled on in early 2015, a group of young Venezuelans investors saw an opportunity to snatch the company on the cheap, giving them a vehicle to expand into the massive oil sector back home. They racked up a nearly 20% stake in the company for $290 million. Those investors, grouped in investment vehicle O'Hara Administration Co., are led by electricity contractor Alejandro Betancourt, whose company Derwick Associates has been investigated by U.S. authorities for bribery. A Derwick spokesman said the investigation was suspended after the Justice Department reviewed its bank accounts. The Justice Department declined to comment on the status of the investigation. Just days after O'Hara upped its stake, Mexico's Alfa and U.S.-based partner Harbour Energy Ltd. offered to buy Pacific for a high of 6.50 Canadian dollars (US$5.1) a share -- Pacific is also listed in Toronto -- to use the company in Mexico's new oil auctions. But new Venezuelan shareholders blocked the offer, hoping to gain control of the company themselves. The Alfa bid for Pacific was "a miracle" amid low world oil prices, said Ian MacQueen, analyst at Paradigm Capital. "It was also [unbelievable] that the bid was turned down." When the deal failed, Pacific's shares plummeted 45% further, to C$2.85 on the Toronto stock exchange. As prices of crude continued to sink, so did the share price, and the O'Hara group lost 70% of their initial investment. Now O'Hara, and the rest of Pacific's shareholders, could face a total wipeout if the restructuring deal is approved. Top management, however, will be able to own up to 10% of the restructured company's shares under the incentive plan offered by Catalyst. Credit: By Sara Schaefer Munoz and Anatoly Kurmanaev
Subject: Energy economics; Debt restructuring; Crude oil prices
Location: Colombia
Company / organization: Name: Petrominerales Ltd; NAICS: 211111; Name: Pacific Exploration & Production Corp; NAICS: 211111
Classification: 8510: Petroleum industry; 3100: Capital & debt management; 9173: Latin America
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2016
Publication date: Apr 20, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782070417
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782070417?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Dutch Court Quashes $50 Billion Award to Former Yukos Owners; Yukos was once Russia's largest oil company before the arrest of Mikhail Khodorkovsky
Author: Maarten van Tartwijk
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
Once Russia's largest oil company, Yukos was hit with tens of billions of dollars in back-tax claims starting in 2004, and its main assets were sold off to state-controlled Russian companies.
Full text: AMSTERDAM--A court in the Netherlands on Wednesday handed Russia victory by quashing a $50 billion compensation claim awarded to the shareholders of the now-defunct oil company Yukos. The court in The Hague overturned a decision of an arbitration tribunal in 2014 that Russia should pay shareholders $50 billion in compensation for unlawfully dismantling the firm. It represents a victory for Russia, which had disputed the ruling and claimed the Yukos case was a domestic issue and purely a matter of tax evasion. Russia's Finance Minister Anton Siluanov said the ruling removes the legal basis for seizures of Russian assets by Western authorities as part of efforts to enforce the arbitration judgment. "It is a just decision," said Mr. Siluanov. "We never had any doubts that this [decision] would follow." The Dutch court rejected the arbitration judgment largely for procedural reasons. It said the tribunal, which acted under the Permanent Court of Arbitration in The Hague, lacked jurisdiction to rule on the matter because the case was brought under the Energy Charter Treaty, which was signed but never ratified by Russia. The arbitrators were "therefore wrong to declare themselves competent," it said. The court was authorized to rule because the arbitration decision was made in The Hague. Once Russia's largest oil company, Yukos was hit with tens of billions of dollars in back-tax claims starting in 2004, and its main assets were sold off to state-controlled Russian companies. The dismantling of the company was widely viewed as the Kremlin's effort to crush Mikhail Khodorkovsky, the company's politically ambitious chief executive officer and main shareholder. He served more than 10 years in jail for fraud and tax evasion before being released in 2013 . The arbitration tribunal said in 2014 that Yukos was the object of a "series of politically motivated attacks by the Russian authorities that eventually led to its destruction." The former Yukos shareholders who launched the arbitration proceedings said they would challenge the ruling with the Dutch Court of Appeals. "We fully stand by the unanimous award received in 2014 for the politically motivated destruction of Yukos," said Tim Osborne, a director of GML Ltd., a vehicle that indirectly held a majority stake in Yukos. "[We] have full faith that the rule of law and justice will ultimately prevail." The shareholders also said they would continue their efforts to seize Russian assets and that proceedings to enforce the arbitration ruling in countries like the U.S., the U.K., and Germany are ongoing. Marnix Leijten, a lawyer who represented the shareholders in the Dutch proceedings, said "each court has the discretion to stay the proceeding or move on" with regard to Wednesday's judgment. Last year, Russia threatened retaliation against European state-controlled companies after Belgium and France froze some Russian assets at the behest of Yukos shareholders. Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com Credit: By Maarten van Tartwijk
Subject: Arbitration; Tax evasion; Litigation
Location: Russia Netherlands
People: Siluanov, Anton
Company / organization: Name: Permanent Court of Arbitration; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782090514
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782090514?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Kuwait Oil Workers End Strike; Three-day walkout ends after crude output falls by almost half
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
The industrial action came at a sensitive time, with oil prices at levels more than 60% off their peak two years ago and countries like Kuwait competing for oil buyers in a fierce contest for market share.
Full text: Oil workers in Kuwait have ended a three-day strike that had almost halved crude output in the Organization of the Petroleum Exporting Countries' fourth-largest producer, after the government said it wouldn't negotiate while the walkout lasted. Workers resumed their jobs earlier Wednesday "out of respect for the country's emir" after successfully showing the importance of their role in the economy, the oil-workers union said in a news release. The move came just hours after Kuwait's acting oil minister, Anas al-Saleh, ruled out negotiations with the employees until they ended their strike and said the country's oil sector would continue to operate despite the strikes. "The goal in going on strike was to send a clear message," the Union of Petroleum and Petrochemical Workers said in the statement. "The workers reiterated in their action their role" in the economy, the union said. The workers went on strike last weekend to protest apparent pay cuts and plans to privatize parts of the energy industry. The government has threatened the strikers with legal action, but union leaders had previously said that workers would hold out until planned public-sector pay cuts were canceled. The strikes started Sunday and caused Kuwait's oil production to plummet to 1.1 million barrels a day, from 2.8 million barrels a day. The industrial action came at a sensitive time, with oil prices at levels more than 60% off their peak two years ago and countries like Kuwait competing for oil buyers in a fierce contest for market share. By Tuesday, Kuwait's crude output recovered slightly to 1.5 million barrels a day as state oil firm Kuwait Petroleum Corp. brought more production back online, the oil industry's spokesman, Sheikh Talal Al-Khaled Al-Sabah, said in a post on Instagram. Mr. Sabah said on Wednesday that output in the country will recover gradually to 3 million barrels a day in the next three days. Write to Summer Said at summer.said@wsj.com summer.said@wsj.com Credit: By Summer Said
Subject: Strikes; Petroleum production
Location: Kuwait
Company / organization: Name: Kuwait Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782109970
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782109970?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Rallies as Distillate Stockpiles Shrink; Total oil and products stockpiles shrink for only sixth time in 24 weeks
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
The change in U.S. stockpiles was barely positive but may be enough to keep fueling a rebound in investor interest in commodities, said Todd Garner, managing partner at hedge fund Protec Energy Partners LLC in Boca Raton, Fla. Related * Oil's Rise Greases Stocks * Streetwise: What's 'Magic Number' for Oil Price? * Heard: Oil Shocker: Bulging Inventory Beats Scary Headlines The concern about oversupply is still strong and had sent oil prices tumbling in early trading Wednesday.
Full text: Oil prices surged to a five-month high Wednesday after an unexpected drop in U.S. distillate stockpiles persuaded traders to shrug off a rising crude surplus and the end of a Kuwaiti oil-workers' strike . Distillate stocks, which include heating oil and diesel, fell by nearly 3.6 million barrels last week, when analysts expected no change. It was enough to balance out an addition to crude stockpiles and send total oil and petroleum stockpiles lower--though barely--for only the sixth time in 24 weeks dating back to the start of November. Diesel rallied the most on the news, gaining 5.5% for the day and ending at its highest price since Dec. 4. U.S. oil ended the day up 3.8%, but the rally was actually much stronger, having started from losses that had been as deep as 3% in overnight trading. The combined stockpiles of crude, gasoline and other petroleum products have become a key indicator for many analysts and traders. Production is retreating from record highs in the U.S., but stockpiles there and around the globe are still at their highest ever. Prices are unlikely to rebound until those massive stockpiles start to drain, signaling that a glut that has lingered for two years is finally about to ease, analysts and traders have said. The change in U.S. stockpiles was barely positive but may be enough to keep fueling a rebound in investor interest in commodities, said Todd Garner, managing partner at hedge fund Protec Energy Partners LLC in Boca Raton, Fla. Commodities from natural gas to gold have rallied in recent weeks as investors have started betting that a weaker dollar and slower production make these markets more likely to come into balance than in past years. "It's not the quantity. It's the perception," said Mr. Garner, who manages $100 million in assets. "Slowly but surely--and I do mean slowly--the fundamental picture has gotten a little better. And it keeps getting just a little better." Related * Oil's Rise Greases Stocks * Streetwise: What's 'Magic Number' for Oil Price? * Heard: Oil Shocker: Bulging Inventory Beats Scary Headlines The concern about oversupply is still strong and had sent oil prices tumbling in early trading Wednesday. The American Petroleum Institute reported late Tuesday that U.S. crude stocks grew by about 3.1 million barrels last week. The end of the strike in Kuwait could also increase global supply by nearly another 2 million barrels. But prices started to rally immediately after the U.S. Energy Information Administration's midmorning release of stockpile data. Light, sweet crude for May delivery settled up $1.55 at $42.63 a barrel on the New York Mercantile Exchange. The May contract expired at settlement. The more actively traded June contract gained $1.71, or 4%, to $44.18 a barrel. Brent, the global benchmark, ended $1.77, or 4%, higher at $45.80 a barrel on ICE Futures Europe. Like U.S. oil, it was Brent's highest settlement since Nov. 25. "The market managed to turn on a dime on a day when so many other things were pointing in the other direction," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "The bulls got it by the leg right now." Oil has been on one of its strongest rallies in years since Feb. 11 when it closed at a nearly 16-year low. Many have been speculating the market is primed for a rebound from 16-year lows as producers slow their drilling and cut their spending around the world, potentially creating serious supply shortfalls sometime between late 2016 and 2018. A large drop in diesel stockpiles may also be a sign an improving economy is helping the oil market, which would give it broader support, said Gene McGillian, an analyst at Tradition Energy. Diesel is often used to fuel heavy equipment, which typically run more in a period of healthy economic development. Diesel settled up 6.9 cents at $1.3322 a gallon. The drawdown in distillate stocks balanced out the 2.1 million-barrel addition to crude stockpiles. It brought total commercial stockpiles of crude and oil products down by 400,000 barrels, according to the EIA. "The way the market seems to want to pick out the bullish factors in all the news, this could be enough to give it support," Mr. McGillian said. "But I'm a little reluctant to get all bulled-up." Many have said the strike in Kuwait had been giving the market only temporary support earlier this week. The strike reduced the country's daily production from 3 million barrels to about 1.1 million barrels. This was helping to tighten the physical crude market, along with other supply disruptions in northern Iraq, Nigeria and the North Sea. Those had cut global output by 750,000 barrels a day, about half the rate of estimated global supply growth. The end of the strike "removes one of the key supports that allowed prices to recover easily after the disappointing outcome of the Doha talks ," said Tim Evans, an analyst from Citi Futures. Many still, however, expect massive budget cuts to help rebalance the market later this year. And that has also limited the post-Doha selloff, analysts said. "A lasting reduction in the oversupply can be expected in the second half of the year thanks to a combination of declining U.S. oil production and seasonally stronger demand," Commerzbank said in a note. Gasoline for May gained 1.8% to settle at $1.5068 a gallon, the weakest performer in the oil complex Wednesday. Stockpiles fell by 110,000 barrels last week, compared with analysts' expectations of a 1.5 million-barrel drop. Mirian Malek and Jenny Hsu contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Stocks; Crude oil prices; Supply & demand
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782135851
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782135851?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Russia Energy Minister Unsure OPEC Will Agree to Freeze Oil Output; The need to do so might also decrease in the coming months, Alexander Novak said
Author: Mills, Laura
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
MOSCOW--Russian Energy Minister Alexander Novak told news agencies Wednesday that he wasn't sure oil-producing countries would be able to reach a deal to freeze production, but that the need to do so might decrease in the coming months.
Full text: MOSCOW--Russian Energy Minister Alexander Novak told news agencies Wednesday that he wasn't sure oil-producing countries would be able to reach a deal to freeze production, but that the need to do so might decrease in the coming months. "I wouldn't say now that we are sure they will be able to agree among themselves, because there are very diverse positions," Mr. Novak said. He cautioned against dubbing the inconclusive meeting with the Organization of the Petroleum Exporting Countries in Doha last week a failure, but said Saudi Arabia had been "unauthorized" to change its position at the last minute. Mr. Novak said that Russia didn't have plans to meet separately with his counterparts from Iran or Saudi Arabia in the coming month and had not yet received an invitation to OPEC talks slated for June. He said that the need to freeze production was likely to fall in the coming months. "Market factors will play their role and the balance of demand and supply will change," he said. "I don't exclude that by June it (a production freeze) will be irrelevant." He said that Russia's own production could reach between 540 million and 544 million tons this year, despite statements last week that production in 2016 and 2017 would remain flat at 537 million tons. Write to Laura Mills at laura.mills@wsj.com Credit: By Laura Mills
Subject: Price increases
Location: Russia Iran Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782196760
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782196760?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Equity Lines Are King in Q1 Oil And Gas Deals
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
Equity Lines Are King in Q1 Oil And Gas Deals Private equity firms have learned the hard way from the energy price slump that debt and oil don't mix well.
Full text: This is a preview newsletter. Your service will be upgraded on April 26, 2016 to WSJ PRO PRIVATE EQUITY . This email is an early preview of the new newsletter that will replace your current newsletter from Dow Jones LBO Wire and Dow Jones Private Equity Analyst. If you have any questions or suggestions please do not hesitate to contact our dedicated customer service team at 1-877-891-2182 or wsjprosupport@dowjones.com and we will be happy to assist you. Equity Lines Are King in Q1 Oil And Gas Deals Private equity firms have learned the hard way from the energy price slump that debt and oil don't mix well. Energy Future Holding and Samson Resources are two examples that quickly come to mind. Firms seemed to have taken lessons they learned to heart. A new report from accounting and consulting firm PricewaterhouseCooper shows that nine of 10 private equity deals in the oil and gas sector during the first quarter took the form of equity infusions as opposed to outright acquisitions with their usual debt accompaniment, as we reported in this morning's newsletter. Committing equity to back experienced executives who then seek acquisition targets is a time-tested approach by energy investors. Compared with debt-financed buyouts, these deal structures allow an equity commitment to be drawn down over time, instead of being funded up front, potentially reducing the capital at risk at a given moment, particularly early in the investment's life. It also gives the financial sponsor the option to veto any investments that they deem too risky or slow deployment of the money when good deals are scarce. Of course, even if private equity firms want to load up their oil and gas deals with debt, fewer of them are able to do so, due to debt market constraints, particularly for bank loans. Banks, which have taken a hit in their oil and gas loan portfolios, are under greater pressure from banking regulators to rein in risky loans. For now, at least, equity may be the best game in town. WEDNESDAY, APR 20 -- Oregon Investment Council THURSDAY, APR 21 -- District of Columbia Retirement Board THURSDAY, APR 21 -- New Mexico Educational Retirement Board Send us your tips, suggestions and feedback. Write to: Yolanda Bobeldijk ; Laura Cooper ; Chris Cumming ; Shasha Dai ; Braden Kelner ; Laura Kreutzer ; Dawn Lim ; William Louch ; Mike Lucas ; Amy Or ; Becky Pritchard ; David Smagalla ; Chitra Vemuri . Follow us on Twitter: @YEBobeldijk , @LCooperReports , @ShashaDai1 , @bradenkelner , @LauraKreutzer , @dawnlim , @william_louch , @Lucastoons , @beckspritchard , @DSmagall_DJ
Subject: Private equity; Acquisitions & mergers; Venture capital companies; Equity; Newsletters
Company / organization: Name: District of Columbia Retirement Board; NAICS: 525110; Name: Oregon Investment Council; NAICS: 921130, 525110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782212184
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782212184?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil and Gas Deal Activity Down During First Quarter
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
"Lack of financing and the number of debt obligations coming due in the next six months could increase the number of distressed businesses and as a result, opportunities for financial investors," PwC said. http://www.pwc.com/energy Write to Shasha Dai at asknewswires@wsj.com Credit: By Shasha Dai
Full text: The prolonged slump in oil and gas prices has dampened deal activity in the sector, with value of transactions down 19% during the first quarter over the year-earlier period, according to PricewaterhouseCoopers LLP. For the first three months of 2016, 39 oil and gas deals totaling $28 billion were announced, down 19% from $34.4 billion across 39 deals a year earlier, said the accounting and consulting firm. Factors that hampered deal activity include constrained cash flow and overlevered balance sheets, PwC said. Meanwhile, companies with stronger balance sheets are better positioned for a market recovery and therefore are more actively pursuing mergers or acquisitions as ways to expand, PwC added. Financial investors including private equity firms accounted for 10 of the 39 deals this past quarter, representing a 50% decline in deal value over the year-earlier period. Of the 10 deals, nine were in the form of equity commitment, as opposed to outright purchases. "Continued commodity price volatility and turbulent financing markets put a damper on the ability for private equity sponsors to invest capital," according to the report. The current environment, however, presents distressed investment opportunity. "Lack of financing and the number of debt obligations coming due in the next six months could increase the number of distressed businesses and as a result, opportunities for financial investors," PwC said. http://www.pwc.com/energy Write to Shasha Dai at asknewswires@wsj.com Credit: By Shasha Dai
Subject: Acquisitions & mergers; Balance sheets; Equity; Private equity
Company / organization: Name: PricewaterhouseCoopers LLP; NAICS: 541211, 541611
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782246289
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782246289?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Government Bond Yields Rise With Oil Prices; Investors seen shifting into stocks on Wednesday
Author: Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
[...]fed-fund futures, used by investors and traders to place bets on central bank policy, still show only a 21% likelihood of a rate increase from the Fed at its June 2016 policy meeting, according to data from CME Group.
Full text: U.S. government bond prices weakened on Wednesday, as a jump in oil prices led investors to favor riskier assets. The yield on the benchmark 10-year Treasury note settled at 1.852%, compared with 1.783% on Tuesday, marking its largest one-day gain since March 1. Yields rise when bond prices fall. In recent months, oil prices have been taken as a proxy for the health of the global economy, with stock prices climbing when those of commodities rise and falling when they drop. Investors on Wednesday were seen moving out of bonds and into stocks. Although Treasurys spent much of the morning treading water, yields later jumped in concert with oil prices, outpacing a similar move by the S&P 500 stock index, said Mark Cabana, U.S. rates strategist at Bank of America Merrill Lynch in New York. After failing to rise as much as stock prices earlier in the week, government bond yields are playing "a little bit of catch up," he said. Before Wednesday's sudden increase, the yield on the 10-year U.S. government bond had barely budged over several days, hovering just below the 1.8% level to which it has hewed for more than two months. Analysts say several factors are keeping U.S. bonds where they are. Subdued inflation, aggressive monetary-stimulus programs overseas and signals from the Federal Reserve that it is no hurry to raise interest rates all make Treasurys look attractive to investors. Yet easing concerns about the global economy, rising equities prices and the occasional warning from Fed officials about complacency are simultaneously bolstering yields. "Investors were very concerned that the global economy was going into a recession, and we've learned subsequently that the global economy is not crashing," said Andrew Wilkinson, chief market analyst at Interactive Brokers. Still, "there's a very strong message coming from the Fed that interest rates will be lower for longer," he said. This week, the disconnect between stocks and bonds became stark, as the Dow Jones Industrial Average closed above 18000 for the first time since July, while the 10-year Treasury yield traded at less than 0.4 percentage point from its record closing low, set in the summer of 2012. A concern for bond buyers is that the diverging course of stocks and bonds could presage a large selloff of Treasurys, which may have been previewed on Wednesday. But history suggests the gap between the two assets may need to get wider before that happens, Mr. Cabana said. Federal Reserve Bank of Boston President Eric Rosengren said late on Monday that traders and investors are seriously underestimating how many rate rises the U.S. central bank is likely to deliver over the next few years. But fed-fund futures, used by investors and traders to place bets on central bank policy, still show only a 21% likelihood of a rate increase from the Fed at its June 2016 policy meeting, according to data from CME Group. Corporate bond sales have also picked up recently, as companies take advantage of low yields to lock in favorable funding costs. And Argentina's first bond sale since its default in 2001 drew strong demand, underscoring the appetite from investors for riskier forms of debt. An influx of corporate and sovereign bonds often leads investors to lighten up on Treasurys, though selling before Wednesday was muffled by buyers taking advantage of cheaper prices, analysts said. Write to Sam Goldfarb at sam.goldfarb@wsj.com Credit: By Sam Goldfarb
Subject: Interest rates; Central banks; Stocks; Dow Jones averages; Treasuries
Location: United States--US
People: Rosengren, Eric
Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782246381
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782246381?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Expat Oil Workers Fall on Hard Times; Amid the energy market's slump, some immigrants find themselves jobless, far from home
Author: Dawson, Chester; Vyas, Kejal
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract: None available.
Full text: After immigrating to Canada from Venezuela in 2005, petroleum engineer Humberto Romero received three job offers within a month of completing a church-affiliated orientation program. But since getting laid off last April by his longtime employer, he has been unable to find a new job in Canada, and says he can't go home because of the economic and political crisis there. "I thought I'd get another job in three months, but it's been nine months and I've only had a couple of interviews," said Mr. Romero, who is 52 years old and married with two teenage children. He was let go from Husky Energy Inc. after a decade with the Calgary-based company. "The competition is really intense for the few jobs available," he said. Amid the energy industry's deepest retrenchment in two decades, some oil-and-gas workers who followed the energy boom of the last decade in search of better opportunities are finding themselves jobless and far from home. The oil-price collapse has led energy producers to lay off more than 300,000 workers world-wide, according to Houston consultant Graves & Co. Few countries likely have produced as many out-of-work energy professionals seeking opportunities abroad as Venezuela, and now many of these expatriates are caught between job losses overseas and economic chaos in their homeland. Thousands of oil workers, many of whom are alumni of the country's state-run oil company Petróleos de Venezuela SA, or PdVSA, fled the country, mostly after a strike between 2002 and 2003 that aimed to depose late President Hugo Chávez. The leftist leader fired 19,000 workers who had supported his ouster--nearly half of PdVSA's labor force at the time--with the stroke of a pen. Caracas-based alumni group Petroleum People estimates three out of four of those fired workers, who were mostly engineers and midlevel managers, left for jobs in Mexico, Argentina, Colombia and the Middle East, as well as the U.S. and Canada. Since then, thousands more have departed, including mechanics and technicians with more than two decades of experience, said Venezuelan oil union leader Ivan Freites. The western Canadian province of Alberta, which faced a chronic shortage of trained workers during a decade of booming investment in its oil sands, proved a major draw for Venezuelan workers. Their familiarity with heavy oil in Venezuela's Orinoco basin, similar to oil sands' extra-heavy crude, made them highly sought-after by Canadian producers. Venezuela ranked as one of the top 10 sources of immigrants to Alberta in the mid-2000s, when it accepted hundreds of families a year, according to provincial labor data. Repatriating isn't an option. The South American nation's economy is in shambles, jobs are scarce and fear of political oppression widespread. The International Monetary Fund estimates Venezuela's economy, which counts on oil for nearly all of its exports, will shrink by 8% this year after a 5.7% contraction in 2015. More than 100 professionals leave the local industry monthly as the economic situation deteriorates in the county, Mr. Freites estimates. Francia Galea, a former engineer at PdVSA's once prestigious research arm Intevep, has been working in Kuwait for the past four years and says she has no intention of returning. Instead, the 64-year old plans to move to the U.S. where she will file for political asylum. "What would I do in Venezuela? There's no work, there's no medicine, there's high crime," she said. "It's almost a refugee status that we're in." The spread of Venezuela's exiled workers around the world points to how the oil industry became globalized. "The oil industry is probably the most mobile industry" for workers, especially those with specialties such as deep-water or unconventional extraction, said Neil Gascoigne, a Houston-based global manager for Hays Specialist Recruitment LLC. "There's been plenty of opportunity to ply your trade all around the world." Trained energy professionals were in high demand--particularly in emerging energy-production centers such as Canada and the U.S.--before oil prices started a precipitous slide in mid-2014. Since then, jobs for expatriates have "kind of been shut down to those in only the most central roles," said Peter Clarke, the New York-based head of PricewaterhouseCoopers LLP's global mobility practice. "Some of these people have become nomads" in search of work. In Norway's west coast oil patch, many Eastern European workers have been left without jobs as local activity slows. During the years of booming oil investment up until 2014, many Eastern Europeans--notably from Poland and the Baltic countries--were attracted to the area. Many in Calgary's Venezuelan community say they and their families have put down roots, and are trying to find ways to stay in Canada, even if oil-patch jobs are difficult to come by. Gerson Charmell, a 52-year old supply-chain expert with an M.B.A. who immigrated to Canada from Venezuela with his family in 2006, was laid off from ConocoPhillips's Canadian unit in February 2015 and has since struggled to find work and pay the bills. His first grandchild--a Canadian citizen--was born last year to one of his two sons, both of whom were educated in Alberta and are employed outside the energy industry. "I am downsizing my home to try to stay in Canada," Mr. Charmell said. The Venezuelan Canadian Association of Calgary, a nonprofit group set up in 2000 originally to raise funds for victims of a devastating flood, recently began holding resume-writing seminars last fall to help newly unemployed members find employment. PdVSA veteran Lorenzo Hernandez, who immigrated to Canada in 2004 but lost his job at Royal Dutch Shell PLC's Canadian subsidiary last August, said he is volunteering more with the expatriate group. "The good thing about being laid off is that it has given me a chance to provide additional support to the community," he said. Write to Chester Dawson at chester.dawson@wsj.com and Kejal Vyas at kejal.vyas@wsj.com Credit: By Chester Dawson and Kejal Vyas
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782281229
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782281229?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Shocker: Bulging Inventory Beats Scary Headlines; Oil price shocks need to be huge to have similar price impact to those of yesteryear given a big rise in global crude inventory
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
Since the first global oil crisis during the 1973 Arab Oil Embargo, governments, notably the U.S., built strategic reserves.
Full text: What happens in Doha stays in Doha. The only shocker from last weekend's summit of major oil exporters in Qatar's capital was how emphatically Saudi Arabia rejected an output freeze without Iran's participation . Indeed, oil prices made up their 6% postmeeting plunge within a matter of hours with the help of an actual surprise: A strike by oil workers in Kuwait cut its output by a meaningful 1.7 million barrels a day. Naturally, oil prices then went into reverse on Tuesday evening U.S. time when the strike was lifted, but even that headline wore off quickly. By midday Wednesday, prices had resumed their climb. Oil supply shocks just aren't what they used to be. There is a good reason for that: a world awash in petroleum. The developed world alone has well over 3 billion barrels of commercial crude and refined-product inventory on hand, according to the International Energy Agency. And supply still slightly exceeds daily demand of 96.8 million barrels of crude. One way to gauge the magnitude of an output shock is how large it is relative to inventory, not just consumption. Since the first global oil crisis during the 1973 Arab Oil Embargo, governments, notably the U.S., built strategic reserves. Yet, while one existed by the time of the 1979 Iranian Revolution, prices still surged and gas lines became part of the landscape. Iran produced 5.3 million barrels a day in 1978 and just 1.32 million by 1981. Over just three years, then, the 3.5 billion Iranian barrels not produced amounted to a whopping eight times U.S. commercial and government inventory at the end of 1978. The next supply shock came from Kuwait after its invasion by Iraq in the summer of 1990. Between then and the end of 1991, by which time its output was returning to normal, its 600 million missing barrels were barely 60% of U.S. total inventories. By comparison, chaos following the Western-aided overthrow of Libyan strongman Moammar Gadhafi in 2011 has been more meaningful. Through the end of 2014 about 1.15 billion barrels--about equal to U.S. inventory in 2010--wasn't supplied. But not only that was an order of magnitude less than the Iranian Revolution, it came as U.S. shale supply was surging. Today, with U.S. inventories three times as high and U.S. oil consumption just 3% higher than in 1978, it would take the equivalent of two Kuwaits ceasing supply altogether for three years, not three days, to spark the same reaction. The message for oil bulls: Don't hold your breath. Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Subject: Supply & demand; Oil consumption; Inventory
Location: Iran Qatar United States--US Kuwait Saudi Arabia
People: Qaddafi, Muammar El
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 17822884 76
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782288476?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil's Rise Greases Stocks; Follow-on share offerings by energy companies find success as crude rebounds from a slump that started in 2014
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
Though stock prices often decline on such deals due to the addition of new shares, Callon's shares ended Wednesday up 12%, at $10, as the price of oil reached near a five-month high and U.S. energy shares broadly rallied on better-than-expected crude-supply data. Follow-on deals, in which already-public companies sell new stock, have boomed since oil prices started to plunge in late 2014, as companies have sought cash to pay down debt, keep rigs drilling and, in some cases, fund acquisitions.
Full text: Oil companies seeking cash have found a well that keeps producing: the stock market. Callon Petroleum Co., a small oil producer, has sold new shares three times in the past six months to raise cash, most recently in a successful sale Tuesday night. Though stock prices often decline on such deals due to the addition of new shares, Callon's shares ended Wednesday up 12%, at $10, as the price of oil reached near a five-month high and U.S. energy shares broadly rallied on better-than-expected crude-supply data. "Slowly but surely--and I do mean slowly--the fundamental picture has gotten a little better," said Todd Garner, managing partner at hedge fund Protec Energy Partners LLC. "And it keeps getting just a little better." Follow-on deals, in which already-public companies sell new stock, have boomed since oil prices started to plunge in late 2014, as companies have sought cash to pay down debt, keep rigs drilling and, in some cases, fund acquisitions. While the deals have been a success for some investors who bought in, particularly this year, the sales also have left many nursing losses as share prices fell along with oil prices over much of the past two years. Last year, North American exploration-and-production companies sold a record of roughly $18 billion in such deals, according to a Wall Street Journal analysis of Dealogic data and securities filings. The deals are ahead of that pace this year, raising about $12 billion through Wednesday, even as some companies that sold shares last year have sought bankruptcy protection , wiping out investors. Callon isn't the only North American energy producer to tap the stock market several times, nor was its offering on Tuesday particularly large. But its latest deal underscores the recovery in oil prices. On Sunday, talks in Doha, Qatar, between some of the world's top oil-producing countries, including Saudi Arabia and Russia, fell apart without any agreement to restrain output amid a global glut of crude. Inaction was widely expected to send oil prices falling, and they did briefly, but have since risen. On Wednesday, light, sweet crude for May delivery rose $1.55, or 3.8%, to settle at $42.63 a barrel on the New York Mercantile Exchange, its highest settlement price since Nov. 25. U.S. prices have risen 7.2% over the past two days--6.7% for the global benchmark, Brent--as signs emerge that the market is beginning to stabilize without the coordination of big producers. The U.S. Energy Information Administration said Wednesday that distillate stocks, which include heating oil and diesel, fell by nearly 3.6 million barrels. Analysts had expected no change. It was enough to balance out an addition to crude stockpiles and send total oil and petroleum inventories slightly lower. Callon said late Tuesday that it raised about $187 million before fees, selling 22 million new shares. Callon said it would use those proceeds, along with cash on hand and another 9.3 million shares, to pay for swaths of West Texas drilling land it has agreed to buy from multiple sellers. The stock deal Tuesday is Callon's fourth since oil prices started falling in the summer of 2014. With the series of sales, Callon, based in Natchez, Miss., has roughly tripled the number of its shares outstanding since September 2014. Typically, that boost would push the stock's price lower as earnings are spread among many more shares. But Callon's stock price hasn't suffered: Its shares are up 9.4% since the company announced the first of the four stock offerings. Callon didn't respond to a request for comment. Analysts said investors have been high on Callon for a few reasons, including low drilling costs, operations in some of the most prolific parts of the Permian Basin, manageable debt and relatively inexpensive stock. Neal Dingmann, an analyst for SunTrust Robinson Humphrey Inc., said investors have been willing to bet on Callon and other oil producers if the companies can reduce their debt or expand without borrowing more. "It seems like investors can swallow dilution easier than the leverage," Mr. Dingmann said. Callon, founded in 1950, embarked upon a fortuitous shift in strategy in 2009. Long a Gulf of Mexico producer, the company decided to move to onshore drilling and chose as its focus the Permian Basin in West Texas. The Permian Basin has become a rare redoubt for oil producers and their investors amid the collapse in commodity prices, as many wells there yield large-enough volumes of oil and gas to make them worth the expense of drilling even at low prices. The same can't be said for the Gulf of Mexico, where higher drilling costs have hammered smaller companies operating there. Last week, Energy XXI Ltd., one of the largest independent producers in the Gulf, said it had filed for chapter 11 bankruptcy protection. Timothy Puko contributed to this article. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Investments; Crude oil prices; Securities markets; Shareholder voting; Financial performance
Location: United States--US
Company / organization: Name: Callon Petroleum Co; NAICS: 211111; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782322844
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782322844?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Bank of Canada's Poloz Sees Three-Year Adjustment to Oil Price Drop; Central bank governor says that energy sector will play a smaller role in future growth
Author: Kim Mackrael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract:
Related * Canada's Poloz Cautious on Economy (Apr. 19) However, Mr. Poloz warned at the time that lower foreign demand and the recent rally in the Canadian dollar could limit growth of Canada's nonresource exports, which are expected to lead the country's economic recovery.
Full text: It could take more than three years for the Canadian economy to fully adjust to the sharp drop in global oil prices, Bank of Canada Governor Stephen Poloz said Wednesday. Speaking before a Senate committee, Mr. Poloz said Canada benefited from high oil prices in earlier years, prompting firms to invest heavily in the country's energy sector. Lower global commodity prices are now causing the energy sector to contract, contributing to weaker economic growth. "We estimate that it's sort of a three-year period while the negatives are still ongoing in the background and the positives are emerging in the foreground," Mr. Poloz said. He added that it could take longer than three years "before we're settled at that new place" where growth in the rest of the economy can make up for the relative decline in the energy sector. It was the central bank governor's second appearance before a parliamentary committee in two days. On Tuesday, he told another committee that weak commodity prices would continue to restrain Canada's growth and warned that the global economy could disappoint further. Last week, the Bank of Canada announced it was holding the key interest rate at 0.5% and raising its outlook for this year's economic growth. The central bank said new fiscal measures announced in the government's budget plan last month should help offset other economic headwinds. Related * Canada's Poloz Cautious on Economy (Apr. 19) However, Mr. Poloz warned at the time that lower foreign demand and the recent rally in the Canadian dollar could limit growth of Canada's nonresource exports, which are expected to lead the country's economic recovery. Canada lost thousands of manufacturing and other nonresource companies during the commodity price boom, Mr. Poloz said Wednesday. Higher energy prices helped lift the country's currency during that time, making it harder for many exporters to sell their products abroad. "The export recovery has been very hesitant, very gradual, in part because of the damage that was done during that period," Mr. Poloz said. The central bank governor added that it was natural for firms to invest heavily in oil at a time when prices for the commodity were rising quickly. "To under invest would be to say to the world, 'No, I don't want your money, I don't want you to pay a lot for my resources,'" he said. While the energy sector will remain an important part of Canada's economy, Mr. Poloz said, it will play a smaller role in future growth. Write to Kim Mackrael at kim.mackrael@wsj.com Credit: By Kim Mackrael
Subject: Central banks; Canadian dollar; Commodities; Prices; Congressional committees; Economic growth; Energy industry; Governors
Location: Canada
Company / organization: Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782322856
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782322856?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Ecuador Is Hard-Pressed to Pay for Earthquake Recovery; Disaster hits country already suffering from low oil prices and depleted reserves
Author: Sara Schaefer Muñoz; Ryan Dube; Sara Schaefer Muñoz; Dube, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Apr 2016: n/a.
Abstract: None available.
Full text: PEDERNALES, Ecuador--This coastal city of beach bars, seafood cafes and small hotels was one of Ecuador's success stories, transformed by the country's recent burst of economic growth from a rundown fishing village to a bustling tourist spot. Now, 80% of its structures lie in ruins as rescuers frantically search for corpses following Saturday's devastating magnitude-7.8 earthquake, which killed at least 525 people and injured more than 4,600 in Ecuador. In Pedernales, residents and officials say, all the recent progress has been erased. "Pedernales is starting from almost zero," said Mayor Gabriel Alcivar during a brief pause from touring the sweltering, debris-laden city Wednesday. "I'm not worried right now, but I'm worried about day 30, day 60, day 200, because people are without houses, and without work." Rebuilding homes, bridges and roads in places destroyed by the quake is expected to take years and cost billions of dollars, President Rafael Correa said Wednesday. That is money the country doesn't have as it faces a deep contraction due to the collapse in oil prices and sagging exports of bananas and flowers. "It is the worst moment to face such a catastrophe," said Maggie Barreiro, an economist at San Francisco University in Quito. "The fiscal accounts are empty, and we are having huge problems of liquidity." Ecuador, the smallest member of the Organization of the Petroleum Exporting Countries, has just $133 million in its treasury, one of the lowest levels in at least a decade, according to the central bank. International reserves at the start of the year had fallen to $2.3 billion from $4.2 billion in August, and external debt had doubled to over $27 billion since 2009, according to Observatorio Fiscal, a Quito-based organization that tracks government finances. The bleak scenario led the International Monetary Fund this month to project that the economy would contact 4.5% this year and 4.3% in 2017, the worst performances in South America after Venezuela. Adding to the challenge is Ecuador's lack of access to financing, which has mainly been restricted to multilateral lenders and China since Mr. Correa opted to default on the country's debt in 2008. "There won't be large investments of resources, a large injection of money or a cascade of private investments," said Vicente Albornoz, the dean of the business and economics faculty at Quito's Las Americas University. Officials have tried to stay confident about rebuilding, pointing out that key industrial infrastructure, including pipelines, refineries and dams, weren't destroyed. But Mr. Correa noted that the quake was the worst disaster in 70 years. "This isn't going to take three days or three months," the president said. "This is going to take years." The long road ahead wasn't lost on José Manuel López, who considered his future amid the rubble of a building his father built 30 years ago that housed his family and weight-lifting gym. He, his wife and their three young children were trapped in its collapse until freed by neighbors. Eight others were killed, including his 68-year-old mother. "We'll probably go to Quito, I have family there," he said while trying to salvage his weights. "But I'll have to start all over." South America's costliest quake in the last 35 years was the magnitude 8.8 that hit Chile in 2010, causing losses of $30 billion, according to Munich Re, the world's largest reinsurer. The immediate costs of this latest e disaster are expected to be covered by a $300 million government emergency fund and $600 million provided by multilateral lenders. "Ecuador will have to figure out a way to deal with this in the medium term because the effect of the fiscal constraint is going to exacerbate the challenge," said Alberto Rodríguez, the Ecuador director for the World Bank, which sent a team to assess the costs of rebuilding. Experts say those funds won't be nearly enough, with rebuilding hobbled by a lack of insurance. "There is no money available for these people to start reconstruction," said Alexander Allmann, an earthquake expert at Munich Re. Pedernales resident Manuel María Cusme, owner of Hotel El Coseñito on town's main beachfront, said he was worried. His hotel didn't collapse, but guest rooms have cracked walls and broken furniture. And he has only paid off half of a $221,000 loan for the hotel. "What tourist is going to want to come and stay here?" he asked. Pedernales--where billboards boast it is at "latitude zero," right on the equator--was still reeling four days after the quake. Its shrimp farming industry, which accounts for three-quarters of the local economy, was devastated when large pools ruptured, causing shrimp to drain out. Streets were closed off with shoulder-high piles of rubble. Garbage littered the sidewalks. Rescue workers and many residents wore paper surgical masks to protect from dust and the pervasive smell of death, the decomposing bodies. In the city's soccer stadium, more than 50 new coffins were stacked in piles awaiting the arrival of bodies extracted from the wreckage. Officials say they extracted 164 dead, among them dozens of Ecuadorean tourists buried under hotel rubble. Several dozen more remained missing. After a major tourism push by national officials, which included newly paved roads that made it easier to get to the Pacific coast, hotels of five to six floors began to sprout up around the city, said Milton Bravo, the city's tourism secretary. Last year, on national holidays, the town would gain between $2 million and $3 million dollars from the sector, he said. But now, 22 of the city's roughly 45 hotels have collapsed, and the remainder sustained structural damage, Mr. Bravo said. Beachfront restaurants with upbeat names like "Salsa and Cocktail" were also badly hit. "This reconstruction is going to take at least three to five years," said Mr. Bravo, wearing a hat that read "Pedernales, Tourism Power," as he helped coordinate food distribution. "The country is already facing an economic crisis." Write to Ryan Dube at ryan.dube@dowjones.com Credit: By Sara Schaefer Muñoz And Ryan Dube
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 20, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782322867
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782322867?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Bank of Canada's Poloz Sees Three-Year Adjustment to Oil Price Drop; Central bank governor says that energy sector will play a smaller role in future growth
Author: Kim Mackrael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
Related * Capital Account: Canada Does the Global Economy a Favor * Canada's Poloz Cautious on Economy (Apr. 19) However, Mr. Poloz warned at the time that lower foreign demand and the recent rally in the Canadian dollar could limit growth of Canada's nonresource exports, which are expected to lead the country's economic recovery.
Full text: It could take more than three years for the Canadian economy to fully adjust to the sharp drop in global oil prices, Bank of Canada Governor Stephen Poloz said Wednesday. Speaking before a Senate committee, Mr. Poloz said Canada benefited from high oil prices in earlier years, prompting firms to invest heavily in the country's energy sector. Lower global commodity prices are now causing the energy sector to contract, contributing to weaker economic growth. "We estimate that it's sort of a three-year period while the negatives are still ongoing in the background and the positives are emerging in the foreground," Mr. Poloz said. He added that it could take longer than three years "before we're settled at that new place" where growth in the rest of the economy can make up for the relative decline in the energy sector. It was the central bank governor's second appearance before a parliamentary committee in two days. On Tuesday, he told another committee that weak commodity prices would continue to restrain Canada's growth and warned that the global economy could disappoint further. Last week, the Bank of Canada announced it was holding the key interest rate at 0.5% and raising its outlook for this year's economic growth. The central bank said new fiscal measures announced in the government's budget plan last month should help offset other economic headwinds. Related * Capital Account: Canada Does the Global Economy a Favor * Canada's Poloz Cautious on Economy (Apr. 19) However, Mr. Poloz warned at the time that lower foreign demand and the recent rally in the Canadian dollar could limit growth of Canada's nonresource exports, which are expected to lead the country's economic recovery. Canada lost thousands of manufacturing and other nonresource companies during the commodity price boom, Mr. Poloz said Wednesday. Higher energy prices helped lift the country's currency during that time, making it harder for many exporters to sell their products abroad. "The export recovery has been very hesitant, very gradual, in part because of the damage that was done during that period," Mr. Poloz said. The central bank governor added that it was natural for firms to invest heavily in oil at a time when prices for the commodity were rising quickly. "To under invest would be to say to the world, 'No, I don't want your money, I don't want you to pay a lot for my resources,'" he said. While the energy sector will remain an important part of Canada's economy, Mr. Poloz said, it will play a smaller role in future growth. Write to Kim Mackrael at kim.mackrael@wsj.com Credit: By Kim Mackrael
Subject: Central banks; Canadian dollar; Commodities; Prices; Congressional committees; Economic growth; Energy industry; Governors
Location: Canada
Company / organization: Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782324359
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782324359?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Crude-Oil Prices Move Higher On Signs of Smaller Glut; Crude-oil prices climbed higher in late-Asia trade Thursday, underpinned by stronger risk-taking behavior after the latest data from the U.S. suggested the global glut of oil is dwindling.
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
Crude-oil prices climbed higher in late-Asia trade Thursday, underpinned by stronger risk-taking behavior after the latest data from the U.S. suggested the global glut of oil is dwindling.
Full text: Crude-oil prices climbed higher in late-Asia trade Thursday, underpinned by stronger risk-taking behavior after the latest data from the U.S. suggested the global glut of oil is dwindling. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $44.42 a barrel at 0607 GMT, up $0.24 in the Globex electronic session. June Brent crude on London's ICE Futures exchange rose $0.24 to $46.04 a barrel. Oil prices jumped to a five-month high in New York as traders looked past the growth in the U.S. crude stocks and focused on the decline in distillates inventories and domestic production. Distillate stocks, which include heating oil and diesel, fell by nearly 3.6 million barrels in the week that ended April 15, when analysts expected no change. It was enough to balance out an addition of 2.1 million barrels to crude stockpiles and send total oil and petroleum stockpiles lower -- though barely -- for only the sixth time in 24 weeks dating back to the start of November. Data from the Energy Information Administration also shows U.S. production of crude fell for the sixth straight week to 8.95 million barrels in the same week. Oil prices fell in the earlier session due to profit-taking after the overnight surge but later reversed direction. "There are many positive signs that the market is starting to rebalance and the upward momentum in prices is expected to remain through the second half of the year, said Stuart Ive, a client manager at OM Financial. Persistent oversupply has dragged oil prices down for nearly two years but signs of declining productions has stoked a more upbeat sentiment in recent weeks. Prices edged higher even after a group of key producers failed to clinch an output freeze agreement last week. Apart from the slowing production in the U.S., traders are also watching the ongoing supply outages elsewhere in the world such as Iraq, Nigeria, and the North Sea to further mop up the excess oil. China crude production is also expected to fall by around 5% this year. "This, combined with the accelerating cuts in North America, South America, and Europe, should help to ease the global oversupply and flip into a deficit by second half of 2017," said Gordon Kwan, the head of Asia oil and gas at Nomura. While supply is showing signs of shrinking, the slowing growth in demand is limiting price increases. The International Energy Agency now expects global oil demand growth to moderate to around 1.2 million barrels a day in 2016, slower than the 1.8 million barrels a day expansion of last year. "What we need is for production decline and demand growth to move much faster in order to counter the growing inventories and it remains to be seen how long this process will take," said Ben Le Brun, a market analyst at OptionsXpress. For this week, market watchers will be focusing on the policy meeting by the European Central Bank later on Thursday, which is widely expected to hold interests steady at record low level. China is also expected to release the final March trade data which should show that the country's crude imports in the first quarter of this year grew 13.4% from the same period last year. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 70 points to $1.5138 a gallon, while May diesel traded at $1.3382, 60 points higher. ICE gasoil for May changed hands at $399.50 a metric ton, up $12.75 from Wednesday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Supply & demand; Inventory; Crude oil prices
Location: Asia United States--US New York
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782327062
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782327062?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Firms Hit Pay Dirt; Follow-on share offerings by energy companies find success as crude rebounds from a slump that started in 2014
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
Though stock prices often decline on such deals due to the addition of new shares, Callon's shares ended Wednesday up 12%, at $10, as the price of oil reached near a five-month high and U.S. energy shares broadly rallied on better-than-expected crude-supply data. Follow-on deals, in which already-public companies sell new stock, have boomed since oil prices started to plunge in late 2014, as companies have sought cash to pay down debt, keep rigs drilling and, in some cases, fund acquisitions.
Full text: Oil companies seeking cash have found a well that keeps producing: the stock market. Callon Petroleum Co., a small oil producer, has sold new shares three times in the past six months to raise cash, most recently in a successful sale Tuesday night. Though stock prices often decline on such deals due to the addition of new shares, Callon's shares ended Wednesday up 12%, at $10, as the price of oil reached near a five-month high and U.S. energy shares broadly rallied on better-than-expected crude-supply data. "Slowly but surely--and I do mean slowly--the fundamental picture has gotten a little better," said Todd Garner, managing partner at hedge fund Protec Energy Partners LLC. "And it keeps getting just a little better." Follow-on deals, in which already-public companies sell new stock, have boomed since oil prices started to plunge in late 2014, as companies have sought cash to pay down debt, keep rigs drilling and, in some cases, fund acquisitions. While the deals have been a success for some investors who bought in, particularly this year, the sales also have left many nursing losses as share prices fell along with oil prices over much of the past two years. Last year, North American exploration-and-production companies sold a record of roughly $18 billion in such deals, according to a Wall Street Journal analysis of Dealogic data and securities filings. The deals are ahead of that pace this year, raising about $12 billion through Wednesday, even as some companies that sold shares last year have sought bankruptcy protection , wiping out investors. Callon isn't the only North American energy producer to tap the stock market several times, nor was its offering on Tuesday particularly large. But its latest deal underscores the recovery in oil prices. On Sunday, talks in Doha, Qatar, between some of the world's top oil-producing countries, including Saudi Arabia and Russia, fell apart without any agreement to restrain output amid a global glut of crude. Inaction was widely expected to send oil prices falling, and they did briefly, but have since risen. On Wednesday, light, sweet crude for May delivery rose $1.55, or 3.8%, to settle at $42.63 a barrel on the New York Mercantile Exchange, its highest settlement price since Nov. 25. U.S. prices have risen 7.2% over the past two days--6.7% for the global benchmark, Brent--as signs emerge that the market is beginning to stabilize without the coordination of big producers. The U.S. Energy Information Administration said Wednesday that distillate stocks, which include heating oil and diesel, fell by nearly 3.6 million barrels. Analysts had expected no change. It was enough to balance out an addition to crude stockpiles and send total oil and petroleum inventories slightly lower. Callon said late Tuesday that it raised about $187 million before fees, selling 22 million new shares. Callon said it would use those proceeds, along with cash on hand and another 9.3 million shares, to pay for swaths of West Texas drilling land it has agreed to buy from multiple sellers. The stock deal Tuesday is Callon's fourth since oil prices started falling in the summer of 2014. With the series of sales, Callon, based in Natchez, Miss., has roughly tripled the number of its shares outstanding since September 2014. Typically, that boost would push the stock's price lower as earnings are spread among many more shares. But Callon's stock price hasn't suffered: Its shares are up 9.4% since the company announced the first of the four stock offerings. Callon didn't respond to a request for comment. Analysts said investors have been high on Callon for a few reasons, including low drilling costs, operations in some of the most prolific parts of the Permian Basin, manageable debt and relatively inexpensive stock. Neal Dingmann, an analyst for SunTrust Robinson Humphrey Inc., said investors have been willing to bet on Callon and other oil producers if the companies can reduce their debt or expand without borrowing more. "It seems like investors can swallow dilution easier than the leverage," Mr. Dingmann said. Callon, founded in 1950, embarked upon a fortuitous shift in strategy in 2009. Long a Gulf of Mexico producer, the company decided to move to onshore drilling and chose as its focus the Permian Basin in West Texas. The Permian Basin has become a rare redoubt for oil producers and their investors amid the collapse in commodity prices, as many wells there yield large-enough volumes of oil and gas to make them worth the expense of drilling even at low prices. The same can't be said for the Gulf of Mexico, where higher drilling costs have hammered smaller companies operating there. Last week, Energy XXI Ltd., one of the largest independent producers in the Gulf, said it had filed for chapter 11 bankruptcy protection. Timothy Puko contributed to this article. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Investments; Crude oil prices; Securities markets; Shareholder voting; Financial performance
Location: United States--US
Company / organization: Name: Callon Petroleum Co; NAICS: 211111; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782333347
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782333347?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Japan Shares Extend Winning Streak; Nikkei gets a lift from rise in oil prices, weaker yen, hopes for more monetary stimulus
Author: Fong, Dominique
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
Chinese stock traders have also been concerned that credit conditions could tighten as a result of the central bank's more prudent monetary policy, Mr. Parry said.
Full text: Japan shares extended a winning streak Thursday as the yen weakened, oil prices edged up and hopes rose for more monetary stimulus. Japan's Nikkei Stock Average ended up 2.7%--the third consecutive day of gains. If it can keep up the pace Friday, it would notch a second straight week of gains. The Tokyo benchmark also reached its highest level since Feb. 2, meaning stocks are on track to recoup nearly all of their losses since Japan's central bank stunned markets by adopting negative interest rates on Jan. 29. "I think the most important factor for today's yen weakness and the strength of Japan's stock market is the rising crude-oil price," said Soichiro Monji, general manager of economic research at Daiwa SB Investments. "The rise in global [oil] price makes investors take on more risk." The Japanese yen weakened overnight and held steady Thursday during Asian trading hours at about 109.56 to one U.S. dollar. The slight weakness lifts pressure off exporters who benefit when a weak currency makes their products more competitive overseas. Mining, real estate and insurance sectors led Japan's market higher. Oil explorer Inpex rose 5.7%, Sumitomo Realty & Development gained 5.6% and Dai-ichi Life Insurance advanced 3.9%. Mitsubishi Motors suffered another day of steep losses: It was down 20% after falling 15% Wednesday when it admitted to cheating on fuel-economy tests. Analysts said the Nikkei's gains reflected speculation that the Bank of Japan could unveil further monetary-easing measures next week in a bid to boost the stagnant economy. These could include buying more exchange-traded funds of stocks, purchasing more government bonds and cutting an interest rate in a certain program for financial institutions seeking loans from the central bank, the analysts said. In the afternoon Thursday, former Bank of Japan deputy governor Kazumasa Iwata said the central bank would need to lower its interest rate to as much as minus 1% from negative 0.1% to tackle deflation. Meanwhile, Japanese companies with factories near the region struck by a recent series of earthquakes are having trouble returning to full production due to aftershocks. Suntory said it could take more than a month to restart its factory in the southern Kumamoto prefecture. Its shares, however, rose 2.1% Thursday, suggesting that investors' worries about the economic fallout from the earthquakes have eased. Elsewhere in Asia, most stock markets rose. Australia's S&P/ASX 200 climbed 1.1%, Korea's Kospi gained 0.8% and Hong Kong's Hang Seng Index finished up 1.8%. China was the exception, with the Shanghai Composite Index ending down 0.6%. Trading was choppy in China in a tug-of-war between rising spirits over fresh liquidity and disappointment over a signal that authorities could pull back from monetary stimulus. "The market is still very fixated on liquidity and the easing stance" of China's central bank, said Gavin Parry, managing director at brokerage Parry International Trading based in Hong Kong. The People's Bank of China injected a net 220 billion yuan into the financial system Thursday by buying seven-day short-term loans known as reverse repurchase agreements. The central bank has been pumping in similar cash injections this week to ease worries about a short-term liquidity squeeze. Recent worry about tighter liquidity was one of the reasons that the Shanghai market sold off Wednesday, traders said. Chinese stock traders have also been concerned that credit conditions could tighten as a result of the central bank's more prudent monetary policy, Mr. Parry said. Oil prices inched higher in Asian trading hours after reaching a five-month high overnight. The price of Brent crude was recently trading at about $45.83 a barrel. Shen Hong and Kosaku Narioka contributed to this article. Write to Dominique Fong at Dominique.Fong@wsj.com Credit: By Dominique Fong
Subject: Central banks; Stock exchanges; Yen; Interest rates; Factories; Investments; Earthquakes
Location: Japan
Company / organization: Name: Bank of Japan; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782345634
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782345634?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Ecuador Is Hard-Pressed to Pay for Earthquake Recovery; Disaster hits country already suffering from low oil prices and depleted reserves
Author: Sara Schaefer Muñoz; Ryan Dube; Sara Schaefer Muñoz; Dube, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract: None available.
Full text: PEDERNALES, Ecuador--This coastal city of beach bars, seafood cafes and small hotels was one of Ecuador's success stories, transformed by the country's recent burst of economic growth from a rundown fishing village to a bustling tourist spot. Now, 80% of its structures lie in ruins as rescuers search for corpses following Saturday's devastating magnitude-7.8 earthquake, which killed at least 525 people and injured more than 4,600 in Ecuador. In Pedernales, residents and officials say, all the recent progress has been erased. "Pedernales is starting from almost zero," said Mayor Gabriel Alcivar during a brief pause from touring the sweltering, debris-laden city Wednesday. "I'm not worried right now, but I'm worried about day 30, day 60, day 200, because people are without houses, and without work." Rebuilding homes, bridges and roads in places destroyed by the quake is expected to take years and cost billions of dollars, President Rafael Correa said Wednesday. That is money the country doesn't have as it faces a deep contraction due to the collapse in oil prices and sagging exports of bananas and flowers. Mr. Correa said Wednesday night that he is raising sales taxes to 14% from 12% and will charge a one-time levy on millionaires to rebuild the cities, according to the Associated Press. Taxes on companies will also rise, and Mr. Correa said he would look at selling state assets but he didn't specify which ones, AP reported. "It is the worst moment to face such a catastrophe," said Maggie Barreiro, an economist at San Francisco University in Quito. "The fiscal accounts are empty, and we are having huge problems of liquidity." Ecuador, the smallest member of the Organization of the Petroleum Exporting Countries, has just $133 million in its treasury, one of the lowest levels in at least a decade, according to the central bank. International reserves at the start of the year had fallen to $2.3 billion from $4.2 billion in August, and external debt had doubled to over $27 billion since 2009, according to Observatorio Fiscal, a Quito-based organization that tracks government finances. The bleak scenario led the International Monetary Fund this month to project that the economy would contact 4.5% this year and 4.3% in 2017, the worst performances in South America after Venezuela. Adding to the challenge is Ecuador's lack of access to financing, which has mainly been restricted to multilateral lenders and China since Mr. Correa opted to default on the country's debt in 2008. "There won't be large investments of resources, a large injection of money or a cascade of private investments," said Vicente Albornoz, the dean of the business and economics faculty at Quito's Las Americas University. Officials have tried to stay confident about rebuilding, pointing out that key industrial infrastructure, including pipelines, refineries and dams, weren't destroyed. But Mr. Correa noted that the quake was the worst disaster in 70 years. "This isn't going to take three days or three months," the president said. "This is going to take years." The long road ahead wasn't lost on José Manuel López, who considered his future amid the rubble of a building his father built 30 years ago that housed his family and weight-lifting gym. He, his wife and their three young children were trapped in its collapse until freed by neighbors. Eight others were killed, including his 68-year-old mother. "We'll probably go to Quito, I have family there," he said while trying to salvage his weights. "But I'll have to start all over." South America's costliest quake in the last 35 years was the magnitude 8.8 that hit Chile in 2010, causing losses of $30 billion, according to Munich Re, the world's largest reinsurer. The immediate costs of this latest disaster are expected to be covered by a $300 million government emergency fund and $600 million provided by multilateral lenders. "Ecuador will have to figure out a way to deal with this in the medium term because the effect of the fiscal constraint is going to exacerbate the challenge," said Alberto Rodríguez, the Ecuador director for the World Bank, which sent a team to assess the costs of rebuilding. Experts say those funds won't be nearly enough, with rebuilding hobbled by a lack of insurance. "There is no money available for these people to start reconstruction," said Alexander Allmann, an earthquake expert at Munich Re. Pedernales resident Manuel María Cusme, owner of Hotel El Coseñito on town's main beachfront, said he was worried. His hotel didn't collapse, but guest rooms have cracked walls and broken furniture. And he has only paid off half of a $221,000 loan for the hotel. "What tourist is going to want to come and stay here?" he asked. Pedernales--where billboards boast it is at "latitude zero," right on the equator--was still reeling four days after the quake. Its shrimp farming industry, which accounts for three-quarters of the local economy, was devastated when large pools ruptured, causing shrimp to drain out. Streets were closed off with shoulder-high piles of rubble. Garbage littered the sidewalks. Rescue workers and many residents wore paper surgical masks to protect from dust and the pervasive smell of death, the decomposing bodies. In the city's soccer stadium, more than 50 new coffins were stacked in piles awaiting the arrival of bodies extracted from the wreckage. Officials say they extracted 164 dead, among them dozens of Ecuadorean tourists buried under hotel rubble. Several dozen more remained missing. After a major tourism push by national officials, which included newly paved roads that made it easier to get to the Pacific coast, hotels of five to six floors began to sprout up around the city, said Milton Bravo, the city's tourism secretary. Last year, on national holidays, the town would gain between $2 million and $3 million dollars from the sector, he said. But now, 22 of the city's roughly 45 hotels have collapsed, and the remainder sustained structural damage, Mr. Bravo said. Beachfront restaurants with upbeat names like "Salsa and Cocktail" were also badly hit. "This reconstruction is going to take at least three to five years," said Mr. Bravo, wearing a hat that read "Pedernales, Tourism Power," as he helped coordinate food distribution. "The country is already facing an economic crisis." Write to Ryan Dube at ryan.dube@dowjones.com Credit: By Sara Schaefer Muñoz And Ryan Dube
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782345965
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782345965?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil's Slump Puts Expat Workers Out of Jobs
Author: Dawson, Chester; Vyas, Kejal
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Apr 2016: B.1.
Abstract:
The oil-price collapse has led energy producers to lay off more than 300,000 workers world-wide, according to Houston consultant Graves & Co. Few countries likely have produced as many out-of-work energy professionals seeking opportunities abroad as Venezuela, and now many of these expatriates are caught between job losses overseas and economic chaos in their homeland.
Full text: After immigrating to Canada from Venezuela in 2005, petroleum engineer Humberto Romero received three job offers within a month of completing a church-affiliated orientation program. But since getting laid off last April by his longtime employer, he has been unable to find a new job in Canada, and says he can't go home because of the economic and political crisis there. "I thought I'd get another job in three months, but it's been nine months and I've only had a couple of interviews," said Mr. Romero, who is 52 years old and married with two teenage children. He was let go from Husky Energy Inc. after a decade with the Calgary-based company. "The competition is really intense for the few jobs available," he said. Amid the energy industry's deepest retrenchment in two decades, some oil-and-gas workers who followed the energy boom of the last decade in search of better opportunities are finding themselves jobless and far from home. The oil-price collapse has led energy producers to lay off more than 300,000 workers world-wide, according to Houston consultant Graves & Co. Few countries likely have produced as many out-of-work energy professionals seeking opportunities abroad as Venezuela, and now many of these expatriates are caught between job losses overseas and economic chaos in their homeland. Thousands of oil workers, many of whom are alumni of the country's state-run oil company Petroleos de Venezuela SA, or PdVSA, fled the country, mostly after a strike between 2002 and 2003 that aimed to depose late President Hugo Chavez. The leftist leader fired 19,000 workers who had supported his ouster -- nearly half of PdVSA's labor force at the time -- with the stroke of a pen. Caracas-based alumni group Petroleum People estimates three out of four of those fired workers, who were mostly engineers and midlevel managers, left for jobs in Mexico, Argentina, Colombia and the Middle East, as well as the U.S. and Canada. Since then, thousands more have departed, including mechanics and technicians with more than two decades of experience, said Venezuelan oil union leader Ivan Freites. The western Canadian province of Alberta, which faced a chronic shortage of trained workers during a decade of booming investment in its oil sands, proved a major draw for Venezuelan workers. Their familiarity with heavy oil in Venezuela's Orinoco basin, similar to oil sands' extra-heavy crude, made them highly sought-after by Canadian producers. Venezuela ranked as one of the top 10 sources of immigrants to Alberta in the mid-2000s, a time when it accepted hundreds of families a year, according to provincial labor data. Repatriating isn't an option. The South American nation's economy is in shambles, jobs are scarce and fear of political oppression widespread. The International Monetary Fund estimates Venezuela's economy, which counts on oil for nearly all of its exports, will shrink by 8% this year after a 5.7% contraction in 2015. More than 100 professionals leave the local industry monthly as the economic situation deteriorates in the county, Mr. Freites estimates. Francia Galea, a former engineer at PdVSA's once prestigious research arm Intevep, has been working in Kuwait for the past four years and says she has no intention of returning. Instead, the 64-year old plans to move to the U.S. where she will file for political asylum. "What would I do in Venezuela? There's no work, there's no medicine, there's high crime," she said. "It's almost a refugee status that we're in." The spread of Venezuela's exiled workers around the world points to how the oil industry became globalized. "The oil industry is probably the most mobile industry" for workers, especially those with specialties such as deep-water or unconventional extraction, said Neil Gascoigne, a Houston-based global manager for Hays Specialist Recruitment LLC. "There's been plenty of opportunity to ply your trade all around the world." Trained energy professionals were in high demand -- particularly in emerging energy-production centers such as Canada and the U.S. -- before oil prices started a precipitous slide in mid-2014. Since then, jobs for expatriates have "kind of been shut down to those in only the most central roles," said Peter Clarke, the New York-based head of PricewaterhouseCoopers LLP's global mobility practice. "Some of these people have become nomads" in search of work. In Norway's west coast oil patch, Eastern European workers have been left without jobs as local activity slows. During the years of booming oil investment up until 2014, Eastern Europeans -- notably from Poland and the Baltic countries -- were attracted to the area. Among Calgary's Venezuelan ex-pat community, many say they and their families have put down roots and are trying to find ways to stay in Canada, even if oil-patch jobs are difficult to come by. Gerson Charmell, a 52-year old supply-chain expert with an M.B.A. who immigrated to Canada from Venezuela with his family in 2006, was laid off from ConocoPhillips's Canadian unit in February 2015 and has since struggled to find work and pay the bills. His first grandchild -- a Canadian citizen -- was born last year to one of his two sons, both of whom were educated in Alberta and are employed outside the energy industry. "I am downsizing my home to try to stay in Canada," Mr. Charmell said. The Venezuelan Canadian Association of Calgary, a nonprofit group set up in 2000 originally to raise funds for victims of a devastating flood, recently began holding resume-writing seminars last fall to help newly unemployed members find employment. PdVSA veteran Lorenzo Hernandez, who immigrated to Canada in 2004 but lost his job at Royal Dutch Shell PLC's Canadian subsidiary last August, said he is volunteering more with the expatriate group. "The good thing about being laid off is that it has given me a chance to provide additional support to the community," he said.
Credit: By Chester Dawson and Kejal Vyas
Subject: Employment; Energy industry; Expatriates; Petroleum industry
Location: Canada Venezuela
Company / organization: Name: Husky Energy Inc; NAICS: 213111; Name: Petroleos de Venezuela SA; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Apr 21, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782388872
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782388872?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
World News: Ecuador Strapped for Rebuilding --- Disaster slams a nation already reeling from low oil prices and depleted reserves
Author: Sara Schaefer Munoz; Ryan Dube; Sara Schaefer Munoz; Dube, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Apr 2016: A.10.
Abstract:
Ecuador, the smallest member of the Organization of the Petroleum Exporting Countries, has just $133 million in its treasury, one of the lowest levels in at least a decade, according to the central bank.
Full text: PEDERNALES, Ecuador -- This coastal city of beach bars, seafood cafes and small hotels was one of Ecuador's success stories, transformed by the country's recent burst of economic growth from a rundown fishing village to a bustling tourist spot. Now, 80% of its structures lie in ruins as rescuers frantically search for corpses following Saturday's devastating magnitude-7.8 earthquake, which killed at least 525 people and injured more than 4,600 in Ecuador. In Pedernales, residents and officials say, all the recent progress has been erased. "Pedernales is starting from almost zero," said Mayor Gabriel Alcivar during a brief pause from touring the sweltering, debris-laden city Wednesday. "I'm not worried right now, but I'm worried about day 30, day 60, day 200, because people are without houses, and without work." Rebuilding homes, bridges and roads in places destroyed by the quake is expected to take years and cost billions of dollars, President Rafael Correa said Wednesday. That is money the country doesn't have as it faces a deep contraction due to the collapse in oil prices and sagging exports of bananas and flowers. "It is the worst moment to face such a catastrophe," said Maggie Barreiro, an economist at San Francisco University in Quito. "The fiscal accounts are empty, and we are having huge problems of liquidity." Ecuador, the smallest member of the Organization of the Petroleum Exporting Countries, has just $133 million in its treasury, one of the lowest levels in at least a decade, according to the central bank. International reserves at the start of the year had fallen to $2.3 billion from $4.2 billion in August, and external debt had doubled to over $27 billion since 2009, according to Observatorio Fiscal, a Quito-based organization that tracks government finances. The bleak scenario led the International Monetary Fund this month to project that the economy would contact 4.5% this year and 4.3% in 2017, the worst performances in South America after Venezuela. Adding to the challenge is Ecuador's lack of access to financing, which has mainly been restricted to multilateral lenders and China since Mr. Correa opted to default on the country's debt in 2008. "There won't be large investments of resources, a large injection of money or a cascade of private investments," said Vicente Albornoz, the dean of the business and economics faculty at Quito's Las Americas University. Officials have tried to stay confident about rebuilding, pointing out that key infrastructure, including pipelines, refineries and dams, weren't destroyed. But Mr. Correa noted that the quake was the worst disaster in 70 years. "This isn't going to take three days or three months," the president said. "This is going to take years." The long road ahead wasn't lost on Jose Manuel Lopez, who considered his future amid the rubble of a building his father built that housed his family and weight-lifting gym. He, his wife and their three young children were trapped in its collapse until freed by neighbors. Eight others were killed, including his mother. "We'll probably go to Quito, I have family there," he said. "But I'll have to start all over." The immediate costs of the disaster are expected to be covered by a $300 million government emergency fund and $600 million provided by multilateral lenders. Experts say those funds won't be nearly enough, with rebuilding hobbled by a lack of insurance. "There is no money available for these people to start reconstruction," said Alexander Allmann, an earthquake expert at Munich Re. Pedernales resident Manuel Maria Cusme, owner of Hotel El Cosenito on town's main beachfront, said he was worried. His hotel didn't collapse, but guest rooms have cracked walls and broken furniture. "What tourist is going to want to come and stay here?" he asked. Credit: By Sara Schaefer Munoz and Ryan Dube
Subject: Economic conditions; Earthquakes
Location: Ecuador
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.10
Publication year: 2016
Publication date: Apr 21, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782388916
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782388916?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Companies Hit Pay Dirt --- Callon Petroleum's success in follow-on share offering reflects crude market's revival
Author: Dezember, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Apr 2016: C.1.
Abstract:
Follow-on deals, in which already-public companies sell new stock, have boomed since oil prices started to plunge in late 2014, as companies have sought cash to pay down debt, keep rigs drilling and, in some cases, fund acquisitions.
Full text: Oil companies seeking cash have found a well that keeps producing: the stock market. Callon Petroleum Co., a small oil producer, has sold new shares three times in the past six months to raise cash, most recently in a successful sale Tuesday night. Though stock prices often decline on such deals due to the addition of new shares, Callon's shares ended Wednesday up 12%, at $10, as the price of oil reached near a five-month high and U.S. energy shares broadly rallied on better-than-expected crude-supply data. "Slowly but surely -- and I do mean slowly -- the fundamental picture has gotten a little better," said Todd Garner, managing partner at hedge fund Protec Energy Partners LLC. "And it keeps getting just a little better." Follow-on deals, in which already-public companies sell new stock, have boomed since oil prices started to plunge in late 2014, as companies have sought cash to pay down debt, keep rigs drilling and, in some cases, fund acquisitions. While the deals have been a success for some investors who bought in, particularly this year, the sales also have left many nursing losses as share prices fell along with oil prices over much of the past two years. Last year, North American exploration-and-production companies sold a record of roughly $18 billion in such deals, according to a Wall Street Journal analysis of Dealogic data and securities filings. The deals are ahead of that pace this year, raising about $12 billion through Wednesday, even as some companies that sold shares last year have sought bankruptcy protection, wiping out investors. Callon isn't the only North American energy producer to tap the stock market several times, nor was its offering on Tuesday particularly large. But its latest deal underscores the recovery in oil prices. On Sunday, talks in Doha, Qatar, between some of the world's top oil-producing countries, including Saudi Arabia and Russia, fell apart without any agreement to restrain output amid a global glut of crude. Inaction was widely expected to send oil prices falling, and they did briefly, but have since risen. On Wednesday, light, sweet crude for May delivery rose $1.55, or 3.8%, to settle at $42.63 a barrel on the New York Mercantile Exchange, its highest settlement price since Nov. 25. U.S. prices have risen 7.2% over the past two days -- 6.7% for the global benchmark, Brent -- as signs emerge that the market is beginning to stabilize without the coordination of big producers. The U.S. Energy Information Administration said Wednesday that distillate stocks, which include heating oil and diesel, fell by nearly 3.6 million barrels. Analysts had expected no change. It was enough to balance out an addition to crude stockpiles and send total oil and petroleum inventories slightly lower. Callon said late Tuesday that it raised about $187 million before fees, selling 22 million new shares. Callon said it would use those proceeds, along with cash on hand and another 9.3 million shares, to pay for swaths of West Texas drilling land it has agreed to buy from multiple sellers. The stock deal Tuesday is Callon's fourth since oil prices started falling in the summer of 2014. With the series of sales, Callon, based in Natchez, Miss., has roughly tripled the number of its shares outstanding since September 2014. Typically, that boost would push the stock's price lower as earnings are spread among many more shares. But Callon's stock price hasn't suffered: Its shares are up 9.4% since the company announced the first of the four stock offerings. Callon didn't respond to a request for comment. Analysts said investors have been high on Callon for a few reasons, including low drilling costs, operations in some of the most prolific parts of the Permian Basin, manageable debt and relatively inexpensive stock. Neal Dingmann, an analyst for SunTrust Robinson Humphrey Inc., said investors have been willing to bet on Callon and other oil producers if the companies can reduce their debt or expand without borrowing more. "It seems like investors can swallow dilution easier than the leverage," Mr. Dingmann said. Callon, founded in 1950, embarked upon a fortuitous shift in strategy in 2009. Long a Gulf of Mexico producer, the company decided to move to onshore drilling and chose as its focus the Permian Basin in West Texas. The Permian Basin has become a rare redoubt for oil producers and their investors amid the collapse in commodity prices, as many wells there yield large-enough volumes of oil and gas to make them worth the expense of drilling even at low prices. The same can't be said for the Gulf of Mexico, where higher drilling costs have hammered smaller companies operating there. --- Timothy Puko contributed to this article. Credit: By Ryan Dezember
Subject: Investments; Securities markets; Crude oil prices; Petroleum industry
Location: United States--US
Company / organization: Name: Callon Petroleum Co; NAICS: 211111
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 21, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782389062
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782389062?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Drop in Volatile Trade; Chinese state stockpiling lifts crude imports to near record level
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
[...]U.S. employment data and comments from European Central Bank President Mario Draghi led to a surge in the U.S. dollar, which in turn weighed on commodity prices, analysts and brokers said.
Full text: Oil prices fell Thursday as bullish comments from top global oil officials were offset by macroeconomic data and changing expectations around monetary policy. Oil prices, along with other commodities including copper, gold and silver, were strongly positive in early trading, with oil trading at five-month highs. But U.S. employment data and comments from European Central Bank President Mario Draghi led to a surge in the U.S. dollar, which in turn weighed on commodity prices, analysts and brokers said. Mr. Draghi's comments, in which he said European interest rates would remain at current or lower levels for an extended period , were interpreted by the market as a sign that further stimulus measures there were a possibility. That weighed on the euro, which sparked the dollar rally. Meanwhile, the U.S. Labor Department reported surprisingly strong jobs data on Thursday, with the number of American workers applying for jobless claims falling to a 43-year low. That raised the possibility, until recently considered remote, that the U.S. could seek to raise interest rates sooner than previously expected. The two factors combined to take the air out of an oil market rally that has continued to look past bearish signs in the expectation that the wide imbalance between supply and demand is beginning to moderate. The U.S. oil benchmark has surged more than 60% since touching a low near $26 a barrel in February, and had been adding to gains again early Thursday before the market turned. Analysts and brokers said the price reaction seemed to be a sign that the market has grown top-heavy after the recent rally, and that traders were looking to take profits on signs of weakness. "The biggest negative factor was the ECB, with Draghi talking about doing whatever it takes" to keep the European economy stimulated, said Frank D. Cholly, a senior market strategist at brokerage R.J. O'Brien in Chicago. "That added euro weakness, dollar strength and ultimately all commodities took a hit." The benchmark U.S. oil contract, which had risen as high as $44.49 a barrel in early trading, settled down 2.3% at $43.18 a barrel on the New York Mercantile Exchange. The global Brent benchmark fell 2.8% to $44.53 a barrel on the ICE Futures Europe exchange. Before Mr. Draghi's comments and the U.S. employment data, the secretary-general of the Organization of the Petroleum Exporting Countries, Abdallah Salem el-Badri, said OPEC may revive talk of freezing oil production along with nonmembers at its next meeting in June, in an effort to overcome their failure to come to an agreement in Qatar on Sunday. Ibrahim Muhanna, a top adviser in the Saudi Arabian oil ministry, also said there could be another round of freeze talks in June. Analysts remain skeptical of the chances of such an agreement. In Doha, Saudi Arabian officials scuttled the deal at the last minute, saying Iran also had to constrain its output. Iran had refused because it is trying to regain market share after years of Western sanctions crippled its economy and oil industry. Meanwhile, China's crude imports in March were the second-highest on record, helping to allay fears that demand from the world's second-biggest oil consumer is slowing. China's government said Thursday that crude-oil imports in March were up 21.6% from a year earlier at around 7.7 million barrels a day. The near-record imports were underpinned by strong demand from government stockpiling and local refineries that are eager to take advantage of the low prices. In the U.S., data on Wednesday showed that stockpiles of crude increased last week by 2.1 million barrels and continued to hover near record highs. However, the Energy Information Administration also said U.S. production of crude fell for the sixth straight week to 8.95 million barrels. Last April, U.S. output peaked at 9.7 million barrels a day. "The dwindling U.S. oil production will ensure that the oversupply is noticeably reduced in the second half of the year and that the oil market will be balanced by next year at the latest," analysts at Commerzbank said in a report. Falling U.S. output will add to declines from producers outside OPEC this year. Non-OPEC production is expected to fall by 700,000 barrels a day in 2016, the largest annual decline since 1992, the International Energy Agency estimates. "Low oil prices have started to put a brake on non-OPEC producers, U.S. [shale] oil in particular," Fatih Birol, the agency's executive director, said in a speech Thursday. In refined-product markets, gasoline futures rose 0.6% to $1.5159 a gallon, while diesel futures fell 2.4% at $1.2998 a gallon. --Jenny W. Hsu and Benoit Faucon contributed to this article. Write to Christian Berthelsen at christian.berthelsen@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Christian Berthelsen and Georgi Kantchev
Subject: Euro; Interest rates; Prices; Petroleum production
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782400792
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
OPEC Officials: May Discuss Oil Freeze at June Meeting; OPEC is 'still alive' as a force in the oil market, says secretary-general Abdallah Salem el-Badri
Author: Faucon, Benoit; Kantchev, Georgi; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
Imposing new oil production limits wasn't seen as having much of an effect on the world's balance between oil supply and demand.
Full text: OPEC spoke on Thursday, but the market wasn't listening. The Organization of the Petroleum Exporting Countries could revive talk of freezing oil production along with nonmembers at its next meeting in June, said top oil officials on Thursday. A production freeze was an idea that had helped send prices rallying more than 50% from 12-year lows last winter. But after the 13-nation producer group ultimately failed to strike a production deal with Russia in Qatar over the weekend, investors didn't react much to the news that freeze talks could soon be renewed. Oil prices were up slightly Thursday after OPEC Secretary General Abdallah Salem el-Badri said imposing limits on oil producers could be on the table again. But prices then fell as much as 2% in afternoon trading in London. Some investors said they were looking to numbers like falling U.S. production or the rising dollars as their guideposts on oil, not OPEC statements. "OPEC is becoming less relevant, especially after the Doha disaster," said Rob Thummel, portfolio manager at Tortoise Capital Advisors, which manages $13 billion in energy assets. OPEC, whose members pump more than a third of world's oil, has long moved prices with the words of its top officials and oil ministers. Its ability to collaborate on production levels--especially through the world's largest exporter, Saudi Arabia--put it in a unique position to calm or disrupt oil markets. But the group has become progressively less influential with the rise of American oil production and the cartel's diminished capacity to agree. Saudi Arabia's continued rift with its rival in both OPEC and the Middle East in general, Iran, played a large role in torpedoing last weekend's oil-freeze talks. Iran said it couldn't limit its production as it tries to come back from years of crippling Western sanctions that ended in January. Imposing new oil production limits wasn't seen as having much of an effect on the world's balance between oil supply and demand. Saudi Arabia and others had already ruled out cutting production as untenable. But investors had looked to a freeze at current levels as an important signal that OPEC was still willing to intervene in the market. Now, said Tom Pugh, oil analyst at Capital Economics, "after the total mess in Doha, it will take a long time--and something far more substantial than renewed freeze chatter--before people start trusting OPEC again." Speaking on the sidelines of an energy conference in Paris, Mr. Badri said OPEC is "still alive" as a force in the oil market. And a top Saudi oil official, Ibrahim Muhanna, said the cartel would again talk about freezing production at the group's June 2 meeting in Vienna. More * Oil Prices Waver in Volatile Trade * Streetwise: What's 'Magic Number' for Oil? "The door for future cooperation remains open and I am sure we will discuss it in June," Mr. Muhanna said. OPEC officials said the hopes of a production deal now rest with Iran, where officials have said they would only begin constraining their output when they reached pre-sanctions levels of output. Mehdi Hosseini, a top Iranian oil ministry official, said his country wouldn't freeze until production reached 4.2 million barrels a day--up from about 3.5 million barrels a day now and 2.9 million barrels a day when Western sanctions were in effect and barred sales to Europe. On Tuesday, deputy oil minister Rokneddin Javadi told Iranian state media said that such production levels may be reached by June 20. Other experts have said Iran won't be able to ramp up that much until October. OPEC officials said there wouldn't be serious talks on freezing production until those levels are hit. "Iran will have to be part of these talks or any future freeze deal," said an OPEC official from a Persian Gulf Arab country. Not everyone is down on OPEC these days. Mr. Badri said the West African nation of Gabon had requested OPEC membership. With production at about 240,000 barrels a day, according to the U.S. Energy Information Administration, Gabon would be OPEC's smallest member if admitted. Write to Benoit Faucon at benoit.faucon@wsj.com , Georgi Kantchev at georgi.kantchev@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon, Georgi Kantchev and Summer Said
Subject: Supply & demand; Sanctions; Crude oil prices; Petroleum production
Location: Iran Russia Qatar Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782532527
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782532527?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Russia Factors Urals Crude at $40/Barrel in Budget Plan; Russia has lowered an average crude price factored into the oil-dependent budget, preparing for years of sluggish commodity prices, Prime Minister Dmitry Medvedev said.
Author: Ostroukh, Andrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
MOSCOW--Russia has lowered an average crude price factored into the oil-dependent budget, preparing for years of sluggish commodity prices, Prime Minister Dmitry Medvedev said Thursday.
Full text: MOSCOW--Russia has lowered an average crude price factored into the oil-dependent budget, preparing for years of sluggish commodity prices, Prime Minister Dmitry Medvedev said Thursday. The newly approved budget plan envisages an average price of Urals crude of $40 per barrel this year, Mr. Medvedev said. Russia was slow to revise budget parameters, given volatility on the global crude market. The previous version of the budget, approved in late 2015, envisaged an average oil price of $50 per barrel, and since oil dropped toward $30 per barrel officials have been saying the revised version would be released soon. Speaking at a weekly government meeting, Mr Medvedev said the so-called conservative or risk scenario for this year envisages Urals crude will average $25 per barrel. "It's is hard to make forecasts for obvious reasons. But it's better to opt for underestimating possible revenues than to seek extra reserves to balance the budget in the future," Mr. Medvedev said. Mr. Medvedev has repeated the call for better investment climate and said there was no plan to change taxes this year. He said that the government will continue supporting domestic substitution of imported goods, something that Russia pursues since western sanctions were applied in 2014. Russia, which receives nearly half of its budget revenue from oil exports, suffered from a drop in oil prices. Also hit by Western sanctions, Russia's economy shrank 3.7% last year and is on track to drop further this year. Under the revised baseline forecast, the economy is likely to grow in the next three years by 1%-2% given that prices for crude remain low at $40 per barrel. So far this year, an average price of a barrel of Urals blend totaled $33 per barrel, said Economy Minister Alexei Ulyukayev. Speaking at the same government meeting, Mr. Ulyukayev said that the economy will keep contracting next year for the third year in a row if oil prices average $25 per barrel. Write to Andrey Ostroukh at andrey.ostroukh@wsj.com Credit: By Andrey Ostroukh
Subject: Energy economics; Budgets; Crude oil prices; Crude oil
Location: Russia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1782817556
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1782817556?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
California Ranch With Two Miles of Oceanfront Seeks $108 Million; In Goleta, Las Varas Ranch was assembled by Timothy M. Doheny, grandson of oil tycoon Edward Laurence Doheny, Sr.
Author: Taylor, Candace
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
The main Spanish-style house has unobstructed views of the Pacific, said owner Anita "Topsy" Doheny, whose late husband, Timothy M. Doheny, combined two adjacent parcels to create the ranch in the 1960s.
Full text: A large, oceanfront Santa Barbara-area ranch that sparked a local scuffle over its development potential is going on the market for $108 million. Located in Goleta, about 18 miles west of Santa Barbara, Las Varas Ranch encompasses about 1,800 acres, said Kerry Mormann of Berkshire Hathaway HomeServices, who is listing the property with Anthony Punnett of Douglas Elliman Real Estate. Mr. Mormann added that the ranch's roughly 2 miles of oceanfront make it "pretty unique," especially since they include a sandy beach. The main Spanish-style house has unobstructed views of the Pacific, said owner Anita "Topsy" Doheny, whose late husband, Timothy M. Doheny, combined two adjacent parcels to create the ranch in the 1960s. Mr. Doheny, who died in 2009, was the grandson of oil tycoon Edward Laurence Doheny, Sr. The property also includes a manager's home from the early 1900s, several staff houses, two arenas and various ranch buildings. The property is being sold with roughly 50 head of cattle and several horses, Mrs. Doheny said. A new owner could apply to build additional homes on the property, but "there's not a high level of development potential," Mr. Mormann said. In 2005 the Dohenys applied to Santa Barbara County for lot line adjustments and a reconfiguration of the property to allow for more homes to be built near the ocean. The application, which drew opposition from local residents and conservationists who said it could pave the way for residential development, was denied in September. Mrs. Doheny said the additional homes would have been for use by family members. But she said the denial of the project isn't why she is selling. Now in her 70s, she said the long drive to the property from her home in Los Angeles is growing more taxing. "Emotionally I'm very attached to the property," she said. "But it's getting to be too much." She said she wants to find a buyer "like my husband, who would love it for what it is." Santa Barbara County's largest non-commercial sale was in 2007, when roughly 25,000 acres of ranchland sold for about $135 million, Mr. Mormann said. Write to Candace Taylor at Candace.Taylor@wsj.com Credit: By Candace Taylor
Subject: Real estate sales
Location: Santa Barbara County California
Company / organization: Name: Berkshire Hathaway HomeServices; NAICS: 531210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Real Estate
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783016061
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783016061?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
GE Earnings: What to Watch; Focus will be on the company's order book, appetite for acquisitions and impact of oil slump
Author: Mann, Ted
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
The Wall Street Journal reported last week that Carlyle Group LP is in talks to buy oil-field-services businesses from Baker Hughes Inc. and Halliburton Co. that could be valued at more than $7 billion.
Full text: General Electric Co. is scheduled to report first-quarter earnings before the market opens Friday. Here's what you need to know: EARNINGS FORECAST: Analysts forecast earnings per share of 19 cents, down from 20 cents during the same period last year, according to the median of estimates compiled by Thomson Reuters. REVENUE FORECAST: Revenue is pegged at $27.67 billion, according to Thomson Reuters, down from $29.36 billion reported by the Fairfield, Conn.-based conglomerate a year earlier. WHAT TO WATCH: --ORDERS: Investors will be looking for clues on the state of the global economy. Morgan Stanley forecasts that GE's new orders of major equipment will likely fall compared with a robust first quarter last year. Some bright spots in its order book, however, will be in gas-turbines sales in the U.S. and health-care equipment in China. Morgan Stanley also anticipates a drop in industrial-segment income to $3.2 billion. That is largely the result of the cost of integrating the Alstom SA power assets that GE took control of late last year. --HINTS ON M&A: Analysts will be seeking clues about GE's acquisition plans. The Wall Street Journal reported last week that Carlyle Group LP is in talks to buy oil-field-services businesses from Baker Hughes Inc. and Halliburton Co. that could be valued at more than $7 billion. GE has coveted those businesses, which include a unit making drill bits, as it tries to find targets to build up its own product lines amid the slump in crude-oil prices. Investors will also be looking for signals about GE's intentions for its health-care business, parts of which the company has said it would be willing to sell off. The business primarily makes medical scanners and imaging machines but also has a growing life-sciences division that executives have said they want to keep. --COST CUTS AND MARGINS: At the end of last year, GE promised it would aggressively cut costs as it faces headwinds in some key units, especially its oil-and-gas unit . The company says it will cut more than $1 billion in costs from that business over two years and will work with customers who want to renegotiate previously committed orders. GE has previously warned that revenue and operating profit in the business could fall as much as 15% this year. Write to Ted Mann at ted.mann@wsj.com Credit: By Ted Mann
Subject: Earnings per share; Acquisitions & mergers; Financial performance
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Alstom SA; NAICS: 541330; Name: Halliburton Co; NAICS: 213112, 237990; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783113281
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783113281?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
As Oil Jobs Dry Up, Workers Turn to Solar Sector; Burgeoning solar projects offer opportunities for out-of-work rig hands, roustabouts and pipe fitters
Author: Cook, Lynn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract: None available.
Full text: A few years ago, Sean and Stormy Fravel were riding the oil and gas boom like so many others in West Texas. But when their jobs disappeared along with $100-a-barrel oil prices, they turned to a new type of energy occupation: solar power. Instead of driving an 18-wheeler to haul drilling equipment in and out of the oil patch, the Fravels now install solar panel racking systems and perform quality checks on Alamo 6, a solar farm under construction in McCamey, about 300 miles northwest of San Antonio. "If oil booms I'll send her back to the field," Mr. Fravel said of his big rig. "I won't go though. My grandfather always said it's better to make a slow dime than a fast nickel." Related * SunEdison Files for Chapter 11 Bankruptcy Protection Plunging oil and gas has generated more than 84,000 pink slips in Texas, according to the Texas Alliance of Energy Producers. But many rig hands, roustabouts, pipe fitters and even some engineers are finding a surprising alternative in the utility-scale solar farms rising from the desert near the border with New Mexico. Nearly a dozen solar projects able to generate almost 1,000 megawatts of renewable energy are in the works, enough to power 165,000 homes. The Electric Reliability Council of Texas, which operates the state power grid, expects an additional 12,000 megawatts of solar power to come online by 2030. The 30,000 jobs the U.S. solar sector is projected to add this year are a fraction of the estimated 150,000 American jobs being lost in oil. And it remains to be seen whether such workers will stay in the solar sector if an oil boom returns, and beckons again with the lure of bigger paychecks that can stretch into the six figures. Though solar is booming in Texas, not every company has been successful. On Thursday, solar-energy company SunEdison Inc. said it filed for chapter 11 bankruptcy protection. The company had borrowed heavily to buy up wind and solar developers, accumulating a pile of debt. Still, the trend toward solar highlights a fundamental change in the U.S. energy mix, with some die-hard roughnecks gravitating toward what is growing: green energy. When the Fravels met in Alice, Texas, in 2012, the Eagle Ford Shale was booming and crude was king. Mr. Fravel, 29 years old, drove trucks for Halliburton Co., and saved so much money he was able to buy his own 18-wheeler. Ms. Fravel, 24, joined the business, and together they hauled six deliveries a week into the oil patch. But orders dwindled to next to nothing in 2015 as oil prices dropped into the $40-a-barrel range. "We ended up living out of our 18-wheeler for six or seven months because we couldn't pay rent," Mr. Fravel said. Today, he helps install the acres of racks that large solar panels will be mounted to at the Alamo 6 solar site that Mortenson Construction is finishing this year. His wife conducts quality control checks to make sure nuts and bolts are tightened properly, flagging any handiwork she judges to be lacking. Mr. Fravel's job with Mortenson Construction doesn't fetch as much as his $13.50-an-hour position with Halliburton did because the oil patch demanded 18-hour days, 7 days a week. But rich overtime pay has evaporated in the oil fields, even for those who managed to keep their jobs, Mr. Fravel said, adding that he and his wife have stable three-year contracts and even get most weekends off. Solar work typically isn't as lucrative as oil patch labor, which tends to fetch $13 to $25 an hour depending on a worker's skill level during normal times. Workers were paid considerably more during the boom, when time-and-a-half overtime and the common practice of working 14 days on and 7 days off meant that many were making $100,000 or more. But it is more reliable. When the oil work he had counted on started evaporating last year, Daniel Fleming Jr., 38, left his $19-an-hour oil-patch job and took a $3-an-hour pay cut to join McCarthy Building Cos., a construction company building the 212-megawatt Roserock solar farm in West Texas, which would be the state's largest. Since starting the new job in January, Mr. Fleming has been promoted to general foreman. He now makes more than his hourly oil-patch rate, but less than he did overall then due to fewer overtime hours. Still, he prefers his new line of work, noting that he has yet to be paid for about $5,000 of the work he did during oil's frenzied days. While some of his crew members talk about returning to the oil fields, "I'm not," said Mr. Fleming, whose wife had their first child last month. "Steady and stable." Any construction worker with oil and gas experience can immediately transfer over to solar, said Geoff Baxter, senior vice president of engineering and construction for Recurrent Energy, the San Francisco-based renewable firm behind Roserock. He said about half of the employees and contract workers at the site came from oil. But the work is temporary: It will only take a few dozen people to operate the solar farm, which is set to start generating power by the end of the year. "Solar is a new skill set," he said. "It's not like they can't go back to oil. It only helps them." Workers in Texas and other oil patch regions have long moved in and out of the business with booms and busts. Nonetheless, Texas oil companies are starting to fret about a potential skilled labor shortage in 2017 if crude prices rebound to $50 a barrel because their workforce cuts have been so deep that some employees are moving into new industries, according to a report from energy analysts at Sterne Agee. Engineer Servando Sendejo said he bounced from one oil field to the next after graduating from college in 2010, pulling down ever higher pay checks to frack wells across Texas and New Mexico. But after he was laid off last year, he joined OCI Solar Power, the firm operating the Alamo 6 solar farm. Since then he has been fielding calls from oil patch friends who want to get into solar. "People joke about how it is the new boom," he said. "Older guys in middle age say they found something where they see longevity. The young crowd says I'm just here till the oil price comes back up and I can get that six-figure paycheck again. And next time I won't spent it like last time." Erin Ailworth contributed to this article. Write to Lynn Cook at Lynn.Cook@wsj.com Credit: By Lynn Cook
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783140341
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783140341?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Former Exxon CEO Clifton Garvin Dies; Engineer preferred to focus on running company rather than being its public face
Author: Hagerty, James R
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
In 1981, he told reporters that rising long-term demand for energy meant the U.S. probably would need to rely more heavily on nuclear power and develop synthetic fuels, perhaps with government subsidies.
Full text: Clifton C. Garvin Jr., a publicity-shy engineer who headed Exxon Corp. amid tumultuous oil-price swings in the 1970s and early 1980s, has died, a family representative said. Mr. Garvin, who had been ill for more than a year, died Sunday at a nursing home in Easton, Md. He was 94. He served as chairman and chief executive of the company, now known as Exxon Mobil Corp., from 1975 to December 1986, when he retired. His time in the upper ranks of Exxon coincided with nationalizations of oil fields overseas, surging oil prices and gasoline shortages in the 1970s, and a collapse of prices in the 1980s as new fields created a glut. Widespread belief that the world was rapidly running out of oil stirred talk of an "energy crisis" in the 1970s. That thrust formerly obscure oil executives like Mr. Garvin into a more public role. A poor speaker, "he was very ill-at-ease" with that new role, said Rudy Schmidt, a son-in-law to Mr. Garvin. "He suffered fools very poorly" and preferred to focus on running the company rather than being its public face. Nonetheless, Mr. Garvin felt compelled to appear on television and radio programs in the 1970s to explain to the public why gasoline prices were so high and what could be done about it. Many Americans were furious at oil companies. "It got so bad...that I had to go to an unlisted phone number," he told the New York Times in a 1980 interview. "I got all kinds of phone calls at home that were just terrible." In 1981, he told reporters that rising long-term demand for energy meant the U.S. probably would need to rely more heavily on nuclear power and develop synthetic fuels, perhaps with government subsidies. Worried that oil was a shrinking industry, Exxon blundered through a diversification into electronic office equipment. In the early 1980s, it made Qwip fax machines and Qyx electronic typewriters and hoped to challenge International Business Machines. Exxon's office products ran into quality problems, however, and Exxon pulled the plug on that business in the mid-1980s. Clifton Canter Garvin Jr. was born on Dec. 22, 1921, in Portsmouth, Va. His father was a district manager for Safeway grocery stores. The younger Mr. Garvin earned a master's degree in chemical engineering from Virginia Polytechnic Institute and State University. During World War II, he served with the U.S. Army in the South Pacific. He joined Exxon in 1947 at its Baton Rouge refinery. Early in his career, he allowed a professor of ornithology to place students on oil platforms in the Gulf of Mexico to monitor movements of hummingbirds. That episode enhanced his lifelong passion for bird watching, which he pursued around the world during his retirement. He is survived by his wife, Thelma; four children, 10 grandchildren and 13 great-grandchildren. Write to James R. Hagerty at bob.hagerty@wsj.com Credit: By James R. Hagerty
Subject: Gasoline prices; Shortages
Company / organization: Name: New York Times Co; NAICS: 511110, 511120, 515112, 515120; Name: Army-US; NAICS: 928110; Name: Virginia Polytechnic Institute & State University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New Y ork, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783140345
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783140345?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Shift in Rate View Upends Markets; Dollar gains, oil falters as U.S. jobs strength, ECB talk raise odds of Fed tightening in June
Author: Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Apr 2016: n/a.
Abstract:
A drop in U.S. jobless claims to a four-decade low followed by European Central Bank officials opening the door to further interest-rate cuts caused investors to rethink the global interest-rate backdrop.
Full text: Markets reversed sharply on Thursday, with the dollar ending higher and oil prices giving up big early gains, as global investors grapple with the prospect that the Federal Reserve could raise interest rates sooner than expected. A drop in U.S. jobless claims to a four-decade low followed by European Central Bank officials opening the door to further interest-rate cuts caused investors to rethink the global interest-rate backdrop. This comes as some analysts have suggested the long dollar rally could be over if the Fed stands pat for a while. The Wall Street Journal Dollar Index, which tracks it against a basket of 16 currencies, ended up 0.2% at 86.21. The dollar's rise helped erode earlier gains in U.S. oil, which settled at $43.18 a barrel, after hitting its highest level in five months earlier in the session. Stocks also fell, with the Dow Jones Industrial Average tumbling 0.6% to 17982.52. While investors still think there is virtually no chance the Fed will tighten monetary policy at its next meeting, which concludes April 27, some believe stronger recent U.S. data and climbing oil prices may be starting to push up inflation. That might lead the central bank to signal that a June rate increase is more likely. "U.S. data has actually been pretty good, and there is very little chance of a June move by the Fed priced in," said Peter Gorra, head of FX trading at BNP Paribas in New York. The dollar rose 8.6% in 2015, as investors bet the Fed would push rates up more aggressively than its peers overseas but has fallen 4.4% so far in 2016 on expectations the central bank will move more slowly. The market may be underestimating the Fed's pace, however. Eric Rosengren, president of the Federal Reserve Bank of Boston, said Monday that he thought the central bank was closer to raising rates than many investors anticipate. Federal-fund futures, used by investors and traders to bet on central-bank policy, now are showing a 65% likelihood of a rate increase by the end of the year, up from 54% on Monday, according to CME Group. Chances of a June increase stand at 21%, the data showed. The sudden and sharp reversals reflect some investor concerns that recent commodity and equity gains are linked more to momentum trading than fundamentals, making them vulnerable to swift declines if interest-rate or other expectations shift. Those concerns are particularly acute for oil prices, which earlier this week continued to climb even after major producing nations failed to reach a deal on capping production and data on when the oversupply will ease in the near term remains mixed. "Some of these assets have moved a lot," said John Briggs, head of strategy for Americas at RBS Securities. "Although most investors believe the Fed is unlikely to do anything, they figure, 'why take the chance?'" Related * Dow Drops Below 18000 * The Long Slog to Earn $100 From Government Bonds * Treasury Sets Sales of $175 Billion in Debt U.S. oil hit $44.49 earlier in Thursday's trading, its highest price since early December. The U.S. oil benchmark has surged more than 60% since touching a low near $26 a barrel in February. Gold and other commodities also rallied. But the tone of the market began to change after government data showed the number of U.S. workers applying for unemployment benefits declined last week to its lowest level in 43 years. Still, oil and other commodity gains didn't falter until an hour later when ECB President Mario Draghi said the central bank stands ready to use "all instruments available," including further cuts in all its interest rates to ensure the inflation rate returns to its target. The ECB decided to leave the central bank's key interest rates and other stimulus programs unaltered. With the ECB sounding dovish, traders focused on the possibility of U.S. rates going up sooner than expected. The dollar reversed course and rallied while oil and other commodities gave up their gains. A strengthening dollar tends to be bearish for commodities, which are priced in the U.S. currency and become more expensive when the dollar rises. Some investors may have decided to boost their dollar positions, after reducing dollar holdings over the last few weeks, Mr. Gorra said. Net bets by hedge funds and other speculative investors stood near their lowest level since at least mid-2014 in the week to April 12, regulatory data showed. The rally in oil and other commodities "is definitely fragile," said Lee Ferridge, head of macro strategy for North America at State Street Global Markets. "I'm surprised it has carried on as long as it has." The big move in oil prices since February may help stoke inflation, giving the Fed another reason to act, said Shahab Jalinoos, head of FX strategy at Credit Suisse. "Ultimately if stock markets keep going up and oil keeps going up, inflation will eventually start going up," he said. Chelsey Dulaney contributed to this article. Write to Ira Iosebashvili at ira.iosebashvili@wsj.com Credit: By Ira Iosebashvili
Subject: Central banks; Interest rates; American dollar; Commodities; Prices; Federal Reserve monetary policy
Location: United States--US
People: Rosengren, Eric
Company / organization: Name: BNP Paribas; NAICS: 522110; Name: CME Group; NAICS: 523210; Name: Federal Reserve Bank of Boston; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 21, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783140379
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783140379?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Up On Signs of Slower Production; June Brent crude on London's ICE Futures exchange rose $0.68 or 1.5% to $45.21 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2016: n/a.
Abstract:
Crude oil prices gathered momentum in early Asia trade Friday on a weakening greenback, and as traders move beyond the growing surplus to focus on the declining trend in production.
Full text: Crude oil prices gathered momentum in early Asia trade Friday on a weakening greenback, and as traders move beyond the growing surplus to focus on the declining trend in production. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $43.84 a barrel at 0156 GMT, up $0.66 or 1.5% in the Globex electronic session. June Brent crude on London's ICE Futures exchange rose $0.68 or 1.5% to $45.21 a barrel. Global oil prices have been in the doldrums for almost two years due to a growing excess of supply in the market. However, recent signs of ebbing production outside of the Organization of the Petroleum Exporting Countries has rallied prices. Both U.S. West Texas Intermediate and the international benchmark Brent were last up by nearly 5% this week so far. Prices fell overnight after European Central Bank President Mario Draghi said European interest rates would remain at current or lower levels for an extended period. His comments sparked a rally in the dollar, as they were interpreted by the market that further stimulus measures would be forthcoming. The U.S. dollar pared gains and was last down 11 cents or 0.13% at $86.10 in Asian trading hours, according to The Wall Street Journal Dollar Index, which measures the value of the greenback against 16 foreign currencies. As oil prices are pegged to the dollar, a weaker greenback makes oil products are cheaper for traders holding foreign currencies. Overnight prices were also weighed down by the resumption of crude production in Kuwait back to around 3 million barrels a day after the recent strike. "It is a very volatile market at the moment, and it will stay this way for a while," said Vyanne Lai, a commodity analyst at National Australia Bank. The prolonged collapse in prices has resulted in a decrease in investment in the upstream industry, in particular, among the U.S. shale producers who are likely to decrease output by 700,000 barrels a day this year, said Fatih Birol, head of the global energy watchdog International Energy Agency. While U.S. production will recover eventually, supply from other non-OPEC producers such as Russia, China, Mexico and Colombia will fall throughout the period due to a lack of new investment, Mr. Birol said Thursday at a news conference in Japan. "We can expect the market to come back to balance in 2017. From 2018 onward there will be stock draws, leading to a gradual increase in price levels," he said. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 175 points to $1.5334 a gallon, while May diesel traded at $1.3190, 192 points higher. ICE gas oil for May changed hands at $394.25 a metric ton, up $1.00 from Thursday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Investments; Crude oil; Price increases
Location: United States--US Asia
People: Birol, Fatih
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783157869
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783157869?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
As Oil Jobs Dry Up, Workers Turn to Solar --- Burgeoning green-energy projects offer opportunities for out-of-work rig hands and roustabouts
Author: Cook, Lynn
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Apr 2016: B.1.
Abstract:
The Electric Reliability Council of Texas, which operates the state power grid, expects an additiona l12,000 megawatts of solar power to come online by 2030.
Full text: A few years ago, Sean and Stormy Fravel were riding the oil and gas boom like so many others in West Texas. But when their jobs disappeared along with $100-a-barrel oil prices, they turned to a new type of energy occupation: solar power. Instead of driving an 18-wheeler to haul drilling equipment in and out of the oil patch, the Fravels now install solar panel racking systems and perform quality checks on Alamo 6, a solar farm under construction in McCamey, about 300 miles northwest of San Antonio. "If oil booms I'll send her back to the field," Mr. Fravel said of his big rig. "I won't go though. My grandfather always said it's better to make a slow dime than a fast nickel." Plunging oil and gas has generated more than 84,000 pink slips in Texas, according to the Texas Alliance of Energy Producers. But many rig hands, roustabouts, pipe fitters and even some engineers are finding a surprising alternative in the utility-scale solar farms rising from the desert near the border with New Mexico. Nearly a dozen solar projects able to generate almost 1,000 megawatts of renewable energy are in the works, enough to power 165,000 homes. The Electric Reliability Council of Texas, which operates the state power grid, expects an additiona l12,000 megawatts of solar power to come online by 2030. The 30,000 jobs the U.S. solar sector is projected to add this year are a fraction of the estimated 150,000 American jobs being lost in oil. And it remains to be seen whether such workers will stay in the solar sector if an oil boom returns, and beckons again with the lure of bigger paychecks that can stretch into the six figures. Though solar is booming in Texas, not every company has been successful. On Thursday, solar-energy company SunEdison Inc. said it filed for chapter 11 bankruptcy protection. The company had borrowed heavily to buy up wind and solar developers. Still, the trend toward solar highlights a fundamental change in the U.S. energy mix, with some die-hard roughnecks gravitating toward what is growing: green energy. When the Fravels met in Alice, Texas, in 2012, the Eagle Ford Shale was booming and crude was king. Mr. Fravel, 29 years old, drove trucks for Halliburton Co., and saved so much money he was able to buy his own 18-wheeler. Ms. Fravel, 24, joined the business, and together they hauled six deliveries a week into the oil patch. But orders dwindled to next to nothing in 2015 as oil prices dropped into the $40-a-barrel range. "We ended up living out of our 18-wheeler for six or seven months because we couldn't pay rent," Mr. Fravel said. Today, he helps install the acres of racks that large solar panels will be mounted to at the Alamo 6 solar site that Mortenson Construction is finishing this year. His wife conducts quality control checks to make sure nuts and bolts are tightened properly, flagging any handiwork she judges to be lacking. Mr. Fravel's job with Mortenson Construction doesn't fetch as much as his $13.50-an-hour position with Halliburton did because the oil patch demanded 18-hour days, 7 days a week. But rich overtime pay has evaporated in the oil fields, even for those who managed to keep their jobs, Mr. Fravel said, adding that he and his wife have stable three-year contracts and even get most weekends off. Solarwork typically isn't as lucrative as oil patch labor, which tends to fetch $13 to $25 an hour depending on a worker's skill level during normal times. Workers were paid considerably more during the boom, when time-and-a-half overtime and the common practice of working 14 days on and 7 days off meant that many were making $100,000 or more. But it is more reliable. When the oil work he had counted on started evaporating last year, Daniel Fleming Jr., 38, left his $19-an-hour oil-patch job and took a $3-an-hour pay cut to join McCarthy Building Cos., a construction company building the 212-megawatt Roserock solar farm in West Texas, which would be the state's largest. Since starting the new job in January, Mr. Fleming has been promoted to general foreman. He now makes more than his hourly oil-patch rate, but less than he did overall then due to fewer overtime hours. Still, he prefers his new line of work, noting that he has yet to be paid for about $5,000 of the work he did during oil's frenzied days. While some of his crew members talk about returning to the oil fields, "I'm not," said Mr. Fleming, whose wife had their first child last month. "Steady and stable." Any construction worker with oil and gas experience can immediately transfer over to solar, said Geoff Baxter, senior vice president of engineering and construction for Recurrent Energy, the San Francisco-based renewable firm behind Roserock. He said about half of the employees and contract workers at the site came from oil. But the work is temporary: It will only take a few dozen people to operate the solar farm, which is set to start generating power by the end of the year. "Solar is a new skill set," he said. "It's not like they can't go back to oil. It only helps them." Workers in Texas and other oil patch regions have long moved in and out of the business with booms and busts. Nonetheless, Texas oil companies are starting to fret about a potential skilled labor shortage in 2017 if crude prices rebound to $50 a barrel because their workforce cuts have been so deep that some employees are moving into new industries, according to a report from energy analysts at Sterne Agee. Engineer Servando Sendejo said he bounced from one oil field to the next after graduating from college in 2010, pulling down ever higher pay checks to frack wells across Texas and New Mexico. But after he was laid off last year, he joined OCI Solar Power, the firm operating the Alamo 6 solar farm. "People joke about how it is the new boom," he said. "Older guys in middle age say they found something where they see longevity. The young crowd says I'm just here till the oil price comes back up and I can get that six-figure paycheck again. And next time I won't spent it like last time." --- Erin Ailworth contributed to this article. Credit: By Lynn Cook
Subject: Employment; Solar energy; Petroleum production
Location: New Mexico West Texas
Company / organization: Name: SunEdison; NAICS: 221114, 221118; Name: Halliburton Co; NAICS: 213112, 237990
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Apr 22, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783217479
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783217479?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Shift in Rate View Upends Markets --- Dollar gains, oil falters as U.S. jobs strength, ECB talk raise chances Fed will tighten in June
Author: Iosebashvili, Ira
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Apr 2016: C.1.
Abstract:
A drop in U.S. jobless claims to a four-decade low followed by European Central Bank officials opening the door to further interest-rate cuts caused investors to rethink the global interest-rate backdrop.
Full text: Markets reversed sharply on Thursday, with the dollar ending higher and oil prices giving up big early gains, as global investors grapple with the prospect that the Federal Reserve could raise interest rates sooner than expected. A drop in U.S. jobless claims to a four-decade low followed by European Central Bank officials opening the door to further interest-rate cuts caused investors to rethink the global interest-rate backdrop. This comes as some analysts have suggested the long dollar rally could be over if the Fed stands pat for a while. The Wall Street Journal Dollar Index, which tracks it against a basket of 16 currencies, ended up 0.2% at 86.21. The dollar's rise helped erode earlier gains in U.S. oil, which settled at $43.18 a barrel, after hitting its highest level in five months earlier in the session. Stocks also fell, with the Dow Jones Industrial Average tumbling 0.6% to 17982.52. While investors still think there is virtually no chance the Fed will tighten monetary policy at its next meeting, which concludes April 27, some believe stronger recent U.S. data and climbing oil prices may be starting to push up inflation. That might lead the central bank to signal that a June rate increase is more likely. "U.S. data has actually been pretty good, and there is very little chance of a June move by the Fed priced in," said Peter Gorra, head of FX trading at BNP Paribas in New York. The dollar rose 8.6% in 2015, as investors bet the Fed would push rates up more aggressively than its peers overseas but has fallen 4.4% so far in 2016 on expectations the central bank will move more slowly. The market may be underestimating the Fed's pace, however. Eric Rosengren, president of the Federal Reserve Bank of Boston, said Monday that he thought the central bank was closer to raising rates than many investors anticipate. Federal-fund futures, used by investors and traders to bet on central-bank policy, late Thursday showed a 65% likelihood of a rate increase by the end of the year, up from 54% on Monday, according to CME Group. Chances of a June increase stand at 21%, the data showed. The sudden and sharp reversals reflect some investor concerns that recent commodity and equity gains are linked more to momentum trading than fundamentals, making them vulnerable to swift declines if interest-rate or other expectations shift. Those concerns are particularly acute for oil prices, which earlier this week continued to climb even after major producing nations failed to reach a deal on capping production and data on when the oversupply will ease in the near term remains mixed. "Some of these assets have moved a lot," said John Briggs, head of strategy for Americas at RBS Securities. "Although most investors believe the Fed is unlikelyto do anything, they figure, 'why take the chance?'" U.S. oil hit $44.49 earlier in Thursday's trading, its highest price since early December. The U.S. oil benchmark has surged nearly 65% since touching a low near $26 a barrel in February. Gold and other commodities also rallied. But the tone of the market began to change after government data showed the number of U.S. workers applying for unemployment benefits declined last week to its lowest level in 43 years. Still, oil and other commodity gains didn't falter until an hour later when ECB President Mario Draghi said the central bank stands ready to use "all instruments available," including further cuts in all its interest rates to ensure the inflation rate returns to its target. The ECB decided to leave the central bank's key interest rates and other stimulus programs unaltered. With the ECB sounding dovish, traders focused on the possibility of U.S. rates going up sooner than expected. The dollar reversed course and rallied while oil and other commodities gave up their gains. A strengthening dollar tends to be bearish for commodities, which are priced in the U.S. currency and become more expensive when the dollar rises. Some investors may have decided to boost their dollar positions, after reducing dollar holdings over the last few weeks, Mr. Gorra said. Net bets by hedge funds and other speculative investors stood near their lowest level since at least mid-2014 in the week to April 12, regulatory data showed. The rally in oil and other commodities "is definitely fragile," said Lee Ferridge, head of macro strategy for North America at State Street Global Markets. "I'm surprised it has carried on as long as it has." --- Chelsey Dulaney contributed to this article.
Credit: By Ira Iosebashvili
Subject: Foreign exchange money reports
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 22, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783217517
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783217517?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Rise as Panic Eases; Investors wager on commodities; traders say even temporary changes to oil market were enough to keep rally going
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2016: n/a.
Abstract:
The gains come as many analysts expected oil to retreat toward that low, citing stockpiles lingering near record highs, still-strong global production and the failure of the world's biggest exporters to complete a deal last weekend to cap output.
Full text: Oil kick-started its rally during a week many expected it to fall apart, the product of a clear change of heart among investors: The panic is gone. Crude gained for the eighth time in 10 weeks, a rally that has pushed it up 67% from a nearly 13-year low in February. The gains come as many analysts expected oil to retreat toward that low, citing stockpiles lingering near record highs, still-strong global production and the failure of the world's biggest exporters to complete a deal last weekend to cap output. Instead, small and even temporary changes to the oil market were enough to keep the rally going, traders said. Pipeline outages and strikes disrupted supply around the world, China reported rising imports, employment rose in the U.S. and the storage glut there didn't grow. With fears of a U.S. recession now firmly on the back burner, these changes are enough to avoid another huge oil selloff for now, said Quincy Krosby, market strategist at Prudential Financial, which manages $1.2 trillion. "All the market needs to see is that at the margin something is changing," she said. "There's stability globally, and that helps oil." Light, sweet crude for June delivery settled up 55 cents, or 1.3%, at $43.73 a barrel on the New York Mercantile Exchange. It was the highest settlement since Nov. 10, after a weekly gain of $2.02, or 4.8%. Brent, the global benchmark, rose 58 cents, or 1.3%, to $45.11 a barrel on ICE Futures Europe. It ended the week up $2.01, or 4.7%, its seventh winning week in the past nine. The gains come amid a broader change of heart from investors about commodities. Silver and copper also rode winning streaks during the week, gold is coming off its best quarter in 30 years and industrial metals such as steel, aluminum and zinc have posted a string of recent gains. Even the most downtrodden commodities like iron ore and coal bounced after an announcement of new tax overhauls in China lifted hopes for its economic growth, said Bart Melek, head of commodity strategy at TD Securities in Toronto. After investors repeatedly sought redemptions in early 2015, they have now put more money into commodity hedge funds than they have taken out for seven consecutive months, the longest stretch since eVestment began tracking flow data in November 2008. Those funds added $4.1 billion in the first quarter, their best quarter in nearly seven years, eVestment said Friday. "The sentiment in commodity markets has clearly shifted toward being more bullish," said Jeffrey Currie of Goldman Sachs in a note to clients. Investors have been moving quickly to get ahead of trades, pumping money into oil and other oversupplied commodity markets months before many expect their glut may start to wane, Mr. Melek and others said. Goldman said the shift isn't sustainable and warned that oil, in particular, may fall again before its supply and demand are likely to rebalance sometime this fall. "We are so fraught with speculative cash right now across the sector that we're probably going to be seeing outsized reaction or volatility on even moderate news," said Mr. Melek of TD Securities. Production disruptions in Kuwait, Nigeria and Venezuela had added to bullish sentiment in oil, pulling it up from the start of the week almost immediately after the weekend's failed negotiations on an output cap between Saudi Arabia, Russia and others. U.S. output has continued to slowly decline, falling to below 9 million barrels a day in the prior week, according to Energy Information Administration data released Wednesday. It showed a strong draw on distillate stocks, which include heating oil and diesel, balancing out an addition to crude stockpiles last week, taking total U.S. stocks lower for only the sixth time in 24 weeks since the start of November. But investors shouldn't become complacent because of steady gains and improving sentiment, analysts and traders said. Others beyond Goldman warned that prices could retreat sharply again in the weeks to come, noting how temporary the recent supply disruptions can be. Kuwait, for instance, where production nearly halved earlier in the week due to an oil workers' strike, already has output back to its normal level. "This is not a place where you want to take a directional oil bet," said James Koutoulas, chief executive at the futures-trading firm Typhon Capital Management, which manages about $100 million in assets. "You want to [bet on] volatility." In refined-product markets, gasoline futures settled up 1% Friday at $1.5309 a gallon, with gains of 4.8% on the week, its best week since early March. Diesel futures settled up 0.7% at $1.3089 a gallon, up 6.2% for the week. Georgi Kantchev contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Commodity markets; International finance
Location: China United States--US
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: New York Mercantile Exchange; NAICS: 523210; Name: Prudential Financial Inc; NAICS: 551112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783262408
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783262408?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Gloom Hurts GE Results; Conglomerate reports higher revenue but power and oil-industry equipment units weigh on earnings
Author: Mann, Ted
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2016: n/a.
Abstract:
The global oil-market rout continued to weigh on General Electric Co., which posted a quarterly decline in operating income and orders for its core industrial businesses.
Full text: The global oil-market rout continued to weigh on General Electric Co., which posted a quarterly decline in operating income and orders for its core industrial businesses. GE reported a 6.1% gain in revenue for the first three months of 2016, but profit declines in units making locomotives, power turbines and oil-industry equipment hurt its bottom line. Chief Executive Jeff Immelt said the conglomerate's diversity enabled it to withstand a "very challenging environment," especially in the oil and gas business. The company maintained its annual guidance for investors but lowered its outlook for the oil unit, saying its operating profit could fall 30% over the course of 2016 on as much as a 20% drop in revenue. "Diversity is a key strength during this period of volatility," Mr. Immelt said on a conference call. "Most of the portfolio is strong, and we're delivering. There's plenty of business out there to achieve our goals." The collapse in crude oil prices has hit GE in the midst of a generational shift at the company. Mr. Immelt is selling off the bulk of GE Capital, the financial services arm that once provided half of GE's profit but became a drag after nearly collapsing during the financial crisis. The exit from the finance business is ahead of schedule, Mr. Immelt said Friday. GE has signed deals for $166 billion of the roughly $200 billion in assets it plans to sell from the unit. GE filed a request to regulators on March 31 that would allow it to shed its designation as a systemically important financial institution and exit supervision by the Federal Reserve. Meanwhile, GE said it is making progress integrating the power-equipment business it bought last year from France's Alstom SA. Profit in the power business, excluding Alstom, fell 28% in the first quarter, but the company expects revenue and earnings to rise in the second half of the year. The company's jet-engine business was strong, with profit up 16% despite a decline in equipment orders. This week, federal regulators issued a safety directive requiring airlines to fix or replace certain GE engine models to prevent ice buildup that could lead the engines to shut down. Related * GE Files to End Fed Oversight After Shrinking GE Capital * General Electric to Move Headquarters to Boston * Oil Prices Weigh on GE's Core Business The gloomy performance of the oil business dominated. GE reported declines across all the unit's product lines, which include compressors, flexible risers and valves. The business has been hardest hit by drop-offs in subsea oil exploration and onshore oil and gas production in the U.S., said Chief Financial Officer Jeffrey Bornstein. "The first quarter was way softer than we expected it to be," Mr. Bornstein said in an interview. The number of active onshore oil rigs in the U.S. slid by 27% in the first quarter, he noted, when GE had expected a drop of half that size for the industry. Profit in the company's oil business fell 37% compared with a year earlier, while equipment orders dropped 70%. For the quarter ended March 31, GE reported an operating profit of $3.3 billion for its core industrial business, down 7% from a year earlier. Overall, GE posted a net loss of $98 million tied largely to discontinued operations, including some within its finance unit. A net loss of $13.57 billion in the year-earlier first quarter reflected an $8.94 billion loss from discontinued operations and a $6.3 billion income-tax provision. Revenue in the latest period rose to $27.85 billion. Oil wasn't as significant a burden on GE rival Honeywell International Inc., which reported a 9% jump in earnings despite a 38% drop in sales in its business unit that makes catalysts and adsorbents for the oil refining and petrochemical industry. Honeywell Chief Financial Officer Thomas Szlosek said demand for gasoline and petrochemicals remains high, which means customers haven't interrupted production cycles to reinvest in plants and refineries. "The customers are running those facilities very hard, not stopping to reload their catalysts," he said in an interview. "The good news is that has to stop some time. The better news is we have a nice backlog of orders, particularly in the catalyst business." Honeywell booked a first-quarter profit of $1.19 billion. Revenue increased 3.4% to $9.5 billion. Earlier this year, Honeywell held merger talks with United Technologies Corp. but abandoned its pursuit after it was rebuffed by United Technologies. On Friday, Honeywell CEO David Cote told investors that he had moved on: "It's done. It's past. It had its time, and that time has gone." Anne Steele and Andy Pasztor contributed to this article. Write to Ted Mann at ted.mann@wsj.com Credit: By Ted Mann
Subject: Net losses; Financial performance; Crude oil prices
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Alstom SA; NAICS: 541330
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 22, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783281792
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783281792?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Copper Prices Gain With Oil; Industrial metal is also lifted by optimism over demand from China
Author: Yang, Stephanie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2016: n/a.
Abstract:
Related News * Dollar Rises After Solid U.S. Data * China's Economic Growth in 2015 Is Slowest in 25 Years (Jan. 19, 2016) * Copper Bounces Between Gains, Losses "Dr. Copper and crude like the idea that interest rates remain the same in Europe," Mr. Gero said, using a nickname for copper based on its ability to reflect economic health through its many industrial uses.
Full text: Copper prices closed higher on Friday, lifted by rising oil prices and increased optimism that China's economy is starting to stabilize. Copper for May delivery settled up 0.6% at $2.2645 a pound on the Comex division of the New York Mercantile Exchange and traded as high as $2.3020 earlier in the session. U.S. oil futures were recently up 1.1% to $43.67 a barrel on Friday. A gain in oil prices tends to help copper, since the two commodities are often traded in one basket, with a larger share allocated to oil. George Gero, managing director at RBC Wealth Management, said both commodities benefited Friday from the possibility of more stimulus overseas. On Thursday, the European Central Bank decided to keep rates unchanged and hinted at implementing further cuts if necessary. Related News * Dollar Rises After Solid U.S. Data * China's Economic Growth in 2015 Is Slowest in 25 Years (Jan. 19, 2016) * Copper Bounces Between Gains, Losses "Dr. Copper and crude like the idea that interest rates remain the same in Europe," Mr. Gero said, using a nickname for copper based on its ability to reflect economic health through its many industrial uses. The industrial metal has also found support from stronger economic data out of China that show signs of recovery in the country's housing and manufacturing sectors. China is the world's largest consumer of copper, accounting for 45% of demand. Trade data for March has also shown an increase in copper imports into China compared with a year earlier. Write to Stephanie Yang at stephanie.yang@wsj.com Credit: By Stephanie Yang
Subject: Gold markets; Prices
Location: China United States--US
Company / organization: Name: RBC Wealth Management; NAICS: 523110, 523120; Name: New York Mercantile Exchange; NAICS: 523210; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783317682
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Reliance Industries Profit Rises on Strong Refining Margins; Revenue fell 10.7%, hurt by a fall in the prices of crude oil and petroleum products
Author: Agarwal, Vibhuti
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2016: n/a.
Abstract:
Reliance, the country's energy-to-telecoms conglomerate, has been investing in the telecommunications, retail, security, financial services, hotels and media sectors as it seeks to diversify revenue sources and reduce its dependence on the country's heavily-regulated oil and gas sectors.
Full text: NEW DELHI--Reliance Industries Ltd., operator of the world's largest crude-oil refining facility, beat market estimates Friday by reporting a higher-than-expected 15.9% rise in net profit for the fiscal fourth-quarter. The company's consolidated net profit rose to 73.98 billion rupees ($1.11 billion) in the three months ended March 31, from 63.81 billion rupees a year earlier, supported by lower expenses and higher refining margins, the company said in a statement. The profit is more than the 69.48 billion rupees predicted by a poll of analysts by Thomson Reuters. Revenue fell 10.7% to 602.52 billion rupees from 674.70 billion rupees a year earlier, hurt by a fall in the prices of crude oil and petroleum products. "Refining and petrochemicals delivered record operating and financial performances," Chairman Mukesh Ambani said in a statement. Reliance's gross refining margin, or how much the company earned by converting each barrel of crude oil into fuel products, climbed to $10.8 per barrel during the quarter, from $10.1 a barrel a year earlier. The company also said it plans to roll out its telecommunication foray this fiscal year. It has spent close to $12 billion to build infrastructure for the Reliance Jio Infocomm Ltd. venture that will offer fourth-generation mobile and digital services. Reliance, the country's energy-to-telecoms conglomerate, has been investing in the telecommunications, retail, security, financial services, hotels and media sectors as it seeks to diversify revenue sources and reduce its dependence on the country's heavily-regulated oil and gas sectors. The company, which is in both exploration and refining, has closed most of its fuel-retailing outlets as it couldn't compete on prices with state-run companies that get subsidies from the government. Shares of Reliance Industries ended 0.21% lower Friday ahead of the results. Write to Vibhuti Agarwal at vibhuti.agarwal@wsj.com Credit: By Vibhuti Agarwal
Subject: Energy economics; Crude oil
People: Ambani, Mukesh D
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 22, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783450025
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783450025?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Stree t Journal
Kayne Anderson Partnership Buys Oklahoma Oil and Gas Assets for $106M
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2016: n/a.
Abstract:
Casillas Petroleum Resource Partners LLC, a new joint venture between Kayne Anderson and Casillas, has paid $106 million for the assets, which include a stake in 260 wells over 12,000 acres in the South Central Oklahoma Oil Province, or SCOOP.
Full text: Kayne Anderson Capital Advisors LP has teamed up with energy company Casillas Petroleum Corp. to buy energy assets in Oklahoma from Chesapeake Energy Corp., according to a Thursday news release. Casillas Petroleum Resource Partners LLC, a new joint venture between Kayne Anderson and Casillas, has paid $106 million for the assets, which include a stake in 260 wells over 12,000 acres in the South Central Oklahoma Oil Province, or SCOOP. The deal effective date was Oct. 1, 2015, the release said. Neither Kayne Anderson nor Casillas could be reached for further details. Kayne Anderson, of Los Angeles, focuses on energy, private credit and real estate. It has raised about $5.8 billion for energy investments and owns about 30 portfolio companies that work in North America's energy sector. Earlier this month, it committed $250 million to Phoenix Natural Resources LLC, a new company based in Houston formed to buy oil and gas assets. Casillas, founded in 1986 and based in Tulsa, Okla., focuses on energy exploration and development in North America. http://kaynecapital.com http://www.casillaspetro.com
Subject: Foreign investment; Electric utilities; Energy industry
Location: Oklahoma North America Los Angeles California
Company / organization: Name: Chesapeake Energy Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 22, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783450064
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783450064?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Pressure: Baker Hughes Has Appeal Even if Halliburton Deal Fails; Investors should look for longer-term upside in Baker Hughes' stock
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2016: n/a.
Abstract:
Both Halliburton and Baker Hughes will unveil first-quarter earnings during the most challenging operating environment since the financial crisis and the lowest crude prices in well over a decade.
Full text: Next week will be a nail biter for two oilfield-service giants, but not for the usual reason. Both Halliburton and Baker Hughes will unveil first-quarter earnings during the most challenging operating environment since the financial crisis and the lowest crude prices in well over a decade. But the looming April 30 merger deadline is the date circled on investors' calendars. Another extension, or last-minute dramatic asset disposals , is still a possibility, of course. Any investor willing to bet a deal goes through as is--despite clear opposition from the Justice Department and grumbling from customers--can put their money where their mouth is and earn a roughly 2,000% annualized return in Baker Hughes shares. More realistic ones have moved past April 30 and are asking what happens next as the companies go it alone. Although Halliburton is likely to be writing a large, deal-break check to Baker Hughes, the former has bounced more sharply from its low earlier this year. Halliburton is up 48% versus just 26% for Baker Hughes. Investors clearly are looking past a merger agreed upon in happier times and assessing how each company can weather the tough ones yet to come. The 60% bounce in oil prices from their February low has had much to do with the share-price recovery. But the optimism looks premature. The companies are in what is now the inverse of a sweet spot. Oil prices even at their lows were sufficient for Middle East producers to keep the spigots open. Now, though, they still are too low for new North American shale wells or many expensive offshore projects to get the green light. Even if crude edges up to around $50 a barrel by the end of the year, Barclays analysts note, any recovery for oilfield services would be "drawn out and uneven" before an actual recovery begins in 2018. Of the sector's big three global companies, the one not involved in the ill-starred deal, Schlumberger, is their favorite. But Baker Hughes deserves a look, too--and not only because of a likely infusion of the $3.5 billion break-fee, before tax, courtesy of Halliburton. True, the company is damaged goods since it has been in a state of limbo since November 2014. But being behind the curve in restructuring means it still has more fat to cut than rivals. Furthermore, its break-fee cash means it can go shopping for bombed-out competitors. It can easily target companies such as offshore drillers. These operate in a different-enough field to avoid the competition concerns likely to doom its current merger. Alternatively, it could buy back its own stock. There's opportunity in adversity. Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Subject: Acquisitions & mergers; Oil service industry; Investments; Competition; Crude oil prices
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 201 6
Publication date: Apr 22, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783556988
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783556988?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Weekly U.S. Oil-Rig Count Falls by Eight; U.S. oil-rig count fell to 343 in latest week, extending declines
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs fell by one in the latest week to 88.
Full text: The U.S. oil-rig count fell by eight to 343 in the latest week, according to Baker Hughes Inc., maintaining an extended trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to fall. But it hasn't fallen enough to relieve the global glut of crude. There are now about 79% fewer rigs of all kinds since a peak of 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs fell by one in the latest week to 88. The U.S. offshore-rig count was 26 in the latest week, down two from the previous week and down eight from a year earlier. Oil prices were higher Friday as investors continued to buy back into commodities in a bet that oversupplied markets will ease later this year, brokers and analysts said. Oil was trading above the five-month high it hit Thursday as one of its strongest rallies in years chugged on in the face of analysts' expectations. Recently, U.S. crude oil rose 1.3% to $43.72 a barrel. Read More * Oil Prices Rise as Speculators Continue to Boost Market * OPEC Officials: May Discuss Oil Freeze at June Meeting * What Is the 'Magic Number' for the Price of Oil? Write to Ezequiel Minaya at ezequiel.minaya@wsj.com Corrections & Amplifications An earlier version of this article miscalculated the percentage drop in oil rigs from the peak in October 2014. The number of oil rigs dropped 79% from the peak, not 73%. (May 6, 2016) Credit: By Ezequiel Minaya
Subject: Oil service industry; Prices; Supply & demand
Location: United States--US
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783574368
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783574368?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Libya's State Oil Company Acts to Block Rival's Crude Loading; Sale would create lucrative revenue stream to parallel government in east
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Apr 2016: n/a.
Abstract:
If completed, the sale would create a lucrative revenue stream to a parallel government in the east and potentially imperil a fragile peace process with the United Nations-backed unity government that rules the country's western half.
Full text: The Tripoli-based National Oil Co. said late Friday that it had taken action to block the first export of crude oil by a rival company in Libya's east. If completed, the sale would create a lucrative revenue stream to a parallel government in the east and potentially imperil a fragile peace process with the United Nations-backed unity government that rules the country's western half. The eastern government has repeatedly tried to export oil this year but has had trouble finding shippers and buyers amid fears of legal action by the country's internationally recognized National Oil Co. in Tripoli. Libya has fractured since the 2011 ouster and death of dictator Moammar Gadhafi, with militias controlling large swaths of the oil-rich North African nation. Related * U.N.-Backed Government Moves to Secure Control in Libya * EU Discusses Measures to Help Libya's New Government * U.S. Sanctions to Target Opponents of U.N.-Backed Government in Libya The unity government, called the Government of National Accord, has been slow to assert control over the factions that rule the country's east, where authorities have refused to recognize the new political body. Under Libyan law, all petroleum produced and sold in the country has to be done through the National Oil Co., deemed by the U.N. to be independent of the various factions vying for power. The eastern government has set up its own National Oil Co., though, in the hope of bolstering its position. On Friday, a spokesman said the company had sold its first cargo and a tanker was ready to load at the eastern port of Marsa al-Hariga. But in a statement posted on its website, Tripoli's National Oil Co. said it had ordered employees at the terminal not to load the tanker and warned the vessel's master that the operation was illegal. The company also said the U.N. had been notified of the attempted loading, saying it was in breach of a resolution on Libya. Libya's oil exports amount to about 300,000 barrels a day and represent the country's main source of revenue. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Location: Libya
People: Qaddafi, Muammar El
Company / organization: Name: United Nations--UN; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783597462
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783597462?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Rises as Panic Eases --- At $43.73 a barrel, crude hits five-month high; investors are seen as more bullish
Author: Puko, Timothy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Apr 2016: B.5.
Abstract:
The gains come as many analysts expected oil to retreat toward that low, citing stockpiles lingering near record highs, still-strong global production and the failure of the world's biggest exporters to complete a deal last weekend to cap output.
Full text: Oil kick-started its rally during a week many expected it to fall apart, the product of a clear change of heart among investors: The panic is gone. Crude gained for the eighth time in 10 weeks, a rally that has pushed it up 67% from a nearly 13-year low in February. The gains come as many analysts expected oil to retreat toward that low, citing stockpiles lingering near record highs, still-strong global production and the failure of the world's biggest exporters to complete a deal last weekend to cap output. Instead, small and even temporary changes to the oil market were enough to keep the rally going, traders said. Pipeline outages and strikes disrupted supply around the world, China reported rising imports, employment rose in the U.S. and the storage glut there didn't grow. With fears of a U.S. recession now firmly on the back burner, these changes are enough to avoid another huge oil selloff for now, said Quincy Krosby, market strategist at Prudential Financial. "All the market needs to see is that at the margin something is changing," she said. "There's stability globally, and that helps oil." Light, sweet crude for June delivery settled up 55 cents, or 1.3%, at $43.73 a barrel on the New York Mercantile Exchange. It was the highest settlement since Nov. 10, after a weekly gain of $2.02, or 4.8%. Brent, the global benchmark, rose 58 cents, or 1.3%, to $45.11 a barrel on ICE Futures Europe. It ended the week up $2.01, or 4.7%, its seventh winning week in the past nine. The gains come amid a broader change of heart from investors about commodities. Silver and copper also rode winning streaks during the week, gold is coming off its best quarter in 30 years and industrial metals such as steel, aluminum and zinc have posted a string of recent gains. Even the most downtrodden commodities like iron ore and coal bounced after an announcement of new tax overhauls in China lifted hopes for its economic growth, said Bart Melek, head of commodity strategy at TD Securities in Toronto. After investors repeatedly sought redemptions in early 2015, they have now put more money into commodity hedge funds than they have taken out for seven consecutive months, the longest stretch since eVestment began tracking flow data in November 2008. Those funds added $4.1 billion in the first quarter, their best quarter in nearly seven years, eVestment said Friday. "The sentiment in commodity markets has clearly shifted toward being more bullish," said Jeffrey Currie of Goldman Sachs in a note to clients. Investors have been moving quickly to get ahead of trades, pumping money into oil and other oversupplied commodity markets months before many expect their glut may start to wane, Mr. Melek and others said. Goldman said the shift isn't sustainable and warned that oil, in particular, may fall again before its supply and demand are likely to rebalance sometime this fall. "We are so fraught with speculative cash right now across the sector that we're probably going to be seeing outsized reaction or volatility on even moderate news," said Mr. Melek of TD Securities. Production disruptions in Kuwait, Nigeria and Venezuela had added to bullish sentiment in oil, pulling it up from the start of the week almost immediately after the weekend's failed negotiations on an output cap between Saudi Arabia, Russia and others. U.S. output has continued to slowly decline, falling to below 9 million barrels a day in the prior week, according to Energy Information Administration data released Wednesday. It showed a strong draw on distillate stocks, which include heating oil and diesel, balancing out an addition to crude stockpiles last week, taking total U.S. stocks lower for only the sixth time in 24 weeks since the start of November. But investors shouldn't become complacent because of steady gains and improving sentiment, analysts and traders said. Others beyond Goldman warned that prices could retreat sharply again in the weeks to come, noting how temporary the recent supply disruptions can be. Kuwait, for instance, where production nearly halved earlier in the week due to an oil workers' strike, already has output back to its normal level. "This is not a place where you want to take a directional oil bet," said James Koutoulas, chief executive at the futures-trading firm Typhon Capital Management. "You want to [bet on] volatility." --- Georgi Kantchev contributed to this article. Credit: By Timothy Puko
Subject: Commodity prices; Crude oil
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2016
Publication date: Apr 23, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783914698
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783914698?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
GE Battles Energy Slump --- Oil unit drags down earnings from core industrial business; Immelt hails 'diversity'
Author: Mann, Ted
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Apr 2016: B.1.
Abstract:
Oil wasn't as significant a burden on GE rival Honeywell International Inc., which reported a 9% jump in earnings despite a 38% drop in sales in its business unit that makes catalysts and adsorbents for the oil refining and petrochemical industry.\n
Full text: GE reported a 6.1% gain in revenue for the first three months of 2016, but profit declines in units making locomotives, power turbines and oil-industry equipment hurt its bottom line. Chief Executive Jeff Immelt said the conglomerate's diversity enabled it to withstand a "very challenging environment," especially in the oil and gas business. The company maintained its annual guidance for investors but lowered its outlook for the oil unit, saying its operating profit could fall 30% over the course of 2016 on as much as a 20% drop in revenue. "Diversity is a key strength during this period of volatility," Mr. Immelt said on a conference call. "Most of the portfolio is strong, and we're delivering. There's plenty of business out there to achieve our goals." The collapse in crude oil prices has hit GE in the midst of a generational shift at the company. Mr. Immelt is selling off the bulk of GE Capital, the financial services arm that once provided half of GE's profit but became a drag after nearly collapsing during the financial crisis. The exit from the finance business is ahead of schedule, Mr. Immelt said Friday. GE has signed deals for $166 billion of the roughly $200 billion in assets it plans to sell from the unit. GE filed a request to regulators on March 31 that would allow it to shed its designation as a systemically important financial institution and exit supervision by the Federal Reserve. Meanwhile, GE said it is making progress integrating the power-equipment business it bought last year from France's Alstom SA. Profit in the power business, excluding Alstom, fell 28% in the first quarter, but the company expects revenue and earnings to rise in the second half of the year. The company's jet-engine business was strong, with profit up 16% despite a decline in equipment orders. This week, federal regulators issued a safety directive requiring airlines to fix or replace certain GE engine models to prevent ice buildup that could lead the engines to shut down. The gloomy performance of the oil business dominated. GE reported declines across all the unit's product lines, which include compressors, flexible risers and valves. The business has been hardest hit by drop-offs in subsea oil exploration and onshore oil and gas production in the U.S., said Chief Financial Officer Jeffrey Bornstein. "The first quarter was way softer than we expected it to be," Mr. Bornstein said in an interview. The number of active onshore oil rigs in the U.S. slid by 27% in the first quarter, he noted, when GE had expected a drop of half that size for the industry. Profit in the company's oil business fell 37% compared with a year earlier, while equipment orders dropped 70%. For the quarter ended March 31, GE reported an operating profit of $3.3 billion for its core industrial business, down 7% from a year earlier. Overall, GE posted a net loss of $98 million tied largely to discontinued operations, including some within its finance unit. A net loss of $13.57 billion in the year-earlier first quarter reflected an $8.94 billion loss from discontinued operations and a $6.3 billion income-tax provision. Revenue in the latest period rose to $27.85 billion. Oil wasn't as significant a burden on GE rival Honeywell International Inc., which reported a 9% jump in earnings despite a 38% drop in sales in its business unit that makes catalysts and adsorbents for the oil refining and petrochemical industry. Honeywell Chief Financial Officer Thomas Szlosek said demand for gasoline and petrochemicals remains high, which means customers haven't interrupted production cycles to reinvest in plants and refineries. "The customers are running those facilities very hard, not stopping to reload their catalysts," he said in an interview. "The good news is that has to stop some time. The better news is we have a nice backlog of orders." Honeywell booked a first-quarter profit of $1.19 billion. Revenue increased 3.4% to $9.5 billion. Earlier this year, Honeywell held merger talks with United Technologies Corp. but abandoned its pursuit after it was rebuffed by United Technologies. On Friday, Honeywell CEO David Cote told investors that he had moved on: "It's done. It's past. It had its time, and that time has gone." --- Anne Steele and Andy Pasztor contributed to this article. Credit: By Ted Mann
Subject: Net losses; Financial performance; Company reports
Company / organization: Name: General Electric Co; NAICS: 332510, 334290, 334512, 334519
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Apr 23, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783914759
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783914759?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Producers Lock In Once-Snubbed Prices; Oil producers' withdrawal from hedging as prices fell is expected to show up as damage to their first-quarter results
Author: Puko, Timothy; Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Apr 2016: n/a.
Abstract:
Pioneer Natural Resources Co., long considered one of the most active hedgers, has hedge contracts recently valued at $600 million and has taken advantage of the price rally to lock in more, Chief Executive Scott Sheffield said. Hedging meetings at PDC Energy Inc. used to draw five to eight regular attendees, and now 20 people show up to voice opinions on oil prices, from the CEO to engineers, said Gysle Shellum, PDC's chief financial officer.
Full text: U.S. oil producers aren't letting the rally go to waste. In an about-face, companies are using hedges to lock in prices that they turned their noses up at a few months ago. Last September, Energen Corp. officials told investors they would hold out for roughly $60 a barrel before using the futures market to hedge their production. But the company recently said it had locked in about half of its expected 2016 production--or more than 6 million barrels--at around $45. EV Energy Partners LP hedged in recent weeks at prices slightly above $40, even though last spring it opted not to hedge when prices were between $50 and $60, finance chief Nicholas Bobrowski said. "We thought we were smarter than everyone," Mr. Bobrowski said of the missed opportunity. "Lessons learned." Energen declined to comment. Companies that produce oil or gas typically hedge by trading options or futures to guarantee a price for their output. Previously established hedges helped them through much of 2015, but their withdrawal from the market as prices fell to new lows is expected to show up as damage to their earnings when they start reporting first-quarter results this week. Now they are getting a break. Benchmark U.S. oil prices have shot up by more than 65% since hitting a 13-year low in February, giving producers a chance to lock in better prices just as many banks are re-evaluating how much credit to extend to the sector. Oil futures rose 1.3% to $43.73 a barrel Friday in New York, wrapping up the eighth week of gains out of the past 10. While the rally has been sharp, prices are still well below the $60-plus level they occupied a year ago. Hedging now means giving up possible higher prices if oil continues to improve. Producers have pounced anyway--due to pressure from their investors and fear that the rally could be temporary. Saudi Arabia recently walked away from a deal with Russia and other export nations to cap their crude output because Iran wouldn't join them. Their preliminary agreement had been a big support for the rally in oil prices. And U.S. production is hovering around 8.9 million barrels a day, down just 7% from its peak last spring. Pioneer Natural Resources Co., long considered one of the most active hedgers, has hedge contracts recently valued at $600 million and has taken advantage of the price rally to lock in more, Chief Executive Scott Sheffield said. In recent weeks, the company has boosted its hedges for 2017 to cover 50% of its oil production, up from 20%. A lot of producers have been reluctant to hedge, because the timing can be so tricky. Contracts can produce big losses on paper or lead to expensive margin calls when the market moves sharply. Hedging meetings at PDC Energy Inc. used to draw five to eight regular attendees, and now 20 people show up to voice opinions on oil prices, from the CEO to engineers, said Gysle Shellum, PDC's chief financial officer. Despite the uptick in activity, U.S. producers have hedged just 36% of their expected output for 2016, according to Citi Research. In past years, they hedged about half of their production. Continental Resources Inc., one of the biggest U.S. shale drillers, famously closed out most of its oil hedges in late 2014 when oil first traded below $80 a barrel, betting prices would quickly rise again. The decision cost the company tens of millions of dollars as prices continued to plunge. Continental declined to comment. ARM Energy, a firm that helps producers hedge, has been using Continental as a case study in company presentations. It has netted two dozen new clients in the past year as producers have struggled to adapt to a lower-for-longer oil-price environment, President Tom Heath said. While many oil-company executives say prices will continue to rise in coming months, some don't have the financial rope to chance it any longer given oil's wild swings between $26 and $44 a barrel so far this year. The market is so volatile, shale companies are jumping to sell their future output whenever the price pops, said Sameer Panjwani, an associate at Tudor, Pickering, Holt & Co., an energy investment bank in Houston. "You do things when you can, not when you have to," he said. Even with the recent rebound, oil prices are forcing producers into extreme budget cuts and spurring dozens of bankruptcies. Their newfound willingness to sell at lower prices reinforces how dire the financial situation has become for many of America's shale companies. Once optimistic gamblers, many are settling for prices just sufficient to cover basic costs and prove to lenders and investors they can live to fight another day. That task would have been easier if these companies had hedged more proactively a year ago. "Right now, we're behind," said Thomas Jorden, chief executive of Cimarex Energy Co., which recently hedged more than 1 million barrels of output. Write to Timothy Puko at tim.puko@wsj.com and Erin Ailworth at Erin.Ailworth@wsj.com Credit: By Timothy Puko and Erin Ailworth
Subject: Prices; Investments; Petroleum production; Futures; Crude oil
Location: United States--US
Company / organization: Name: Energen Corp; NAICS: 561210, 221210; Name: Pioneer Natural Resources Co; NAICS: 211111; Name: EV Energy Partners LP; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783738124
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783738124?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The Rise and Deadly Fall of Islamic State's Oil Tycoon; A document trove tells how Abu Sayyaf ran the terror group's operations; approving expenses for slaves, dodging U.S. airstrikes
Author: Faucon, Benoit; Coker, Margaret
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Apr 2016: n/a.
Abstract:
Accounting for Terror An investigation into terrorism finance and the battle to shut it down * Blacklisted Terrorism Financiers Still Active * Cautious Banks Hinder Charity Financing (March 30, 2016) * Losing Count: U.S. Terror Rules Drive Money Underground (March 30, 2016) * How Islamic State's Secret Banking Network Prospers (Feb. 24, 2016) Defense Secretary Ash Carter called the May 16, 2015, raid a "significant blow" against Islamic State and heralded the death of Abu Sayyaf, the terror group's No. 2 oil executive.
Full text: Islamic State oil man Abu Sayyaf was riding high a year ago. With little industry experience, he had built a network of traders and wholesalers of Syrian oil that at one point helped triple energy revenues for his terrorist bosses. His days carried challenges familiar to all oil executives--increasing production, improving client relations and dodging directives from headquarters. He also had duties unique to the extremist group, including approving expenses to cover the upkeep of slaves, rebuilding oil facilities damaged by U.S. airstrikes and counting towers of cash. Last May, U.S. Special Forces killed Abu Sayyaf, a nom de guerre, at his compound in Syria's Deir Ezzour province. The raid also captured a trove of proprietary data that explains how Islamic State became the world's wealthiest terror group. Documents reviewed by The Wall Street Journal describe the terror group's construction of a multinational oil operation with help from officious terror-group executives obsessed with maximizing profits. They show how the organization deals with the Syrian regime, handles corruption allegations among top officials, and, most critically, how international coalition strikes have dented but not destroyed Islamic State's income. Accounting for Terror An investigation into terrorism finance and the battle to shut it down * Blacklisted Terrorism Financiers Still Active * Cautious Banks Hinder Charity Financing (March 30, 2016) * Losing Count: U.S. Terror Rules Drive Money Underground (March 30, 2016) * How Islamic State's Secret Banking Network Prospers (Feb. 24, 2016) Defense Secretary Ash Carter called the May 16, 2015, raid a "significant blow" against Islamic State and heralded the death of Abu Sayyaf, the terror group's No. 2 oil executive. In the 11 months since, U.S. and allied forces have launched hundreds more strikes against terrorist-controlled oil facilities and killed dozens of militants working in Islamic State's oil and finance business. U.S. officials estimate that at least 30% of the group's oil infrastructure has been destroyed, and taxes have replaced oil as the group's largest profit center. Daily oil sales in Syria and Iraq, though fallen, still total nearly $1 million. Two former Islamic State oil managers said the corporate structures created by Abu Sayyaf remained intact, including deals with businessmen linked to the Syrian regime. Spreadsheets and Excel files show that Abu Sayyaf's division contributed 72% of the $289.5 million in total Islamic State natural-resource revenues over the six months that ended in late February 2015. The documents reviewed by the Journal represent only a portion of the files recovered in last year's raid, which U.S. officials said has been useful for intelligence and military operations. This account of how Abu Sayyaf built and operated his division of Islamic State's oil business is based on the documents and interviews with five people familiar with him and his Syrian operation. Turning to terror Abu Sayyaf was born in a working-class neighborhood of the Tunisian capital Tunis in the early 1980s and named Fathi Ben Awn al-Murad al Tunisi. How he became an extremist is unclear. He left for Iraq after dictator Saddam Hussein was toppled in 2003 by U.S. forces and joined the jihadist group then known as al Qaeda in Iraq. Its goal was to repel U.S. troops and fight the Shiite-led government that took over Iraq. In 2010, Abu Sayyaf married an Iraqi woman from a family also involved in the anti-American jihad. He took the name Abu Sayyaf al-Iraqi--literally, father of the sword bearer--reflecting his close ties with the jihad movement in Iraq and the nucleus of Iraq's Sunni militants that included Abu Bakr al-Baghdadi, founder of Islamic State. Islamic State had seized many of Syria's best-producing oil fields and created its oil ministry known as the Diwan of Natural Resources by the time Mr. Baghdadi declared his so-called caliphate in June 2014. Their lightning advance overwhelmed other rebel groups that shared control of Syrian oil territory. The terror group had crushed the Iraqi army to take oil fields and territory around Mosul, Iraq's second-largest city. The head of the oil ministry, an Iraqi known as Haji Hamid, put Abu Sayyaf in charge of Syria's best oil-producing provinces, Deir Ezzour and al Hakasah. Abu Sayyaf's 152 employees included managers from oil-producing Arab-speaking countries who had joined the extremist group: a Saudi, who managed the top-producing fields; an Iraqi, who ran oil-field maintenance; an Algerian responsible for refinery development; and a Tunisian, who was in charge of refinery operations. Abu Sayyaf set up his headquarters at the giant al-Omar field in Deir Ezzour, which was previously run by Anglo-Dutch major Royal Dutch Shell PLC. Islamic State moved swiftly to expand sales to friendly Iraqi and Syrian traders. It began accepting dollars instead of the Syrian pound, making it easier for the terror group to transfer funds abroad and pay for imported goods through its international network of money changers. Syria's state-controlled system of marketing oil to international buyers through pipelines and oil tankers was replaced by a cottage industry of small smugglers who bought oil at the fields and ferried it away by truck. Islamic State retained many Syrian oil-industry veterans, in part by paying high salaries. Two workers at Abu Sayyaf's operations said in interviews that experienced people were paid handsomely--from $160 a month for an accountant to $400 for a drilling technician, compared with Syria's average monthly wage of $50. Islamic State's treasury, known as Beit al-Mal, based pay on the number of dependents and slaves a worker had. Everyone was afraid of Islamic State, said Ibrahim, a 36-year-old former oil worker. "Local tribes used to fight over the fields," he said, but now all submit to the terror group. Islamic State oil managers demanded cash payments from traders buying their crude, with security supervisors deciding who was trustworthy enough to count the money. They were warned against transferring funds via banks for fear Western intelligence agents would intercept the financial information. Abu Sayyaf created a regimented, compartmentalized work environment unusual for the region. Syrian workers had long relied on social and family contacts to retain plum positions. Under Islamic State rule, foreigners supervised their work. Such tasks as accounting were assigned to two Islamic State operatives from outside the region to discourage embezzlement. The responsibilities of Abu Sayyaf extended beyond oil. In September 2014, he was given custody of Kayla Mueller, a kidnapped American aid worker. Ms. Mueller, who had been sexually abused by Mr. Baghdadi after being taken hostage in 2013, was killed about five months later, U.S. officials said. Abu Sayyaf was a strict and unpopular manager, said Ibrahim, who had worked in oil fields under his supervision. Employees were threatened with transfers to Iraq, he said, where they feared oil bosses who were even more extreme. The areas around the fields became scenes of occasional horror, said the drilling technician who fled Syria last year: "You go to work and you find someone beheaded." Under fire At a Sept. 19, 2014, meeting, the United Nations Security Council called for a crackdown on Islamic State's oil business. Five days later, U.S. jets started bombing the group's makeshift refineries in Syria. By mid-October, the U.S.-led coalition reported hundreds of strikes a day against Islamic State, which was increasing its grip on Iraq's Anbar Province and battling for the Syria-Turkey border city of Kobani. Some allied strikes targeted Abu Sayyaf's wells. On Oct. 13, the Pentagon reported hitting oil collection points in Deir Ezzour. He ordered repair crews into action. Memos dated on Oct. 17 from his Saudi deputy provided details of an estimated $500,000 in damage at several oil facilities. His Saudi subordinate, Abu Sarah al-Zahrani, promised that teams would have the wells up and running within four to 14 days. Workers had to fortify derricks and fix broken valves and pipes. In follow-up memos, Mr. Zahrani provided photos of the repairs, including jury-rigged pumps and hoses. The allied bombardments forced attention on security. Islamic State bureaucrats in the Syrian city of Raqqa, its administrative headquarters, ordered militants to stop using communication devices equipped with GPS trackers. Abu Sayyaf's work brought tangible results. For the Islamic State monthly budget running from Oct. 25 to Nov. 23, 2014, his division reported $40.7 million in revenue, a 59% increase over the previous month. Monthly totals topped $40 million for each of the next two reporting months. Internal affairs By the end of 2014, Abu Sayyaf was facing pressure from inside Islamic State, which was struggling to build a promised religious utopia. People in Islamic State-controlled territory complained about high fuel prices, and Abu Sayyaf was ordered to keep a lid on prices and boost margins on oil sales, the terror group's largest income source at the time. In one memo, Islamic State's General Governance Committee demanded a 10% cap on profits by fuel traders. Another memo from central command demanded that Islamic State's oil ministry work with the local governor to set oil prices in al Hasakah, a district under Abu Sayyaf's control. Oil sellers, in turn, launched their own revolt. Angry over moves to slice profit margins, they alleged that Islamic State officials, including Abu Sayyaf, overcharged them and embezzled the money. Abu Sayyaf set different prices for crude from different fields, depending on quality. For example, the average price a barrel in November 2014 at the al-Tanak field in Deir Ezzour ranged from $32 to $41, according to a spreadsheet seized by U.S. forces. Prices at the al-Omar and al-Milh fields, meanwhile, ranged from $50 to $70 a barrel around that time. Oil buyers believed Islamic State gave some traders preferential treatment. The complaints reached Abu Sayyaf's boss. A memo dated Dec. 22, 2014, from Islamic State's oil ministry admonished employees in the field to maintain fair trade rules, including not allowing favored traders to cut in line at the oil fields. Video recordings recovered from the raid appear to be part of an investigation of Abu Sayyaf at the time. Videos show interviews with oil tanker drivers at the al-Omar and al-Milh fields, and Islamic State officials talking about procedures for pricing and purchasing oil. One of the videos, recorded in January 2015, shows two lines of approximately 500 trucks waiting to purchase crude at the al-Omar field. A second video shows a high-ranking Islamic State official, identified as Abu Ubaydah, talking with truck drivers, traders and Islamic State officials there. Drivers in the video complained that local Islamic State managers ran a two-tier pricing system: Drivers willing to pay higher prices--between $60 to $70 a barrel--moved to a priority loading lane, with little or no waiting. The $50-a-barrel line had a long wait. Islamic State at the time was undercutting international oil prices, which were still about $80 a barrel. The loaded trucks left oil fields bound for either local makeshift refineries, buyers in Syrian government-held territory or the extremist-held city of Mosul in Iraq, according to Islamic State workers in the area. Discounted prices at Islamic State fields left room for sizable profits. In the recording, Mr. Ubaydah told the drivers there was no corruption scheme and that Islamic State wasn't driving up prices. He blamed the secondary fuel market in Syria where traders resold their loads. "We provided very low prices, but you all increased your prices at the auction, [so] we increased our prices, too," he told the drivers on the video. "We are the people," one trucker said, "but you are ISIL." "It's true that we are ISIL, but you are the one who are raising your prices against all Muslims," Mr. Ubaydah said. A report from Islamic State's General Governance Committee dated Feb. 24, 2015, concluded there was no corruption and cleared Abu Sayyaf. He didn't have time to savor the victory. Global oil prices were falling. For the month ending on Feb. 20, 2015, his oil division revenues fell 24% from the previous month to $33 million. Abu Sayyaf and his team focused on a new mission: finding investment capital to open operations at wells left inactive because of a labor shortage. Memo No. 156 dated Feb. 11, 2015, from Islamic State's treasury to Abu Sayyaf's boss requested guidance on establishing investment relationships with businessmen linked to the regime of Syrian President Bashar al-Assad. The document said the terror group already had agreements allowing trucks and pipeline transit from regime-controlled fields through Islamic State-controlled territory. In the early hours of May 16, U.S. Special Forces flew from a military base in Iraq to al-Omar. U.S. forces killed several armed Islamic State guards outside his compound, U.S. officials said, and then fatally shot the Tunisian. "The operation represents another significant blow to ISIL, and it is a reminder that the United States will never waver in denying safe haven to terrorists who threaten our citizens, and those of our friends and allies," Defense Secretary Carter said that day. In September 2015, the U.S. Treasury placed Abu Sayyaf's boss, Haji Hamid, on a terror-sanctions list, and, four months later, Abu Sayyaf's Saudi deputy. This spring, Islamic State oil wells pump at reduced capacity. In March, a baby-faced French jihadist called Abu Mohammad al-Fransi took over some of Abu Sayyaf's duties as a senior accountant of Syrian oil fields. Write to Benoit Faucon at benoit.faucon@wsj.com and Margaret Coker at margaret.coker@wsj.com Credit: By Benoit Faucon and Margaret Coker
Subject: Hostages; Paramilitary groups; Terrorism; Extremism; Militancy
Location: United States--US Syria Iraq
People: Hassoun, Adham Amin (Abu Sayyaf) Carter, Ashton
Company / organization: Name: Islamic State of Iraq & the Levant--ISIS; NAICS: 813940
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 24, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783816196
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783816196?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Exxon Runs Low on Fuel
Author: Kingsbury, Kevin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Apr 2016: n/a.
Abstract:
If things end up being even worse than Wall Street predicts, keep in mind that Exxon last reported less than $1 billion of earnings in the second quarter of 1994; they came in at $885 million. $1.29 billion The amount analysts expect Exxon Mobil Corp. to log in first-quarter earnings, which would be its lowest quarterly profit since the merger of Exxon Corp. and Mobil Corp. in 1999 Credit: By Kevin Kingsbury
Full text: How the mighty oil giants have fallen. Exxon Mobil Corp. generated plenty of headlines earlier this decade when it was posting quarterly profits in excess of $10 billion. But those records are a distant memory in the wake of oil's price tumble. Exxon, the industry's biggest publicly traded company, on Friday is projected to post its smallest quarterly earnings this century. Analysts expect Exxon to report first-quarter net income of $1.29 billion, according to consensus analyst estimates from Thomson Reuters. Exxon hasn't logged a sub-$2 billion profit since the third quarter of 1999, when it posted $1.5 billion. That November, Exxon's merger with Mobil was completed. The first quarter should be Exxon's earnings trough, according to analysts' projections. Oil prices have rebounded sharply from this winter's 13-year low. Of course, many on Wall Street predicted that the first half of 2015 would be the earnings trough for energy companies as well. If things end up being even worse than Wall Street predicts, keep in mind that Exxon last reported less than $1 billion of earnings in the second quarter of 1994; they came in at $885 million. $1.29 billion The amount analysts expect Exxon Mobil Corp. to log in first-quarter earnings, which would be its lowest quarterly profit since the merger of Exxon Corp. and Mobil Corp. in 1999 Credit: By Kevin Kingsbury
Subject: Profits; Earnings; Financial performance
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783849190
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783849190?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
BP Reports First-Quarter Pretax Loss; Energy giant sees a loss for second consecutive quarter as low oil prices affect financial performance
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Apr 2016: n/a.
Abstract:
The company's earnings suffered as the oil sector continues to struggle with a near two-year slump in crude prices that has forced steep spending cuts and hammered profits.
Full text: LONDON--BP PLC reported a loss for the second consecutive quarter Tuesday, as low oil prices continue to buffet the company's financial performance. British energy giant BP said its replacement cost loss--a number analogous to the net income that U.S. oil companies report--was $485 million, compared with a profit of $2.1 billion a year earlier. However, stripping out one-off items such as proceeds from sales and impairment charges, the company's underlying earnings of $532 million significantly beat analysts' consensus of $140 million loss. "Despite the challenging environment, we are driving toward our near-term goal of rebalancing BP's cash flows," Chief Executive Bob Dudley said. "Operational performance is strong and our work to reset costs has considerable momentum and is delivering results." The company's earnings suffered as the oil sector continues to struggle with a near two-year slump in crude prices that has forced steep spending cuts and hammered profits. In the first quarter of 2016, Brent oil prices averaged $34 a barrel, compared with $54 a barrel in the same period a year earlier. Refining margins were at their lowest quarterly average for over five years. Corrections & Amplifications Brent oil prices in the first quarter of 2016 averaged $34 a barrel. An earlier version of this article incorrectly stated the time period as the first quarter of 2015. (April 26, 2016) Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Financial performance; Losses; Crude oil prices
Location: United States--US
People: Dudley, Bob
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 24, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784028142
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784028142?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Lower on Profit-Taking; June Brent crude on London's ICE Futures exchange fell $0.54 to $44.57 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
In the absence of a production-freeze deal between Russia and the Organization of the Petroleum Exporting Countries, oil prices still rose by nearly 5% last week, underpinned by hopes that declining production in non-OPEC countries would help moderate the surplus in the market.
Full text: Crude oil prices pared gains in early Asia trade Monday as traders took profit after a strong rally last week on signs that the global oil glut might start to ease in the coming months. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $43.09 a barrel at 0151 GMT, down $0.64 in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell $0.54 to $44.57 a barrel. "Prices are down on profit-taking. Without any major news or catalysts, prices are going to seesaw in the near term," said Gao Jian, an oil analyst at Shandong-based SCI International. In the absence of a production-freeze deal between Russia and the Organization of the Petroleum Exporting Countries, oil prices still rose by nearly 5% last week, underpinned by hopes that declining production in non-OPEC countries would help moderate the surplus in the market. The International Energy Agency expects waning output from the U.S., China, Russia, Mexico, and Colombia to reset the supply-and-demand balance next year and that prices will gradually pick up in 2018. Analysts at Bernstein Research paint a more optimistic picture, estimating a rebalance by the second half of this year as prolonged low prices stimulate more demand. "As inventories start to drop, this should push prices toward the marginal cost of production," said Neil Beveridge, senior analyst at the firm. The firm believes a $60-a-barrel oil price is required to balance the market over the longer term. On the demand side, China's slowing economy and the rise of renewable energy pose headwinds, but demand growth for oil is still expected. The IEA forecasts global oil-demand growth to moderate to around 1.2 million barrels a day in 2016, slower than the 1.8 million-barrels-a-day expansion last year. This week, traders will be eyeing the Federal Reserve policy meeting on Wednesday for an outlook on the U.S. economy. The market largely expects the committee to keep the benchmark rate unchanged. The Energy Information Administration will also release weekly U.S. crude inventories and production data for the week ended April 22 on Wednesday. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--fell 119 points to $1.5190 a gallon, while May diesel traded at $1.2991, 98 points lower. ICE gas oil for May changed hands at $389.00 a metric ton, down $6.75 from Friday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Supply & demand; Profits; Inventory
Location: United States--US Russia China Asia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783830672
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783830672?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Cheap Oil Doesn't Light Fire for Big Japanese Utility; Osaka Gas's role as an energy investor, rather than user, leaves it exposed to oil prices
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
Osaka Gas, one of Japan's largest suppliers of natural gas, imports liquefied natural gas that is often linked to oil prices.
Full text: Like most energy importers, Japan's gas utilities have enjoyed the collapse in crude oil prices. Yet the market is understating the risks at one utility, including its duplicate role as an energy investor. Osaka Gas, one of Japan's largest suppliers of natural gas, imports liquefied natural gas that is often linked to oil prices. Though the utility passes on lower costs to customers, this comes with a lag, the effect of which is even more powerful if crude oil keeps falling. In the December quarter, Osaka Gas reported a 55.4% increase in net profit from the year before, despite a 10.5% decrease in sales. But while a sustainable oil rebound may be unlikely , neither may there be much room for it to continue falling . As some producers cut back, Brent futures are pricing a slight rise later this year. The yen's rise against the dollar since February, thanks to a flight to safety, might counteract a potential rise in oil by cheapening imports. The sentiment behind such risk aversion could easily reverse, as it has in recent days with the yen weakening sharply. That could continue especially if Japan's aggressive central bank finds new ways to ease. Another problem is the equity stakes Osaka Gas took in LNG projects such as Gorgon and Ichthys in Australia during the commodity boom years. These are among the most expensive LNG projects in the world, and may be unable to generate commercial returns at today's prices. Osaka Gas may be forced to take impairments. It last wrote down the value of a U.S. shale project in the December 2013 quarter, before oil began falling. The company has sunk 300 billion yen ($2.7 billion) in all in overseas energy projects since 2009, equivalent to a third of shareholder equity as of December. It plans to continue investing overseas, says Moody's, a worrisome prospect at today's prices. Back home, next year's deregulation in gas utilities could pressure the firm, too. If competitors muscle into the gas market--all eyes are on power company Kansai Electric that also operates in the Osaka region--both sales volumes and tariffs could fall. Osaka Gas's 15.6 times forward earnings, above both its five-year average of 12.9 times and its peer Tokyo Gas's current 14.4 times, then looks expensive. Expect the air to come out of this gas stock. Write to Abheek Bhattacharya at abheek.bhattacharya@wsj.com Credit: By Abheek Bhattacharya
Subject: Crude oil prices; LNG; Crude oil; Natural gas utilities
Location: Japan
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783840249
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783840249?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Fur ther reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Moving the Market -- MoneyBeat: Exxon Runs Low on Fuel
Author: Kingsbury, Kevin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Apr 2016: C.2.
Abstract:
Analysts expect Exxon to report first-quarter net income of $1.29 billion, according to consensus analyst estimates from Thomson Reuters.
Full text: How the mighty oil giants have fallen. Exxon Mobil Corp. generated plenty of headlines earlier this decade when it was posting quarterly profits in excess of $10 billion. But those records are a distant memory in the wake of oil's price tumble. Exxon, the industry's biggest publicly traded company, on Friday is projected to post its smallest quarterly earnings this century. Analysts expect Exxon to report first-quarter net income of $1.29 billion, according to consensus analyst estimates from Thomson Reuters. Exxon hasn't logged a sub-$2 billion profit since the third quarter of 1999, when it posted $1.5 billion. That November, Exxon's merger with Mobil was completed. The first quarter should be Exxon's earnings trough, according to analysts' projections. Oil prices have rebounded sharply from this winter's 13-year low. Of course, many on Wall Street predicted that the first half of 2015 would be the earnings trough for energy companies as well. If things end up being even worse than Wall Street predicts, keep in mind that Exxon last reported less than $1 billion of earnings in the second quarter of 1994; they came in at $885 million. Credit: By Kevin Kingsbury
Subject: Financial performance; Earnings forecasting
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.2
Publication year: 2016
Publication date: Apr 25, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783848462
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783848462?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Cheap Oil Shaved $390 Billion From Mideast Economies in 2015, IMF Says; Oil-dependent Mideast nations face up to $150 billion in losses this year
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
Mr. Ahmed of the IMF describes the Gulf's response to the low oil prices as "quite determined" but calls on these countries to abandon the economic model whereby the state is the biggest provider of jobs in favor of a system where the private sector plays a bigger role in creating jobs.
Full text: DUBAI--The International Monetary Fund estimates the Middle East's oil-dependent economies have missed out on $390 billion in oil revenues last year alone and face up to $150 billion in income losses this year as a result of cheap oil prices. The drop in revenues stemming from the export of oil is the direct result of the plunge in crude prices from around $115 a barrel in the middle of 2014 to below $30 at the start of the year and now above $40, the IMF said. The loss in potential revenues has put an enormous strain on the economies of major oil exporters such as Saudi Arabia and Kuwait who have posted massive budget deficits in the past year. The IMF had previously calculated that the declining energy prices would erase around $360 billion in oil receipts. To overcome these gaping budget deficits, Persian Gulf countries have introduced a raft of measures ranging from cutting energy subsidies to raising taxes. Some, such as Saudi Arabia, have also burned through their foreign reserves or started to borrow internationally to ease the fiscal pressures. "2016 is year number two in a multi-year adjustment process to reach balanced budgets," said Masood Ahmed, director of the IMF's Middle East and Central Asia Department. "Probably another four to five years of action will be needed both on spending and on revenues before reaching a comfortable fiscal situation for many countries," he said. Economic growth for the region's oil exporters is set to rise to 3% in 2016 from 2% last year but that is mainly due to the improved prospects of Iraq, which increased oil production, and Iran, which is looking to benefit from the gradual lifting of sanctions, the IMF said. For the oil-rich Persian Gulf countries, economic activity is expected to further slow as governments are cutting spending to rein in widening budget deficits. Mr. Ahmed of the IMF describes the Gulf's response to the low oil prices as "quite determined" but calls on these countries to abandon the economic model whereby the state is the biggest provider of jobs in favor of a system where the private sector plays a bigger role in creating jobs. He cites the examples of Malaysia, Indonesia and Chile as countries which have successfully reduced their dependence on energy resources. The IMF estimates that the oil exporting countries in the Middle East will see 10 million young people being added to the workforce in the next five years. Mr. Ahmed warns that the current pace of job creation is insufficient to absorb the new labor market entrants. "If jobs continue to be created at the same rate as in the last few years, you will end up with 3 million (additional) unemployed by the end of this five-year period," Mr. Ahmed said. The IMF estimates average youth unemployment to be around 20% in the region. "The model that we need to go to is one where not all the nationals look for work in the public sector and the state is not just a primary provider of jobs," Mr. Ahmed said. Write to Nicolas Parasie at nicolas.parasie@wsj.com Credit: By Nicolas Parasie
Subject: Economic models; Budget deficits; Crude oil prices; Petroleum production
Location: Kuwait Middle East Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783853108
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783853108?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Firms Lock In Current Prices
Author: Puko, Timothy; Ailworth, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Apr 2016: C.1.
Abstract:
Pioneer Natural Resources Co., long considered one of the most active hedgers, has hedge contracts recently valued at $600 million and has taken advantage of the price rally to lock in more, Chief Executive Scott Sheffield said. Hedging meetings at PDC Energy Inc. used to draw five to eight regular attendees, and now 20 people show up to voice opinions on oil prices, from the CEO to engineers, said Gysle Shellum, PDC's chief financial officer.
Full text: U.S. oil producers aren't letting the rally go to waste. In an about-face, companies are using hedges to lock in prices that they turned their noses up at a few months ago. Last September, Energen Corp. officials told investors they would hold out for roughly $60 a barrel before using the futures market to hedge their production. But the company recently said it had locked in about half of its expected 2016 production -- or more than 6 million barrels -- at around $45. EV Energy Partners LP hedged in recent weeks at prices slightly above $40, even though last spring it opted not to hedge when prices were between $50 and $60, finance chief Nicholas Bobrowski said. "We thought we were smarter than everyone," Mr. Bobrowski said of the missed opportunity. "Lessons learned." Energen declined to comment. Companies that produce oil or gas typically hedge by trading options or futures to guarantee a price for their output. Previously established hedges helped them through much of 2015, but their withdrawal from the market as prices fell to new lows is expected to show up as damage to their earnings when they start reporting first-quarter results this week. Now, they are getting a break. Benchmark U.S. oil prices have shot up by more than 65% since hitting a 13-year low in February, giving producers a chance to lock in better prices just as many banks are re-evaluating how much credit to extend to the sector. Oil futures rose 1.3% to $43.73 a barrel Friday in New York, wrapping up the eighth week of gains out of the past 10. While the rally has been sharp, prices are still well below the $60-plus level they occupied a year ago. Hedging now means giving up possible higher prices if oil continues to improve. Producers have pounced anyway -- due to pressure from their investors and fear that the rally could be temporary. Saudi Arabia recently walked away from a deal with Russia and other export nations to cap their crude output because Iran wouldn't join them. Their preliminary agreement had been a big support for the rally in oil prices. And U.S. production is hovering around 8.9 million barrels a day, down just 7% from its peak last spring. Pioneer Natural Resources Co., long considered one of the most active hedgers, has hedge contracts recently valued at $600 million and has taken advantage of the price rally to lock in more, Chief Executive Scott Sheffield said. In recent weeks, the company has boosted its hedges for 2017 to cover 50% of its oil production, up from 20%. A lot of producers have been reluctant to hedge, because the timing can be so tricky. Contracts can produce big losses on paper or lead to expensive margin calls when the market moves sharply. Hedging meetings at PDC Energy Inc. used to draw five to eight regular attendees, and now 20 people show up to voice opinions on oil prices, from the CEO to engineers, said Gysle Shellum, PDC's chief financial officer. Despite the uptick in activity, U.S. producers have hedged just 36% of their expected output for 2016, according to Citi Research. In past years, they hedged about half of their production. Continental Resources Inc., one of the biggest U.S. shale drillers, famously closed out most of its oil hedges in late 2014 when oil first traded below $80 a barrel, betting prices would quickly rise again. The decision cost the company tens of millions of dollars as prices continued to plunge. Continental declined to comment. ARM Energy, a firm that helps producers hedge, has been using Continental as a case study in company presentations. It has netted two dozen new clients in the past year as producers have struggled to adapt to a lower-for-longer oil-price environment, President Tom Heath said. While many oil-company executives say prices will continue to rise in coming months, some don't have the financial rope to chance it any longer given oil's wild swings between $26 and $44 a barrel so far this year. The market is so volatile, shale companies are jumping to sell their future output whenever the price pops, said Sameer Panjwani, an associate at Tudor, Pickering, Holt & Co., an energy investment bank in Houston. "You do things when you can, not when you have to," he said. Even with the recent rebound, oil prices are forcing producers into extreme budget cuts and spurring dozens of bankruptcies. Their newfound willingness to sell at lower prices reinforces how dire the financial situation has become for many of America's shale companies. Once optimistic gamblers, many are settling for prices just sufficient to cover basic costs and prove to lenders and investors they can live to fight another day. That task would have been easier if these companies had hedged more proactively a year ago. "Right now, we're behind," said Thomas Jorden, chief executive of Cimarex Energy Co., which recently hedged more than 1 million barrels of output. Credit: By Timothy Puko and Erin Ailworth
Subject: Investments; Petroleum production; Futures trading; Crude oil prices
Location: United States--US
Company / organization: Name: Pioneer Natural Resources Co; NAICS: 211111; Name: EV Energy Partners LP; NAICS: 211111; Name: Energen Corp; NAICS: 561210, 221210; Name: Continental Resources Inc; NAICS: 211111
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Str eet Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 25, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783864172
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783864172?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Islamic State's Oil Tycoon --- Documents show how man killed by U.S. Special Forces helped build group's multinational operation
Author: Faucon, Benoit; Coker, Margaret
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Apr 2016: A.1.
Abstract:
Abu Sayyaf's 152 employees included managers from oil-producing Arab-speaking countries who had joined the extremist group: a Saudi, who managed the top-producing fields; an Iraqi, who ran oil-field maintenance; an Algerian responsible for refinery development; and a Tunisian, who was in charge of refinery operations.
Full text: Islamic State oil man Abu Sayyaf was riding high a year ago. With little industry experience, he had built a network of traders and wholesalers of Syrian oil that at one point helped triple energy revenues for his terrorist bosses. His days carried challenges familiar to all oil executives -- increasing production, improving client relations and dodging directives from headquarters. He also had duties unique to the extremist group, including approving expenses to cover the upkeep of slaves, rebuilding oil facilities damaged by U.S. airstrikes and counting towers of cash. Last May, U.S. Special Forces killed Abu Sayyaf, a nom de guerre, at his compound in Syria's Deir Ezzour province. The raid also captured a trove of proprietary data that explains how Islamic State became the world's wealthiest terror group. Documents reviewed by The Wall Street Journal describe the terror group's construction of a multinational oil operation with help from officious terror-group executives obsessed with maximizing profits. They show how the organization deals with the Syrian regime, handles corruption allegations among top officials, and, most critically, how international coalition strikes have dented but not destroyed Islamic State's income. Defense Secretary Ash Carter called the May 16, 2015, raid a "significant blow" against Islamic State and heralded the death of Abu Sayyaf, the terror group's No. 2 oil executive. In the 11 months since, U.S. and allied forces have launched hundreds more strikes against terrorist-controlled oilfacilities and killed dozens of militants working in Islamic State's oiland finance business. U.S. officials estimate that at least 30% of the group's oilinfrastructure has been destroyed, and taxes have replaced oil as the group's largest profit center. Daily oil sales in Syria and Iraq, though fallen, still total nearly $1 million. Two former Islamic State oil managers said the corporate structures created by Abu Sayyaf remained intact, including deals with businessmen linked to the Syrian regime. Spreadsheets and Excel files show that Abu Sayyaf's division contributed 72% of the $289.5 million in total Islamic State natural-resource revenues over the six months that ended in late February 2015. The documents reviewed by the Journal represent only a portion of the files recovered in last year's raid, which U.S. officials said has been useful for intelligence and military operations. This account of how Abu Sayyaf built and operated his division of Islamic State's oil business is based on the documents and interviews with five people familiar with him and his Syrian operation. Abu Sayyaf was born in a working-class neighborhood of the Tunisian capital Tunis in the early 1980s and named Fathi Ben Awn al-Murad al Tunisi. How he became an extremist is unclear. He left for Iraq after dictator Saddam Hussein was toppled in 2003 by U.S. forces and joined the jihadist group then known as al Qaeda in Iraq. Its goal was to repel U.S. troops and fight the Shiite-led government that took over Iraq. In 2010, Abu Sayyaf married an Iraqi woman from a family also involved in the anti-American jihad. He took the name Abu Sayyaf al-Iraqi -- literally, father of the sword bearer -- reflecting his close ties with the jihad movement in Iraq and the nucleus of Iraq's Sunni militants that included Abu Bakr al-Baghdadi, founder of Islamic State. Islamic State had seized many of Syria's best-producing oil fields and created its oil ministry known as the Diwan of Natural Resources by the time Mr. Baghdadi declared his so-called caliphate in June 2014. Their lightning advance overwhelmed other rebel groups that shared control of Syrian oil territory. The terror group had crushed the Iraqi army to take oil fields and territory around Mosul, Iraq's second-largest city. The head of the oil ministry, an Iraqi known as Haji Hamid, put Abu Sayyaf in charge of Syria's best oil-producing provinces, Deir Ezzour and al Hakasah. Abu Sayyaf's 152 employees included managers from oil-producing Arab-speaking countries who had joined the extremist group: a Saudi, who managed the top-producing fields; an Iraqi, who ran oil-field maintenance; an Algerian responsible for refinery development; and a Tunisian, who was in charge of refinery operations. Abu Sayyaf set up his headquarters at the giant al-Omar field in Deir Ezzour, which was previously run by Anglo-Dutch major Royal Dutch Shell PLC. Islamic State moved swiftly to expand sales to friendly Iraqi and Syrian traders. It began accepting dollars instead of the Syrian pound, making it easier for the terror group to transfer funds abroad and pay for imported goods through its international network of money changers. Syria's state-controlled system of marketing oil to international buyers through pipelines and oil tankers was replaced by a cottage industry of small smugglers who bought oil at the fields and ferried it away by truck. Islamic State retained many Syrian oil-industry veterans, in part by paying high salaries. Two workers at Abu Sayyaf's operations said in interviews that experienced people were paid handsomely -- from $160 a month for an accountant to $400 for a drilling technician, compared with Syria's average monthly wage of $50. Islamic State's treasury, known as Beit al-Mal, based pay on the number of dependents and slaves a worker had. Everyone was afraid of Islamic State, said Ibrahim, a 36-year-oldformer oilworker. "Local tribes used to fight over the fields," he said, but now all submit to the terror group. Islamic State oil managers demanded cash payments from traders buying their crude, with security supervisors deciding who was trustworthy enough to count the money. They were warned against transferring funds via banks for fear Western intelligence agents would intercept the financial information. Abu Sayyaf created a regimented, compartmentalized work environment unusual for the region. Syrian workers had long relied on social and family contacts to retain plum positions. Under Islamic State rule, foreigners supervised their work. Such tasks as accounting were assigned to two Islamic State operatives from outside the region to discourage embezzlement. The responsibilities of Abu Sayyaf extended beyond oil. In September 2014, he was given custody of Kayla Mueller, a kidnapped American aid worker. Ms. Mueller, who had been sexually abused by Mr. Baghdadi after being taken hostage in 2013, was killed about five months later, U.S. officials said. Abu Sayyaf was a strict and unpopular manager, said Ibrahim, who had worked in oil fields under his supervision. Employees were threatened with transfers to Iraq, he said, where they feared oil bosses who were even more extreme. The areas around the fields became scenes of occasional horror, said the drilling technician who fled Syria last year: "You go to work and you find someone beheaded." At a Sept. 19, 2014, meeting, the United Nations Security Council called for a crackdown on Islamic State's oil business. Five days later, U.S. jets started bombing the group's makeshift refineries in Syria. By mid-October, the U.S.-led coalition reported hundreds of strikes a day against Islamic State, which was increasing its grip on Iraq's Anbar Province and battling for the Syria-Turkey border city of Kobani. Some allied strikes targeted Abu Sayyaf's wells. OnOct. 13, the Pentagon reported hitting oil collection points in Deir Ezzour. He ordered repair crews into action. Memos dated on Oct. 17 from his Saudi deputy provided details of an estimated $500,000 in damage at several oil facilities. His Saudi subordinate, Abu Sarah al-Zahrani, promised that teams would have the wells up and running within four to 14 days. Workers had to fortify derricks and fix broken valves and pipes. In follow-up memos, Mr. Zahrani provided photos of the repairs, including jury-rigged pumps and hoses. The allied bombardments forced attention on security. Islamic State bureaucrats in the Syrian city of Raqqa, its administrative headquarters, ordered militants to stop using communication devices equipped with GPS trackers. Abu Sayyaf's work brought tangible results. For the Islamic State monthly budget running from Oct. 25 to Nov. 23, 2014, his division reported $40.7 million in revenue, a 59% increase over the previous month. Monthly totals topped $40 million for each of the next two reporting months. By the end of 2014, Abu Sayyaf was facing pressure from inside Islamic State, which was struggling to build a promised religious utopia. People in Islamic State-controlled territory complained about high fuel prices, and Abu Sayyaf was ordered to keep a lid on prices and boost margins on oil sales, the terror group's largest income source at the time. In one memo, Islamic State's General Governance Committee demanded a 10% cap on profits by fuel traders. Another memo from central command demanded that Islamic State's oil ministry work with the local governor to setoilprices in al Hasakah, a district under Abu Sayyaf's control. Oil sellers, in turn, launched their own revolt. Angry over moves to slice profit margins, they alleged that Islamic State officials, including Abu Sayyaf, overcharged them and embezzled the money. Abu Sayyaf set different prices for crude from different fields, depending on quality. For example, the average price a barrel in November 2014 at the al-Tanak field in Deir Ezzour ranged from $32 to $41, according to a spreadsheet seized by U.S. forces. Prices at the al-Omar and al-Milh fields, meanwhile, ranged from $50 to $70 a barrel around that time. Oil buyers believed Islamic State gave some traders preferential treatment. The complaints reached Abu Sayyaf's boss. A memo dated Dec. 22, 2014, from Islamic State's oil ministry admonished employees in the field to maintain fair trade rules, including not allowing favored traders to cut in line at the oil fields. Credit: By Benoit Faucon and Margaret Coker
Subject: Militancy; Crude oil; Terrorism
Location: Syria Iraq
People: Hassoun, Adham Amin (Abu Sayyaf)
Company / organization: Name: Islamic State of Iraq & the Levant--ISIS; NAICS: 813940
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Apr 25, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783864616
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783864616?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further re production or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Falls on Signs of Rising Supplies; Monday's reversal follows a 5% rally in the market last week to a 4½ month high
Author: Berthelsen, Christian; Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
Oil prices sold off Monday after a private data forecaster reported a jump in stored supplies at the main delivery hub in the U.S. The market chopped around much of the morning in directionless trading, but turned decisively negative after Genscape released a weekly report showing oil inventories in Cushing, Okla., storage tanks rising by about 1.5 million barrels, according to people familiar with the report's contents.
Full text: Oil prices sold off Monday after a private data forecaster reported a jump in stored supplies at the main delivery hub in the U.S. The market chopped around much of the morning in directionless trading, but turned decisively negative after Genscape released a weekly report showing oil inventories in Cushing, Okla., storage tanks rising by about 1.5 million barrels, according to people familiar with the report's contents. Cushing inventories have been declining since hitting a record of nearly 67 million barrels in early March, dropping by about 4% since then, and have fallen for the last two weeks in a row. If the Genscape report is accurate, it could send a bearish signal to a market that has been gaining momentum from evidence of strong demand and hope that the oversupply of oil is beginning to wane. "The market will have to answer for that bloated storage situation," said Robert Yawger, director of the futures division at brokerage Mizuho Securities USA. Official U.S. Energy Department inventory data is scheduled to be released Wednesday. The U.S. oil benchmark ended down 2.5% at $42.64 a barrel on the New York Mercantile Exchange, while the global Brent contract finished 1.4% lower at $44.48 a barrel on the ICE Futures Europe exchange. Monday's reversal follows a 5% rally in the market last week to its highest level since early November. Those gains came amid a strike in Kuwait, since resolved, and hopes that the oil glut will begin to abate, overriding disappointment about the failure of major sovereign producers to agree on a production freeze . Still, the speed at which Iran and Libya ramp up exports this year continues to be a blind spot for the market and could affect the rate of rebalancing. Over the weekend, a company associated with the government running eastern Libya said it was preparing to export its first crude cargo , which could kick-start the country's return to the oil market. Oil exports from Libya have been erratic since the fall of Moammar Gadhafi in 2011. Meanwhile, there were reports that Saudi Arabia planned to expand production at its Shaybah oil field by the end of May, potentially bringing another 250,000 barrels of oil a day onto the market, and that exports from Iraq could hit a new high in April. "Fresh indications of rising production pose a fundamental threat to the oil rally," Citigroup said in a note. In refined product markets, gasoline futures fell 1.2% to $1.5131 a gallon and diesel futures dropped 1.4% to $1.2903 a gallon. Jenny W. Hsu and Benoit Faucon contributed to this article. Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen and Miriam Malek
Subject: Inventory; Exports; Futures
Location: United States--US
People: Qaddafi, Muammar El
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783887760
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783887760?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 20 17-11-23
Database: The Wall Street Journal
Copper Falls With Oil Prices; Industrial metal seesaws between gains and losses in tandem with oil
Author: Yang, Stephanie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
"Having reviewed the most recent China downstream copper demand data, we are yet to find evidence of a permanent turn, albeit we see signs of stabilization," wrote Dane Davis, an analyst at Barclays PLC, in a Monday note.
Full text: Copper prices ended lower Monday after seesawing between gains and losses following fluctuations in the price of U.S. oil. Copper for July delivery settled down 0.6% to $2.2560 a pound on the Comex division of the New York Mercantile Exchange, and traded as high as $2.2750 earlier in the session. Crude oil futures were recently down 2% to $42.88 a barrel, after rising as high as $44.04 a barrel in morning trading. Changes in the price of oil tend to influence copper, as the two commodities are often traded in one basket, with a larger share allocated to oil. The industrial metal has found support from stronger economic data out of China that show signs of recovery in the country's housing and manufacturing sectors. China is the world's largest consumer of copper, accounting for 45% of demand. Trade data for March showed an increase in copper imports into China compared with a year earlier. But some analysts doubt the sustainability of copper's recent gains as sentiment around China has improved. "Having reviewed the most recent China downstream copper demand data, we are yet to find evidence of a permanent turn, albeit we see signs of stabilization," wrote Dane Davis, an analyst at Barclays PLC, in a Monday note. Write to Stephanie Yang at stephanie.yang@wsj.com Credit: By Stephanie Yang
Subject: Crude oil
Location: China United States--US
Company / organization: Name: Barclays PLC; NAICS: 522110, 523110, 551111; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783887775
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783887775?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi Arabia Approves Economic Reform Program; Reduction of government subsidies and other reforms aimed at reducing the kingdom's reliance on oil
Author: Margherita Stancati; Ahmed Al Omran; Stancati, Margherita; Ahmed Al Omran
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
Related * Heard on the Street: The Oil Giant's Known Unknowns * Cheap Oil Shaved $390 Billion From Mideast Economies in 2015, IMF Says * Saudi Aramco to Become Holding Company With Listed Subsidiaries Analysts said it could take Saudi Arabia many years to implement such far-reaching changes and fundamentally transform the economy. Speaking to reporters, he said the project--dubbed "Saudi Vision 2030"--includes plans to sell less than 5% of state-owned oil giant Saudi Arabian Oil Co., known as Saudi Aramco, and transfer ownership of the company to Saudi Arabia's sovereign-wealth fund, the Public Investment Fund, so it can build a war chest for non-oil investments abroad.
Full text: RIYADH--Saudi Arabia unveiled plans to free the kingdom from its dependence on oil revenues, in part by selling a stake in its state-owned oil company and creating the world's largest sovereign-wealth fund. The move represents an ambitious attempt to lay out a new economic trajectory for the country in an era of cheap oil. It is the brainchild of Deputy Crown Prince Mohammed bin Salman, the 30-year-old son of King Salman, who was entrusted by his father to oversee what are likely to be jarring changes in the kingdom. "By 2020, we'll be able to live without oil," Prince Mohammed told Saudi-owned news channel Al Arabiya in an interview aired Monday. A detailed package of reforms included in the plan is expected to be released in six weeks. Related * Heard on the Street: The Oil Giant's Known Unknowns * Cheap Oil Shaved $390 Billion From Mideast Economies in 2015, IMF Says * Saudi Aramco to Become Holding Company With Listed Subsidiaries Analysts said it could take Saudi Arabia many years to implement such far-reaching changes and fundamentally transform the economy. Prince Mohammed on Monday presented a broad overview of what has been billed as the country's most extensive economic shake-up in decades. Speaking to reporters, he said the project--dubbed "Saudi Vision 2030"--includes plans to sell less than 5% of state-owned oil giant Saudi Arabian Oil Co., known as Saudi Aramco, and transfer ownership of the company to Saudi Arabia's sovereign-wealth fund, the Public Investment Fund, so it can build a war chest for non-oil investments abroad. The country will also implement reforms aimed at boosting revenue from non-oil sources, such as tourism and mining. The prince said the reform plan doesn't depend on fluctuations in the price of oil, and it can be achieved even if crude prices fall to around $30 a barrel. Oil has recently traded for around $45 a barrel. He added that the economic transition would be more about making spending more efficient than reducing it. Saudi Arabia isn't the first country in the region to propose long-term economic reform. The United Arab Emirates, Qatar and Kuwait have presented similar plans, though implementation has been slow in some countries. The shift away from oil could fundamentally revise Saudi Arabia's social contract. For decades the ruling monarchy indulged its population with generous spending and asked for no taxes in return. Last year, oil provided 73% of state revenues, which in 2015 totaled about 608 billion riyals ($162 billion). The prince, who also heads Aramco's Supreme Council, its top decision-making body, estimated the company's value between $2 trillion and $3 trillion. That would make Aramco more valuable than Apple Inc., Microsoft Corp., Warren Buffett's Berkshire Hathaway Inc. and Alphabet Inc., parent of Google, combined. Based on those figures, listing 5% of the company could raise $100 to $150 billion. The prince said the company is working with banks on the public offering. "We think Aramco's size is very huge, not just for the Saudi market but even for the international market," the prince said. "So we will open windows, the most important of which is in the American market, to trade in Aramco." With Aramco, Saudi Arabia's Public Investment Fund would dwarf what is currently the world's largest sovereign-wealth fund, Norway's pension fund, which has assets worth around $825 billion, according to the Sovereign Wealth Fund Institute. Prince Mohammed estimated that the Saudi fund will eventually be worth nearly $3 trillion. The swing away from oil is likely to come with requirements for more transparency of Saudi Arabia's economy and companies--one of the prince's stated goals. The moves would draw unprecedented scrutiny to Saudi Arabia's oil assets and its finances more broadly. The plan further empowers the young prince, who rose to a position of almost unchallenged power with his father's ascension last year. The Saudi cabinet, in a statement carried by the official Saudi Press Agency, said the government's economic council--headed by Prince Mohammed--would oversee the implementation of the overhaul. "The plan is intended to develop a new social contract between the Al Saud family and its subjects," says Theodore Karasik, of the Washington-based Gulf States Analytics. "In order to make the plan successful there needs to be unity behind Mohammed bin Salman, both at the local level and at the center." Saudi Arabia is also challenged by demographics, with some two-thirds of the population under 30 years old, which is forcing the monarchy to prioritize job creation to deal with an unemployment rate over 11%. "Progress with reforms and moves to diversify the economy would have been vital, even if the oil prices stayed high," says Monica Malik, chief economist at Abu Dhabi Commercial Bank. "The demographic challenge--the need to create jobs for the youth population--requires non-oil sector development." Prince Mohammed said the government aims to diversify its revenues by opening up to more privatization in areas like health care and education, as well as expanding the country's manufacturing base and investing in alternative energy sources. He also said the kingdom would introduce fees on luxury items, tobacco and sugary drinks. He reiterated the government wouldn't introduce more extensive taxes, a sensitive issue in the Gulf. "Our commitment is clear: We won't impose on the citizen any tax on income, capital or basic goods," the document detailing the plan said. Saudi Arabia's new plan will take time to come into force. "2015 was the year of the quick fix, 2016 is the year of the more organized quick fix, and 2017 will be the year the vision will begin," said Prince Mohammed, in the Al Arabiya interview. He indicated the kingdom's desire to move beyond its ultraconservative image, saying that Saudi Arabia would "open its doors to tourism of all nationalities in line with its tradition and values." Currently, Saudi Arabia doesn't issue tourist visas except to Muslim pilgrims. The prolonged period of cheap oil--which Saudi Arabia has partly shaped by its decision not to curb production--has put a strain on state finances, and Riyadh has already taken some steps to address it. It has cut spending, issued domestic bonds and tapped its foreign-exchange reserves, which dropped by around $116 billion, or 16%, to $616.4 billion over the course of 2015. This month Saudi Arabia also turned to international banks for the first time in 25 years, sealing a $10 billion loan. At the end of last year, the government took the difficult step of raising the domestic price of fuel, water and electricity. In a country where the population is accustomed to cheap utilities and no taxes, these changes have encountered some resistance. The sudden rise in water prices--and billing mistakes that resulted in exorbitant charges for some--prompted a widespread backlash. Over the weekend, King Salman fired his minister of water and energy, Abdullah al-Hussayen, and temporarily handed the portfolio to the minister of agriculture. The economic changes come at a politically sensitive time for Riyadh. The kingdom is engaged in a costly war in neighboring Yemen, where it suspects rival Iran is funding and supplying weapons to the Houthi rebels, something Tehran has denied. More broadly, the kingdom is stepping up efforts to contain the influence of Iran, which is hoping to boost its own oil revenues. Last year's nuclear deal lifted sanctions against Tehran in return for curbs on its nuclear program, paving the way for Iran's re-entry into the world economy. Saudi Arabia, wary that the deal could empower Iran to step-up its regional interference, has turned down requests from other oil producers to freeze production to prop up prices because a freeze would have excluded Iran. Dahlia Kholaif in Cairo contributed to this article. Write to Margherita Stancati at margherita.stancati@wsj.com and Ahmed Al Omran at Ahmed.AlOmran@wsj.com Credit: By Margherita Stancati and Ahmed Al Omran
Subject: Acquisitions & mergers; Economic reform
Location: Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: Al Arabiya; NAICS: 515120; Name: Apple Inc; NAICS: 511210, 334111, 334220
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783923515
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783923515?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
San Francisco Fed Post Says Boost From Cheap Oil Still Possible
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract: None available.
Full text: The San Francisco Fed's Sylvain Leduc, Kevin Moran and Robert J. Vigfusson write that low oil prices could still lead to an increase in consumer spending if they stick around. "The weak response may reflect that consumers initially viewed cheaper oil as a temporary condition. If oil prices remain low, consumer perceptions could change, which would boost spending."
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783932783
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783932783?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Bonds Waver on Potential for Less Accommodative Central Bank Policies; Yield on 10-Year Treasury note ends higher despite declines in oil prices and stocks
Author: Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
The Treasury market appeared to take cues from Europe, where bond yields continued to rise following European Central Bank President Mario Draghi's remarks last week that gave a nod to improving financial conditions.
Full text: U.S. government bonds wavered Monday, following their biggest weekly loss of 2016 , as investors continued to weigh the possibility of less accommodative central bank policies. Though up and down throughout the day, the yield on the benchmark 10-year Treasury note ultimately closed higher than Friday despite declines in oil prices and stocks, signaling a shift in investor sentiment beyond just a short-term swing in risk appetite. Yields rise when bond prices fall. The Treasury market appeared to take cues from Europe, where bond yields continued to rise following European Central Bank President Mario Draghi's remarks last week that gave a nod to improving financial conditions. With the ECB and other central banks seemingly reaching the limits of their stimulus efforts, European bonds "have sold off a little bit and Treasurys in sympathy have sold off with it," said Guy Haselmann, head of U.S. interest rate strategy at Bank of Nova Scotia in New York. Also weighing on Treasurys are two bond auctions this week: a $34 billion sale of five-year U.S. Treasury notes Tuesday and a $28 billion auction of seven-year notes Thursday, analysts said. The yield on the 10-year Treasury note settled at 1.902%, compared with 1.888% Friday. The yield on the 10-year German bond closed at 0.267%, compared with 0.228% Friday. The yield on the 10-year Treasury note rose by 0.135 percentage point last week, reflecting optimism over the economy and pessimism over the value of bonds. In addition to higher oil prices, which investors have taken as a good sign for the global economy, market moves have been influenced by better news out of China, including easing capital outflow from the country thanks to a weaker dollar and new data that suggests it isn't headed toward a sharp slowdown. Federal Reserve officials aren't expected to raise interest rates at a policy meeting this week. But they could add to the pressure on bonds if they also take note of improving financial conditions, raising expectations for a rate increase at one of their next meetings, some analysts say. The Fed will release its policy statement Wednesday at the conclusion of a two-day meeting. Fed funds futures, used by investors and traders to place bets on central bank policy, show only a 23% likelihood of an interest-rate increase in June but a 37% likelihood of an increase in July, which is up from 32% a month ago, according to data from CME Group. Despite recent developments, sluggish global growth outlook and contained inflation continue to draw buyers into Treasury debt, which offers one of the most attractive yields among government bond markets in the developed world. A stronger dollar this year has increased the returns for investors in Asia and Europe who are struggling to obtain high-quality bonds that offer safety and decent income in a low yield world. Write to Sam Goldfarb at sam.goldfarb@wsj.com Credit: By Sam Goldfarb
Subject: Central banks; Treasuries; Treasury notes
Location: United States--US Europe
Company / organization: Name: CME Group; NAICS: 523210; Name: Bank of Nova Scotia; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783932822
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783932822?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Libyan Eastern Government's First Crude-Oil Export Sets Sail; Tripoli-based National Oil Co. still working to stop shipment, calling it breach of U.N. resolution
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
If completed, the delivery would create a lucrative revenue stream for Libya's eastern government at an awkward moment for the fragile peace process with the United Nations-backed unity government, based in Tripoli, that rules the country's western half.
Full text: A government that controls Libya's eastern half said its oil company has loaded its first shipment of oil over the objections of the North African nation's internationally recognized oil company. If completed, the delivery would create a lucrative revenue stream for Libya's eastern government at an awkward moment for the fragile peace process with the United Nations-backed unity government, based in Tripoli, that rules the country's western half. The unity government has tried to take power across the whole country, but it hasn't received support from the militias that rule the country's east. Libya has been divided between east and west since a raft of militias took control following the 2011 ouster and death of dictator Moammar Gadhafi . Under Libyan law, all of the country's oil must be pumped and sold via the internationally recognized National Oil Co. based in Tripoli. The eastern government, which was internationally recognized until U.N.-backed negotiations led to the formation of a unity government, has created its own state oil company and has tried several times to export crude. But until now it had trouble finding shippers and buyers amid fears of legal action by the traditional National Oil Co. The first shipment to leave Libya --650,000 barrels of crude on Monday--was loaded at the Marsa al-Hariga port near the Egyptian border and is now sailing toward Malta, said a spokesman for the east's oil company. The spokesman has previously said the cargo is owned by DSA Consultency FZE of Sharjah in the United Arab Emirates, which couldn't be reached. The Tripoli-based National Oil Co., which is generally considered to act independently of the country's government, said Friday that it had taken action to block the east's shipments . "We are working very hard with the international community" to stop the delivery, a company official said late Monday without elaborating. The company said it had ordered employees at the terminal not to load the tanker and warned the vessel's master that the operation was illegal. The company also said the U.N. had been notified of the attempted loading, saying it was in breach of a resolution on Libya. Libya's oil exports amount to about 300,000 barrels a day and represent the country's main source of revenue. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Militia groups
Location: Libya
People: Qaddafi, Muammar El
Company / organization: Name: United Nations--UN; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783991133
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783991133?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Nabors Industries Swings to Loss; The drilling company says it expects further weakening in rig counts and margins despite an uptick in oil prices
Author: Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
"The first quarter's drop in oil prices below $30 led to sharp reductions in customer spending plans on a worldwide basis and had a corresponding adverse impact on our results, "Chairman and Chief Executive Anthony Petrello said in prepared remarks.
Full text: Nabors Industries Ltd. said it swung to a first-quarter loss amid slumping demand and a big write-down of its investment in C&J Energy Services. The drilling company also warned it expects further weakening in global rig counts and margins despite a recent uptick in oil prices. Shares fell 6.5% to $9.70 in recent after-hours trading as revenue missed expectations. A deal that combined C&J Energy Services Inc. with the completion-and-production businesses of Nabors in the U.S. and Canada closed in March 2015. In an unusual deal structure, C&J was the nominal buyer, but Nabors owned 53% of C&J when the deal closed. "The first quarter's drop in oil prices below $30 led to sharp reductions in customer spending plans on a worldwide basis and had a corresponding adverse impact on our results, "Chairman and Chief Executive Anthony Petrello said in prepared remarks. "Despite a recent upturn in the price of oil, at its current level, we anticipate further near-term reductions in rig count both internationally and in the U.S.," Chief Financial Officer William Restrepo said. "We also expect margins to deteriorate, particularly in the Lower 48 market." Like many other companies in the sector, Nabors has cut costs in response to the commodities downturn. Mr. Restrepo on Monday said Nabors continues to execute on its cost-cutting efforts. Over all, Nabors reported a loss of $398.3 million, or $1.41 a share, compared with year-earlier earnings of $123.6 million, or 42 cents a share, a year earlier. Excluding write-downs related to Nabor's investment in C&J Energy and other items, adjusted per-share loss from continuing operations was 29 cents. Revenue slumped 70% to $430.8 million. Operating revenue declined 14% to $597.6 million. Analysts polled by Thomson Reuters expected per-share loss of 34 cents and revenue of $630 million. Write to Tess Stynes at tess.stynes@wsj.com Credit: By Tess Stynes
Subject: Financial performance; Earnings; Cost reduction; Operating revenue
Location: United States--US Canada
People: Petrello, Anthony
Company / organization: Name: Nabors Industries Ltd; NAICS: 213111; Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783995492
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783995492?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Ignoring the Shale Revolution; U.S. oil production, at nearly nine million barrels per day, is nine times what Hubbert predicted it would be in the 21st century.
Author: R. Tyler Priest
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
Amid the intellectual ferment in New York City during the Great Depression, Hubbert fell under the spell of a magnetic charlatan named Howard Scott, who envisioned a revolutionary future in which the "price system" would be replaced with "energy certificates" and scientists and engineers would manage government and industry across a North American "Technate."
Full text: On March 8, 1956, Shell Oil research geologist Marion King Hubbert delivered a keynote speech at an American Petroleum Institute meeting in San Antonio, Texas, and predicted that U.S. oil production would peak within 10 to 15 years. The reaction was dismissive. Hubbert was challenging an entrenched belief in American petroleum abundance. Fifteen years later, however, U.S. oil output did begin to decline, and Americans' reliance on foreign oil soared. The confirmation of his 1956 prediction transformed Hubbert from iconoclast to visionary. In the mid-2000s, as global oil production appeared to have peaked, he became the idol of environmentalists who dreamed of an end to the oil era. A man who likened himself to Galileo, King Hubbert (1903-89) would have approved of the portrait painted in "The Oracle of Oil: A Maverick Geologist's Quest for a Sustainable Future." One of the most gifted geoscientists of his age but also one of the most contentious, Hubbert pursued scientific truth and his own legend with equal vigor. Instead of taking the full measure of the man and his impact, which would have required examining Hubbert's compulsions and contradictions as an environmental thinker, Mason Inman, an environmental journalist, polishes the legend. The more revealing half of this biography is about Hubbert's life before 1956. A native of the austere Methodist community of San Saba, Texas, he displayed his iconoclasm early, rejecting religious fundamentalism for empirical science. A precocious and cocky student, he earned degrees in geology and physics from the University of Chicago and in 1930 began teaching at Columbia University. Amid the intellectual ferment in New York City during the Great Depression, Hubbert fell under the spell of a magnetic charlatan named Howard Scott, who envisioned a revolutionary future in which the "price system" would be replaced with "energy certificates" and scientists and engineers would manage government and industry across a North American "Technate." Scott, whose gray-uniformed disciples saluted him as the "Great Engineer," enlisted Hubbert as the second-in-command of "Technocracy Inc." The geologist's 1934 Technocracy Study Course was circulated to local chapters across the country and articulated his growing conviction that there were immutable physical limits to economic growth and energy consumption. Hubbert drifted away from Technocracy during World War II, when he was a researcher with the Board of Economic Warfare. In 1943 he landed a position as head of Shell Oil's geophysical lab in Houston, where he was given freedom to pursue wide-ranging research. By the early 1950s, he had solved an age-old puzzle concerning the plastic flow of rocks in the Earth's crust, overturned accepted notions about the movement of underground fluids, explained the physics of hydraulic well fracturing and revolutionized thinking about petroleum entrapment. His brilliant scientific attainments never eased his deep insecurities. It was not enough for him to be right. Someone had to be humiliated in the process. Mr. Inman appears uninterested in pondering the mixture of arrogance and resentment that shaped Hubbert's personal interactions. There is one passage about the ritual abuse suffered by his technical assistant at Shell, Martha Lou Broussard, exemplified by his objections to her dress color and food preferences, but there are few other examples of the man's well-known quarrelsomeness. Instead, he is allowed to narrate his own story. Much of "The Oracle of Oil" reads like annotated transcripts from the 36 hours of interviews conducted by historian Ronald Doel with Hubbert just before his death in 1989. Mr. Inman never challenges self-serving tales or calls out errors. He quotes Hubbert denouncing optimistic projections of future oil discoveries in 1959: "I think we can rule out any radical improvement in geophysical techniques." The lack of comment on this statement suggests that Mr. Inman is unaware of the digital breakthroughs in seismic surveying that shortly followed. The second half of "The Oracle of Oil" recounts Hubbert's peak-oil prediction and his campaign to discredit the inflated numbers peddled by both oilmen and the scientists at the U.S. Geological Survey. Retiring from Shell in 1964, Hubbert joined the USGS and feuded with its chief geologist, and eventual director, Vincent McKelvey, who clung to a dubious estimate of 590 billion barrels of ultimate U.S. crude-oil reserves. Hubbert placed the upper limit just above 200 billion barrels. When U.S. oil production fell during the 1970s energy crisis, Hubbert emerged the proud prophet, while McKelvey lost his credibility and eventually his job when Jimmy Carter became president. Although Hubbert deserves credit for forcing new rigor upon official petroleum estimates, he was no oracle. His peak-oil prediction was accurate in the near term, but over the longer span it was wildly wrong. Mr. Inman never discusses the statistical and conceptual problems with Hubbert's "curve-fitting" methods, such as their reliance on aggregate data, which work well only under special conditions, or failure to predict future discoveries and reserve growth. He insists that Hubbert remains correct about "conventional" oil (that which is drilled through traditional wells) and minimizes the importance of "unconventional" plays that have extended U.S. oil and gas reserves far beyond what Hubbert thought possible. Had this book been published in 2007, at the height of oil prices and peak mania, it might have resonated. Unfortunately for Mr. Inman, McKelvey's optimism no longer looks so outlandish. The technologies of the shale revolution have blurred the distinction between conventional and unconventional hydrocarbons and reversed the decline in U.S. oil and gas production that Hubbert insisted was terminal. Current U.S. oil production, at nearly nine million barrels per day, is nine times what Hubbert believed it would be in the 21st century. Mr. Inman's greater failure, however, is his reluctance to wrestle with the many paradoxes of King Hubbert. The geologist was an innovator who discounted the value of innovative technology. He was a dogmatic crusader for science over dogma. He was a relentless quantifier who dismissed economics as "hieroglyphics." In the end, he expressed steadfast certainty about what can only ever be an uncertain future. Mr. Priest is associate professor of history at the University of Iowa. Credit: By R. Tyler Priest
Subject: Oil consumption; Studies; Engineers; Petroleum production
Location: Texas United States--US
Company / organization: Name: Columbia University; NAICS: 611310; Name: University of Chicago; NAICS: 611310; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: Arts
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1783999615
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1783999615?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi Aramco: The Oil Giant's Known Unknowns; Saudi Aramco would be a must-own investment as the world's largest listed company but its sale carries both risks and even negative implications for oil prices
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
If the national oil champion were to become a holding company with 5% or so of its shares listed on the stock market, it would be too large for investors to ignore.
Full text: Saudi Arabian Oil Co.: A company that enriched its private investors for decades through what was called a "golden gimmick" beckons to foreign capital once again. That foreshadows how tantalizing, yet complicated, an investment in what is known as Saudi Aramco may be. If the national oil champion were to become a holding company with 5% or so of its shares listed on the stock market, it would be too large for investors to ignore. Based on what Saudi Arabia's Prince Mohammed bin Salman estimated to be a potential market value of $2 trillion to $2.5 trillion, just its proposed float would be larger than supermajor BP or as valuable as ConocoPhillips and Italy's ENI combined. But a proposed initial public offering of the company raises serious questions about sovereign risk , and even the likely direction of oil prices. Had it been made a few years ago when oil prices were far higher, then not only would the potential proceeds be greater but so might investors' comfort level. The Saudis, after all, appear to be selling out of desperation. Potential proceeds are equal to the kingdom's budget deficit last year. By contrast, when Saudi Arabia nationalized the final chunk of the company--back when Aramco stood for "Arabian American Oil Company"--it was at a time of then-record oil prices in 1980. The Saudis gave their partners some compensation, but it was paltry--and that was to politically influential oil companies. It would be even easier for the country to do the same one day to portfolio investors. What's more, the Saudis wouldn't necessarily have to nationalize the company outright. Consider that decades before the country fully nationalized Aramco, it effectively did so with part of the company through what was called the golden gimmick. This involved it forcing foreign partners to give up half their earnings in exchange for tax breaks at home. And a sale of even a small slug of Aramco could prolong hardheaded Saudi policy. The same prince who announced the sale had personally scuttled a potential output freeze being negotiated with other major exporters a week earlier. An even larger war chest could make a tough stance against the likes of Russia and Iran easier. Saudi Arabia is on the other side of those countries in proxy conflicts in Syria and Yemen. Another issue is that selling a 5% slug of Aramco wouldn't change business practices no Western oil company would embrace. For example, its reserves-to-production ratio is about 10 times that of a commercial producer. Even when it had Western investors, geopolitics sometimes trumped business. For example, Aramco's American managers had to halt sales to the U.S. during the 1973 Arab Oil Embargo. Of course there is more to recommend a potential initial public offering than size. Though Aramco is well run by the standards of a national oil company, efficiency gains could make it even more valuable. Just raising heavily subsidized gasoline prices would reap huge benefits. But then that could rock the boat politically. Potential investors have to weigh the question: Is this a golden opportunity or another Saudi gimmick to ride out a cash-flow crisis? Credit: By Spencer Jakab
Subject: Corporate profiles; Nationalization
Location: Italy Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784025161
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784025161?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
BP Reports First-Quarter Pretax Loss; Energy giant sees a loss for second consecutive quarter as low oil prices affect financial performance
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Apr 2016: n/a.
Abstract:
The company's earnings suffered as the oil sector continues to struggle with a near two-year slump in crude prices that has forced steep spending cuts and hammered profits.
Full text: LONDON--BP PLC reported a loss for the second consecutive quarter Tuesday, as low oil prices continue to buffet the company's financial performance. British energy giant BP said its replacement cost loss--a number analogous to the net income that U.S. oil companies report--was $485 million, compared with a profit of $2.1 billion a year earlier. However, stripping out one-off items such as proceeds from sales and impairment charges, the company's underlying earnings of $532 million significantly beat analysts' consensus of $140 million loss. "Despite the challenging environment, we are driving toward our near-term goal of rebalancing BP's cash flows," Chief Executive Bob Dudley said. "Operational performance is strong and our work to reset costs has considerable momentum and is delivering results." The company's earnings suffered as the oil sector continues to struggle with a near two-year slump in crude prices that has forced steep spending cuts and hammered profits. In the first quarter of 2016, Brent oil prices averaged $34 a barrel, compared with $54 a barrel in the same period a year earlier. Refining margins were at their lowest quarterly average for over five years. Corrections & Amplifications Brent oil prices in the first quarter of 2016 averaged $34 a barrel. An earlier version of this article incorrectly stated the time period as the first quarter of 2015. (April 26, 2016) Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Financial performance; Losses; Crude oil prices
Location: United States--US
People: Dudley, Bob
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 25, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784028409
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784028409?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Recoups Losses on Weaker Dollar; Volatility Ahead; Brent crude rose $0.35 to $44.83 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
According to the Wall Street Journal Dollar index, which compares the dollar to 16 currencies, the greenback was last down 0.09% or 8 cents at $86.42.
Full text: Crude-oil prices edged higher in early Asian trade Tuesday on U.S. dollar weakness but analysts caution a raft of new supplies from the Middle East and Africa are expected to put a strain on prices. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $42.99 a barrel at 0248 GMT, up $0.35 in the Globex electronic session. June Brent crude on London's ICE Futures exchange rose $0.35 to $44.83 a barrel. Oil prices dropped overnight on reports of growing inventories in the U.S. and extra supplies coming from Kuwait, Saudi Arabia and Libya. A government that controls Libya's eastern half said its oil company has loaded its first shipment of oil over the objections of the North African nation's internationally recognized oil company. The first shipment of 650,000 barrels of crude to leave Libya on Monday--was loaded at the Marsa al-Hariga port near the Egyptian border and is now sailing toward Malta, said a spokesman for the east's oil company. "Traders seemed unconcerned by indications that Kuwait might raise oil production by 150,000 barrels a day by June or that Saudi Arabia was boosting capacity at one of its oil fields by 250,000 barrels a day," said Tim Evans, a Citi Futures energy analyst. The upward momentum in Asia was likely buoyed by weaker U.S. dollar and rotations of assets as investors move their funds from equities into the commodity complex, said Aaron Lynch, a market analyst at OptionsXpress. According to the Wall Street Journal Dollar index, which compares the dollar to 16 currencies, the greenback was last down 0.09% or 8 cents at $86.42. Another factor supporting the prices could be the market anticipating a drawdown or smaller growth in U.S. crude inventories ahead of the seasonal summer demand for gasoline. A survey of analysts by Platts showed U.S. crude likely rose 800,000 barrels while gasoline stocks fell 1.3 million barrels in the week ended April 22. "Strong refinery demand, as well as U.S. crude oil production declines, mitigated the size of recent crude builds that were driven mostly by crude imports," said Platts. Official data will be released by the Energy Information Administration on Wednesday. However, as the fundamentals of the oil markets remains bearish, analysts warn of volatile times ahead. "Although the oil has shown more bullishness in the last six month the supply glut is still dire. We might see a sharp correction in the market soon," said Avtar Sandu, Asian commodities manager at Phillip Futures. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 110 points to $1.5241 a gallon, while May diesel traded at $1.3045, 142 points higher. ICE gas oil for May changed hands at $388.75 a metric ton, down $4.25 from Monday's settlement. Benoit Faucon contributed to this article. Credit: By Jenny Hsu
Subject: American dollar; Inventory; Futures; Crude oil prices; Petroleum production
Location: Libya United States--US Kuwait Africa Saudi Arabia Middle East
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784007689
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784007689?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
World News: Low Prices Strain Oil-Producing Nations
Author: Parasie, Nicolas
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Apr 2016: A.8.
Abstract:
Mr. Ahmed of the IMF described the Gulf's response to low oil prices as "quite determined" but called on countries in the region to abandon the economic model whereby the state is the biggest provider of jobs in favor of a system where the private sector plays a larger role in creating jobs.
Full text: DUBAI -- The International Monetary Fund estimates the Middle East's oil-dependent economies missed out on $390 billion in revenue due to lower oil prices by the end of last year, and expects them to lose another $150 billion this year. The drop in revenues is the direct result of the plunge in crude prices from around $115 a barrel in the middle of 2014 to below $30 at the start of the year, and now above $40, the IMF said. Falling prices have put an enormous strain on the economies of major oil exporters such as Saudi Arabia and Kuwait that have posted budget deficits in the past year. The IMF previously calculated that declining energy prices would erase around $360 billion in oil receipts. To address budget deficits, Persian Gulf countries have introduced a raft of measures ranging from cutting energy subsidies to raising taxes. Some, such as Saudi Arabia, have also spent down reserves or started to borrow internationally to ease the fiscal pressure. "2016 is year number two in a multi-year adjustment process to reach balanced budgets," said Masood Ahmed, director of the IMF's Middle East and Central Asia Department. "Probably another four to five years of action will be needed both on spending and on revenues before reaching a comfortable fiscal situation for many countries," he said. Economic growth for the region's oil exporters is set to rise to 3% in 2016 from 2% last year but that is mainly due to the improved prospects of Iraq, which increased oil production, and Iran, which is looking to benefit from the gradual lifting of sanctions, the IMF said. For oil-rich Persian Gulf countries, economic activity is expected to further slow as governments cut spending to rein in budget deficits. Mr. Ahmed of the IMF described the Gulf's response to low oil prices as "quite determined" but called on countries in the region to abandon the economic model whereby the state is the biggest provider of jobs in favor of a system where the private sector plays a larger role in creating jobs. He cited the examples of Malaysia, Indonesia and Chile as countries that have successfully reduced their dependence on energy resources. The IMF estimates that oil-exporting countries in the Middle East will see 10 million young people added to the workforce in the next five years. Mr. Ahmed warned that the current pace of job creation is insufficient to absorb new labor-market entrants. Credit: By Nicolas Parasie
Subject: Budget deficits; Petroleum production; Crude oil prices; Supply & demand
Location: Persian Gulf states
Classification: 8510: Petroleum industry; 9178: Middle East
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.8
Publication year: 2016
Publication date: Apr 26, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784024315
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784024315?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
BP Reports First-Quarter Pretax Loss; Energy giant sees a loss for second consecutive quarter on the global oil price slump
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
The company's earnings suffered as the oil sector continues to struggle with a near two-year slump in crude prices that has forced steep spending cuts and hammered profits.
Full text: LONDON--BP PLC reported a loss for the second consecutive quarter Tuesday, as low oil prices continue to buffet the company's financial performance. British energy giant BP said its replacement cost loss--a number analogous to the net income that U.S. oil companies report--was $485 million, compared with a profit of $2.1 billion a year earlier. However, stripping out one-off items such as proceeds from sales and impairment charges, the company's underlying earnings of $532 million significantly beat analysts' consensus of a $140 million loss. "Despite the challenging environment, we are driving toward our near-term goal of rebalancing BP's cash flows," Chief Executive Bob Dudley said. "Operational performance is strong and our work to reset costs has considerable momentum and is delivering results." The company's earnings suffered as the oil sector continues to struggle with a near two-year slump in crude prices that has forced steep spending cuts and hammered profits. In the first quarter of 2015, Brent oil prices averaged $34 a barrel, compared with $54 a barrel in the same period a year earlier. Refining margins were at their lowest quarterly average for over five years. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Financial performance; Losses; Crude oil prices
Location: United States--US
People: Dudley, Bob
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784025134
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784025134?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Energy Shares Climb With Oil Prices; Broader indexes little changed ahead of Federal Reserve and Bank of Japan rate decisions
Author: Josephs, Leslie; Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
Energy shares rose as U.S. oil prices settled at a new 2016 high Tuesday, while major U.S. stock indexes drifted higher ahead of a monetary-policy update from the Federal Reserve.
Full text: Energy shares rose as U.S. oil prices settled at a new 2016 high Tuesday, while major U.S. stock indexes drifted higher ahead of a monetary-policy update from the Federal Reserve. Investors don't expect the Fed to raise interest rates this week, but they will look for hints about the strength of the U.S. economy and whether officials might act in June. U.S. oil futures settled at a five-month high as the dollar weakened and traders bet on a continued decline in U.S. production. U.S. oil prices have climbed 68% from a 13-year low reached in February on expectations that production would decline in the U.S. and elsewhere and that demand would remain robust. Still, there are few signs that the global oversupply of crude oil is shrinking, analysts say. Light, sweet crude for June delivery rose $1.40, or 3.3%, to $44.04 a barrel on the New York Mercantile Exchange, the highest settlement since Nov. 10. Energy shares in the S&P 500 rose 1.4%, the most of any sector in the index. Today's Highlights * LendingClub Looks at New Deal to Crack Tough Market * Goldman Sachs Drops the Velvet Rope for Savers * I Hate This Market, I Love This Market The energy sector is up close to 12% this year but is down more than 16% over the past 12 months. "You have to be a little cautious in some of these energy names," said Bill Nichols, head of U.S. equities at Cantor Fitzgerald. The Dow Jones Industrial Average added 13.08 points, or 0.1%, to 17990.32. The S&P 500 rose 3.91 points, or 0.2%, to 2091.70. Trading volume of 6.39 billion shares was below the daily average for 2016. "No one is rushing to the exits," said Gordon Charlop, managing director at brokerage Rosenblatt Securities. The tech-heavy Nasdaq Composite fell for a fourth session--its longest losing streak since January--dropping 7.50 points, or 0.2%, to 4888.28. Apple shares fell 8.2% in after-hours trading. The iPhone maker reported its first drop in revenue since 2003 and iPhone sales fell for the first time ever in the latest quarter. Twitter shares were down 14% in postmarket trading after the social-media company reported revenue below analysts' expectations and issued a downbeat outlook for second-quarter revenue. Procter & Gamble was the biggest laggard in the Dow, dropping $1.86, or 2.3%, to $79.55, shaving nearly 13 points off the index. The maker of household products such as Bounty paper towels reported higher profit but issued a downbeat earnings outlook . Hershey fell 1.77, or 1.9%, to 89.60 after the candy maker said its profit and revenue declined in the last quarter . Whirlpool fell 6.61, or 3.6%, to 179.43 after the appliance company posted lower profit . Health-care shares in the S&P 500 slipped 0.4%. Eli Lilly fell 1.67, or 2.1%, to 76.27 after the drugmaker cut its profit forecast for the year. The yield on the 10-year Treasury note rose for the seventh consecutive session, to 1.931% Tuesday, from 1.902% on Monday, as prices fell. The last time the yield settled above 2% was in late January. Meanwhile, many investors expect the Bank of Japan to ease policy further Thursday amid a recent strengthening of the yen and weakening of corporate sentiment and inflation expectations. Japan's Nikkei Stock Average fell 0.5% Tuesday. The Stoxx Europe 600 edged up 0.2%, with banks and energy companies leading gains. In the Markets * Oil Prices Rise on Weaker Dollar * Dollar Extends Losses on Tepid Data * Treasury Yields Higher Write to Leslie Josephs at leslie.josephs@wsj.com and Nicole Friedman at nicole.friedman@wsj.com Credit: By Leslie Josephs and Nicole Friedman
Subject: Investments; Profits; Crude oil prices; Energy industry
Location: United States--US
Company / organization: Name: Eli Lilly & Co; NAICS: 325411, 325412; Name: New York Mercantile Exchange; NAICS: 523210; Name: Procter & Gamble Co; NAICS: 325412, 325611, 325612, 325620, 322291, 311919
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784028004
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784028004?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Fallout: Husky's Relief Comes at Somebody Else's Expense; Husky Energy's deal to sell assets to companies also controlled by Li Ka-shing leaves some investors without a say
Author: Wong, Jacky
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
Both stocks fell Tuesday. Because the deal size is relatively small for the two Hong Kong-listed companies, their shareholders won't have a say.
Full text: For oil companies struggling through a cold winter, it is good to have a rich daddy like Hong Kong tycoon Li Ka-shing to keep them warm. His other investors, however, are right to feel ignored. Canadian oil firm Husky Energy, controlled by Mr. Li, said Monday it would sell a 65% stake in its pipeline and oil storage assets to two other firms controlled by Mr. Li. The sale will raise C$1.5 billion ($1.2 billion) for Husky, net of its capital commitment. Low oil prices have pushed the company, which has suspended its dividend and slashed its capital expenditure, into three straight quarterly losses. The sale price, at 13 times forward earnings before interest, taxes, depreciation and amortization, is better than the 10 times expected by Morgan Stanley. The deal, however, is worse for the siblings that come to the rescue--Mr. Li's Cheung Kong Infrastructure and Power Assets. Both stocks fell Tuesday. Because the deal size is relatively small for the two Hong Kong-listed companies, their shareholders won't have a say. If they did, it is unclear if the transaction would sail through. Power Assets is stuffed with a nearly $9 billion cash pile, partially from spinning off its Hong Kong electricity business in 2014. Investors have been rooting for a special cash dividend, while Mr. Li would like the cash to redeploy. When he tried to merge cash-rich Power Assets with CKI last year to move the cash closer to his top-level holding company, shareholders blocked it . The Husky deal would only use up 10% of Power Assets' cash, but Mr. Li's intention to keep that cash within the family is well flagged. Power Assets said in March it would decide on the special dividend if no "sizable investment" was expected before the shareholders' meeting in May. Now, it can argue such an investment opportunity has emerged. Shareholders who can't vote on the deal may now vote with their feet instead. Write to Jacky Wong at jacky.wong@wsj.com Credit: By Jacky Wong
Subject: Capital structure; Dividends
Location: Hong Kong
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784028139
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784028139?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is pro hibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Prices Settle at New 2016 High; Concerns about persistent oversupply expected to put cap on gains
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
Robust gasoline demand has been a key driver behind the price rally in recent weeks, and "there's some anticipation that you'll see a continuation of that trend tomorrow," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Gasoline futures settled up 5.29 cents, or 3.5%, to $1.566 a gallon, the highest settlement since August.
Full text: U.S. oil prices settled at a new 2016 high on Tuesday as the dollar fell and traders bet that U.S. oil output would continue to fall. However, some analysts warn that persistent market oversupply could prevent further price gains. Light, sweet crude for June delivery rose $1.40, or 3.3%, to $44.04 a barrel on the New York Mercantile Exchange, the highest settlement since Nov. 10. Brent, the global benchmark, rose $1.26, or 2.8%, to $45.74 a barrel in ICE Futures Europe. Oil was propped up by the dollar, which fell ahead of a meeting of Federal Reserve officials on Tuesday and Wednesday. The Fed could drop hints after its meeting about future interest-rate increases and the strength of the U.S. economy. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, recently fell 0.3%. As oil is priced in dollars, it becomes cheaper for holders of other currencies as the dollar falls. U.S. oil prices have climbed more than 68% from a 13-year low reached in February on expectations that production would decline in the U.S. and elsewhere and that demand would remain robust. Still, there are few signs that the global oversupply of crude oil is shrinking, analysts say. "The supply glut is still dire," said Avtar Sandu, commodities manager at Phillip Futures. "We might see a sharp correction in the market soon." The U.S. Energy Information Administration will release closely watched weekly inventory data Wednesday. Analysts surveyed by The Wall Street Journal expect the agency to report that crude stockpiles rose by 1.7 million barrels to a record, while inventories of petroleum products including gasoline and diesel fuel declined. Robust gasoline demand has been a key driver behind the price rally in recent weeks, and "there's some anticipation that you'll see a continuation of that trend tomorrow," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Gasoline futures settled up 5.29 cents, or 3.5%, to $1.566 a gallon, the highest settlement since August. In addition, traders may be less worried about high inventory levels due to recent supply outages, Citigroup Inc. said in a note. "Global supply disruptions are growing and market participants are more comfortable with elevated levels of crude inventories," the bank's analysts said. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 1.1-million-barrel decrease in crude supplies, a 398,000-barrel decline in gasoline stocks and a 1-million-barrel decrease in distillate inventories, according to market participants. The EIA will also report last week's U.S. crude-production level. Domestic output fell below 9 million barrels a day earlier this month for the first time since October 2014. Analysts expect U.S. output to keep falling as companies have slashed spending on new drilling. U.S. shale producer Pioneer Natural Resources Co. said Monday that it would put more drilling rigs to work if prices rise to $50 a barrel. That price point was perceived as bullish to some market watchers, who had expected shale producers to ramp up output at $40 or $45 a barrel, said Michael Roomberg, portfolio manager and analyst at Miller/Howard Investments, which manages about $7 billion in assets. "It could be construed as a barometer for the industry, that folks are not going to be rushing to put capital and rigs back to work" until prices hit $50 or higher, Mr. Roomberg said. Oil major BP PLC reported a second-consecutive quarterly loss on Tuesday, hurt by weak oil prices and a $917 million pretax charge relating to the Deepwater Horizon explosion in 2010. But excluding the Deepwater Horizon costs and other one-time charges, the company posted a profit of $532 million, beating analysts' consensus forecast for a loss. Diesel futures settled up 4.22 cents, or 3.3%, at $1.3325 a gallon, the highest settlement since December. Jenny W. Hsu contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Inventory; Crude oil prices; Price increases
Location: United States--US
People: Dudley, Bob
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784034557
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784034557?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
An Oil Kingdom Plans To Wean Itself From Oil
Author: Margherita Stancati; Ahmed Al Omran; Stancati, Margherita; Ahmed Al Omran
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Apr 2016: A.1.
Abstract:
Speaking to reporters, he said the project -- dubbed "Saudi Vision 2030" -- includes plans to sell less than 5% of state-owned oil giant Saudi Arabian Oil Co., known as Saudi Aramco, and transfer ownership of the company to Saudi Arabia's sovereign-wealth fund, the Public Investment Fund, so it can build a war chest for non-oil investments abroad. Prince Mohammed said the government aims to diversify its revenues by opening up to more privatization in areas like health care and education, as well as expanding the country's manufacturing base and investing in alternative energy sources.
Full text: RIYADH -- Saudi Arabia unveiled plans to free the kingdom from its dependence on oil revenues, in part by selling a stake in its state-owned oil company and creating the world's largest sovereign-wealth fund. The move represents an ambitious attempt to lay out a new economic trajectory for the country in an era of cheap oil. It is the brainchild of Deputy Crown Prince Mohammed bin Salman, the 30-year-old son of King Salman, who was entrusted by his father to oversee what are likely to be jarring changes in the kingdom. "By 2020, we'll be able to live without oil," Prince Mohammed told Saudi-owned news channel Al Arabiya in an interview aired Monday. A detailed package of reforms included in the plan is expected to be released in six weeks. Analysts said it could take Saudi Arabia many years to implement such far-reaching changes and fundamentally transform the economy. Prince Mohammed on Monday presented a broad overview of what has been billed as the country's most extensive economic shake-up in decades. Speaking to reporters, he said the project -- dubbed "Saudi Vision 2030" -- includes plans to sell less than 5% of state-owned oil giant Saudi Arabian Oil Co., known as Saudi Aramco, and transfer ownership of the company to Saudi Arabia's sovereign-wealth fund, the Public Investment Fund, so it can build a war chest for non-oil investments abroad. The country will also implement reforms aimed at boosting revenue from non-oil sources, such as tourism and mining. The prince said the reform plan doesn't depend on fluctuations in the price of oil, and it can be achieved even if crude prices fall to around $30 a barrel. Oil has recently traded for around $45 a barrel. He added that the economic transition would be more about making spending more efficient than reducing it. Saudi Arabia isn't the first country in the region to propose long-term economic reform. The United Arab Emirates, Qatar and Kuwait have presented similar plans, though implementation has been slow in some countries. The shift away from oil could fundamentally revise Saudi Arabia's social contract. For decades the ruling monarchy indulged its population with generous spending and asked for no taxes in return. Last year, oil provided 73% of state revenues, which in 2015 totaled about 608 billion riyals ($162 billion). The prince, who also heads Aramco's Supreme Council, its top decision-making body, estimated the company's value between $2 trillion and $3 trillion. That would make Aramco more valuable than Apple Inc., Microsoft Corp., Warren Buffett's Berkshire Hathaway Inc. and Alphabet Inc., parent of Google, combined. Based on those figures, listing 5% of the company could raise $100 to $150 billion. The prince said the company is working with banks on the public offering. "We think Aramco's size is very huge, not just for the Saudi market but even for the international market," the prince said. "So we will open windows, the most important of which is in the American market, to trade in Aramco." With Aramco, Saudi Arabia's Public Investment Fund would dwarf what is currently the world's largest sovereign-wealth fund, Norway's pension fund, which has assets worth around $825 billion, according to the Sovereign Wealth Fund Institute. The swing away from oil is likely to come with requirements for more transparency of Saudi Arabia's economy and companies -- one of the prince's stated goals. The moves would draw unprecedented scrutiny to Saudi Arabia's oil assets and its finances more broadly. The plan further empowers the young prince, who rose to a position of almost unchallenged power with his father's ascension last year. "The plan is intended to develop a new social contract between the Al Saud family and its subjects," says Theodore Karasik, of the Washington-based Gulf States Analytics. "In order to make the plan successful there needs to be unity behind Mohammed bin Salman, both at the local level and at the center." Saudi Arabia is also challenged by demographics, with some two-thirds of the population under 30 years old, which is forcing the monarchy to prioritize job creation to deal with an unemployment rate over 11%. "Progress with reforms and moves to diversify the economy would have been vital, even if the oil prices stayed high," says Monica Malik, chief economist at Abu Dhabi Commercial Bank. Prince Mohammed said the government aims to diversify its revenues by opening up to more privatization in areas like health care and education, as well as expanding the country's manufacturing base and investing in alternative energy sources. He also said the kingdom would introduce fees on luxury items, tobacco and sugary drinks. He reiterated the government wouldn't introduce more extensive taxes. Saudi Arabia's new plan will take time to come into force. "2015 was the year of the quick fix, 2016 is the year of the more organized quick fix, and 2017 will be the year the vision will begin," said Prince Mohammed, in the Al Arabiya interview. He indicated the kingdom's desire to move beyond its ultraconservative image, saying that Saudi Arabia would "open its doors to tourism of all nationalities in line with its tradition and values." Currently, Saudi Arabia doesn't issue tourist visas except to Muslim pilgrims. The prolonged period of cheap oil -- which Saudi Arabia has partly shaped by its decision not to curb production -- has put a strain on state finances, and Riyadh has already taken some steps to address it. It has cut spending, issued domestic bonds and tapped its foreign-exchange reserves, which dropped by around $116 billion, or 16%, to $616.4 billion over the course of 2015. This month Saudi Arabia also turned to international banks for the first time in 25 years, sealing a $10 billion loan. Credit: By Margherita Stancati and Ahmed Al Omran
Subject: Petroleum production; Divestiture; Sovereign wealth funds
Location: Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Company: Saudi Arabian Oil Co
Classification: 8510: Petroleum industry; 9178: Middle East
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Apr 26, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784035323
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784035323?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Why Oil Isn't Everything for Standard Chartered; Bank is cleaning up its books, but has lost a lot of revenues permanently
Author: Davies, Paul J
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
Standard Chartered is more dependent than most banks on lending money to those who dig up commodities or move them around: that is why its shares track the oil price closely and why commodities drove the fears around its bad debts.
Full text: Many a fortune has been won and lost on oil and other stuff dug out of the ground. Standard Chartered is more dependent than most banks on lending money to those who dig up commodities or move them around: that is why its shares track the oil price closely and why commodities drove the fears around its bad debts. A recovery in commodities prices would mean a rebound in revenues in a significant chunk of Standard Charter's business. But it wouldn't cure all the bank's top-line ills . The bank's corporate and institutional division, which contains most of the commodities exposure, saw the biggest falls in revenues versus the first quarter last year. They were down 27%, or $670 million, which includes not only trade finance, but also financial markets and corporate finance. Partly this is down to restructuring, shedding bad assets and cutting back its risk appetite. But it is also down to cheaper commodities. Much of the bank's commodities lending is trade finance with short maturities, so if it stops making new loans, its book shrinks quite quickly. That helped cut its commodities exposure from $55 billion at the end of 2014 to $37 billion today. However, any new commodities financing it has done is against lower priced material, which means smaller loans and lower revenues. Andy Halford, chief finance officer, said perhaps one-third of the shrinkage in commodities-related revenues was down to lower prices, with some more related to reduced market activity. Assuming its risk appetite stays the same from here, there is a decent chunk of revenues that can rebound if, for example, oil or iron ore prices recover. This looks good for Standard Chartered, which has less exposure than some larger European rivals to the hard-to-shed fixed-income and derivatives businesses that no longer work under new capital rules. When a turnaround in its wholesale bank comes, it could be quite quick. But other things still hold it back. Its first-quarter profits beat expectations due to lower bad loan losses , but the bank still added more bad loans in the period and for Bill Winters, chief executive, it was too early to say asset quality had turned a corner. There have also been permanent revenue losses elsewhere. Retail revenues, which account for about one-third of the total, were down by 20% year on year and about half of that is gone for good because the bank quit businesses. The smaller commercial clients business saw a 36% drop in revenues and much of that comes from the bank getting out of risks it no longer likes. Standard Chartered is still shrinking and it will until there is a rebound in commodities and Asian growth. As it grinds through its restructuring this year, it will also need to show where the bank's own rebound could come from. Write to Paul J. Davies at paul.davies@wsj.com Credit: By Paul J. Davies
Subject: Financial performance; Commodity prices; Loans; Banking industry; Trade finance
People: Halford, Andy
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784061628
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Freeport-McMoRan Loss Widens, Unveils Job Cuts in Oil-and-Gas Business; Copper-mining company expects to post a charge of about $40 million related to the restructuring
Author: Miller, John W; Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
The pressure on Freeport grew when activist investor Carl Icahn disclosed the purchase of a stake last August . Since Mr. Icahn disclosed his initial investment last August, Freeport has suspended its dividend, cut capital spending, and announced the resignation of longtime chairman James R. Moffett, an oil wildcatter who also developed the Grasberg mine in Indonesia, one of its so-called super mines.
Full text: Freeport-McMoRan Inc. on Tuesday posted a $4.2 billion quarterly loss, mostly because of the declining book value of its oil and gas assets, but said it would continue to ramp up copper production despite stagnating prices. Phoenix-based Freeport, the U.S.'s biggest mining company by market value, said revenue fell 15% to $3.5 billion from $4.1 billion in the same quarter a year ago. It took $3.8 billion in charges "to reduce the carrying value of oil and gas properties." The company lost $2.5 billion in the same quarter a year ago, part of a streak of six straight losing quarters. Freeport, a major global copper mining company, said it would remain focused on reducing its debt, which stood at $20.8 billion at the end of the quarter. "You should not be this leveraged," Chief Executive Richard Adkerson told analysts on a conference call Tuesday. When prices decline as part of a commodity downturn, "having this kind of debt is a killer," he said. Mr. Adkerson declined to discuss continuing asset sale negotiations, but said he felt "real good" about the talks. Freeport has agreed to sell $1.4 billion worth of assets this year, including selling a 13% stake in its Morenci copper mine in Arizona for $1 billion. Freeport said Tuesday it would cut 25% of the oil and gas workforce--or 325 jobs--as part of an overall restructuring in that business, and expected to post a related charge of around $40 million in the second quarter. The company said Tuesday it is evaluating options for the oil-and-gas business, including possible asset sales or joint-venture arrangements. Freeport made a big bet on oil and gas in 2013 when it bought McMoRan Exploration Co. and Plains Exploration & Production Co., which drill off the coast of California and in the Gulf of Mexico, for a total of $9 billion. The purchase, which loaded the company with debt, was followed by a steep decline in energy prices. The pressure on Freeport grew when activist investor Carl Icahn disclosed the purchase of a stake last August . Since Mr. Icahn disclosed his initial investment last August, Freeport has suspended its dividend, cut capital spending, and announced the resignation of longtime chairman James R. Moffett, an oil wildcatter who also developed the Grasberg mine in Indonesia, one of its so-called super mines. Freeport is still staking its future on its big copper mines, which remain profitable. The company on Tuesday said it expects to increase copper sales to five billion pounds in 2016, up around 25% from 2015, even though prices continue to putter between $2 and $2.5 per pound, half their level of five years ago. The company sold 1.1 billion pounds of copper in the first quarter, up 15% from 960 million pounds over the same period in 2015. Freeport attributed the increase to its Cerro Verde complex in southern Peru, another super mine, reaching full capacity in the first quarter. One of the top mines in the world, Cerro Verde is expected to produce over a billion pounds of copper in 2016, over 2% of global production. That expansion is also a big part of why Freeport said it had reduced unit cash costs per pound to $1.38 from $1.64 a year ago, "primarily reflecting higher copper sales volumes in South America and the impact of ongoing cost reduction initiatives." Keeping costs down is key. "Mining projects have long tails, and once you get past any significant investment, you have to finish," says Charles Bradford of Bradford Research, Inc. "But after you get these things finished, you can sometimes find efficiencies you hadn't built into your original cost model." Write to John W. Miller at john.miller@wsj.com and Tess Stynes at tess.stynes@wsj.com Credit: By John W. Miller and Tess Stynes
Subject: Copper industry; Financial performance; Copper; Mines; Mining; Sales
Location: United States--US California
People: Icahn, Carl C Moffett, James R Adkerson, Richard C
Company / organization: Name: Plains Exploration & Production Co; NAICS: 213112; Name: Freeport-McMoRan Copper & Gold Inc; NAICS: 212221, 212234
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784105643
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784105643?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
BP: Are Investors Already Banking on a Cash Flow Recovery? The U.K. oil giant's balancing act is harder than most
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
Oil and gas investors are focused on cash in the oil price slump for good reason: it pays the bills, notably for their dividends, and is less prone to be whipped about by accounting charges than profits.
Full text: There was good news and bad news buried in BP's first-quarter cash flow figures . The good news: things may be getting better. The bad news: it doesn't look good yet. Oil and gas investors are focused on cash in the oil price slump for good reason: it pays the bills, notably for their dividends, and is less prone to be whipped about by accounting charges than profits. BP's cash flow figures are hardly straightforward. It reported first-quarter operating cash flow of $1.9 billion. The company suffered an unusually large outflow of cash related to the 2010 Gulf of Mexico oil spill: adding that back gives BP's own "underlying" figure of $3 billion. Adjust for movements in working capital, which tend to be volatile quarter-to-quarter but even out longer term, and the first-quarter haul was about $3.8 billion. It isn't surprising that is weaker than any quarter last year, given oil's first-quarter average price of $34 a barrel. But with lower investment spending, at $3.9 billion, BP's cash shortfall has improved quarter-on-quarter, even if free cash flows remain far short of covering shareholders' dividends. BP's balancing act is harder than most. It plans to cover payments related to the oil spill through asset sale proceeds, a prop most peers are using to fund dividends: the fund that was previously covering these payments is now exhausted. Still, with costs falling and investment being pruned, the U.K. group thinks it can cover investment and dividends through operating cash flow next year at $50 to $55 a barrel, above current prices but below its previous target. There are problems, aside from the cash flow uplift required to meet that goal. The first is that cuts to investment still seem to be doing the lion's share of the work in bringing that break-even oil price down. BP said spending this year would be about $17 billion. It could slice another $2 billion from its previous guidance range for next year of $17-19 billion if oil prices stay at current levels, but concedes that wouldn't be ideal. The cuts have gone into muscle and are approaching bone. The second is that the market is running ahead of the company in balancing the books. Consensus forecasts for this year (and next) already had investment below $17 billion, according to FactSet. Analysts at Deutsche Bank argue that many European oil stocks are already pricing in a 2017 oil price of $55-60 a barrel. If improving cash flows are already baked into stock prices, it sets BP and others a high bar for making progress this year. Write to Helen Thomas at helen.thomas@wsj.com Credit: By Helen Thomas
Subject: Oil spills; Prices; Investments
Company / organization: Name: Deutsche Bank AG; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784141522
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784141522?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
S&P Strips Exxon of Triple-A Credit Rating; Exxon was one of very few American companies that had retained the top ranking
Author: Ailworth, Erin; Hufford, Austen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
Related * MoneyBeat: A Record Triple-A Run * Overheard: Exxon Has Its Priorities * MoneyBeat: Exxon Held Rating for Nearly 50 Years * Exxon Offers $12 Billion Bond Issue (Feb. 29) * S&P Cuts Ratings of 10 U.S. Oil Companies (Feb 2) But the company's willingness to go into debt to fund its capital spending and keep paying out dividends even as oil prices plunged from highs of over $100 a barrel to as low as $26 has taken a toll on its balance sheet .
Full text: Exxon Mobil Corp. was stripped Tuesday of the perfect triple-A credit rating it has held for more than six decades by Standard & Poor's Ratings Services, a sign that the oil bust is hurting even the strongest players in the energy industry. The world's largest publicly traded oil company, Exxon, was just one of three American companies--Microsoft Corp. and Johnson & Johnson are the others--that had the triple-A rating. S&P said it first gave the company the triple-A mark in 1949. A representative for Exxon said it had been triple-A since 1930, counting its predecessor companies. Related * MoneyBeat: A Record Triple-A Run * Overheard: Exxon Has Its Priorities * MoneyBeat: Exxon Held Rating for Nearly 50 Years * Exxon Offers $12 Billion Bond Issue (Feb. 29) * S&P Cuts Ratings of 10 U.S. Oil Companies (Feb 2) But the company's willingness to go into debt to fund its capital spending and keep paying out dividends even as oil prices plunged from highs of over $100 a barrel to as low as $26 has taken a toll on its balance sheet . Its total debt, which stood at $38.7 billion at the end of last year, has more than tripled since 2012, according to S&P Global Market Intelligence. "Nothing has changed in terms of the company's financial philosophy or prudent management of its balance sheet," Exxon spokesman Scott Silvestri said Tuesday. In downgrading Exxon by one notch to double-A-plus, S&P cited the company's rising debt level and said dividend payments and share repurchases "substantially exceeded" internally generated cash flow. U.S. government debt itself is ranked at double-A-plus. Earlier this year, Exxon sold $12 billion of new bonds in one of the biggest corporate-debt deals of the year. S&P said it expects Exxon to return cash to shareholders instead of reducing its debt. "Other AAAs have no debt or almost no debt and a lot of cash," said Ben Tsocanos, an analyst for the ratings agency, in a February interview. "Exxon is the only AAA company in a capital intensive industry. That should be kept in mind." The ratings downgrade isn't expected to affect Exxon's ability to borrow money. But the triple-A rating status--which Exxon managed to maintain in one form or another through the Great Depression, World War II, Arab oil embargo and several previous price crashes--had long been a point of pride for the Irving, Texas company. Exxon Chief Executive Rex Tillerson said during an interview with CNBC in March that he'd be disappointed if it lost the triple-A rating. "You know, over 90 years of being AAA, this is not the first time we've been through a period of this pretty extreme stress on the financial-model of the company," he said. "I hope we can maintain the rating 'cause it's important to us reputationally." Investors rely on ratings from S&P, Moody's Investors Service and Fitch Ratings when deciding whether to buy bonds. In February, S&P cut the ratings of 10 U.S. oil and gas exploration and production companies , citing the price decline. It also placed Exxon on watch for a possible downgrade, which was resolved with Tuesday's release. S&P said Exxon's outlook is stable. Also in February, Moody's Investors Service affirmed its triple-A rating for Exxon but placed the company on a negative outlook, saying it feared a diminished level of capital reinvestment could hurt Exxon's ability to replace reserves and hurt production in future years. It stood by that rating and outlook in an April 1 credit opinion. Peter Speer, an analyst with Moody's, said Exxon's problem is that it is completing complex, large-scale, expensive projects that don't work in the current low-price environment. "There will be higher prices in the future, but not returning anywhere to the prices we saw a few years ago," Mr. Speer said. Energy companies have suffered from a prolonged decline in oil and natural gas prices, with many severely cutting planned capital expenditures . The financial ratings industry has been under criticism in recent years stemming from the high-marks given to mortgage-backed securities, whose failure later caused the financial crisis. In Feb. 2015, S&P agreed to pay $1.5 billion to resolve litigation alleging it knowingly issued rosy grades of risky mortgage bonds before the crisis. Bradley Olson contributed to this article. Write to Erin Ailworth at Erin.Ailworth@wsj.com and Austen Hufford at austen.hufford@wsj.com Credit: By Erin Ailworth and Austen Hufford
Subject: Ratings & rankings; Bond issues; International finance; Securitization; Balance sheets; Investments; Capital expenditures; Energy industry
Location: United States--US
People: Tillerson, Rex W
Company / organization: Name: Microsoft Corp; NAICS: 511210, 334614; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450; Name: Johnson & Johnson; NAICS: 339113, 339115, 325412, 325611, 325620
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784193030
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784193030?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Statoil Earnings: What to Watch; Analysts expect Norwegian oil and gas company to post a net loss of $115 million on revenue of $11.56 billion
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
Global oil companies can look forward to a rough earnings season, on the back of weak first-quarter oil prices, including Brent's slump to 13-year lows below $30 a barrel in January.
Full text: Global oil companies can look forward to a rough earnings season, on the back of weak first-quarter oil prices, including Brent's slump to 13-year lows below $30 a barrel in January. Norway's Statoil ASA, Western Europe's largest oil and gas producer, is set to post earnings on Wednesday at 0500 GMT. Here's what you need to know about the 67% state-owned oil and gas producer, which is reporting in dollars for the first time: EARNINGS FORECAST: Analysts forecast a net loss of $115 million, compared with a net loss of $4.56 billion a year earlier, according to a FactSet survey. REVENUE FORECAST: Revenue is expected to be $11.56 billion, compared with $15.40 billion a year earlier. WHAT TO WATCH: PRICE PRESSURE: The company, like most of its peers, is suffering from weak prices, and has posted net losses in five out of the last six quarters, which has forced it to make deep cuts. Statoil expects to be cash flow neutral at $60 a barrel in 2017 and $50 a barrel in 2018, but is set to pick up more debt this year and the next. STRONGER KRONE: The company made deeper-than-expected cuts last year and in February boosted its cost-cutting plan by 50%, targeting $2.5 billion lower costs at the end of this year compared with 2013. However, the company has benefit from a very weak krone against the dollar, an effect that may be reversed if the krone continues to appreciate. INTERNATIONAL IMPAIRMENTS: Statoil's international segment is less resilient to weak prices than its Norwegian operations, and the market will be looking for news on more write-downs. The company recorded impairments of 63.3 billion kroner (about $7.73 billion) last year. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Net losses; Corporate profiles; Financial performance; Prices; Cost reduction
Location: Norway Western Europe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784268836
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784268836?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.N. Security Council Considers Sanctions Against Vessel Carrying Crude From East Libya; Oil sale could create revenue for eastern factions, affect Libyan peace agreement
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract:
By Libyan law, all crude oil and petroleum products must be sold via the internationally recognized National Oil Co., which has been deemed independent of the various militias that rule the North African nation but is based in the western capital of Tripoli.
Full text: LONDON--The United Nations Security Council is considering sanctions on the first oil tanker to load crude petroleum sold by the government ruling Libya's eastern half, diplomats familiar with the matter said Tuesday. The oil sale could create a lucrative revenue stream to Libya's eastern factions at an awkward moment for the fragile peace process. Libya has fractured along sectarian and geographic lines since the 2011 ouster and death of dictator Moammar Gadhafi, with the country splitting between two governments in the east and west that have sometimes been in violent conflict. A U.N.-backed unity government has taken power in Tripoli, though the eastern government doesn't recognize it. The U.N. measure being considered would impose current U.N. sanctions against selling Libyan oil outside legal channels directly onto a vessel that bought crude oil from the eastern government and set sail for Malta on Monday , the diplomats said. "It's under discussions," Libya's U.N. envoy, Ibrahim Dabbashi, told The Wall Street Journal. A vote could take place as early as Wednesday, the diplomats said. A U.N. press official in New York declined to comment. The U.N. imposed an array of sanctions on Libya to stop the flows of arms and finance to Gadhafi during a civil war and kept restrictions in place during an uncertain transition after his death and the emergence of a new conflict. By Libyan law, all crude oil and petroleum products must be sold via the internationally recognized National Oil Co., which has been deemed independent of the various militias that rule the North African nation but is based in the western capital of Tripoli. Complicating matters is that the eastern government once had international recognition from the U.N. and created its own state oil company. It has tried several times to export crude, but until now it had trouble finding shippers and buyers amid fears of legal action by the traditional National Oil Co. The first shipment to leave Libya--650,000 barrels of crude on Monday--was loaded at the Marsa al-Hariga port near the Egyptian border and is now offshore Malta, said a spokesman for the east's oil company Tuesday. The spokesman previously has said the cargo is owned by DSA Consultency FZE of Sharjah in the United Arab Emirates, which couldn't be reached. Libya's National Oil Co. in Tripoli has said that it had taken action to block the east's shipments . "We are working very hard with the international community" to stop the delivery, a company official said without elaborating. The company said it had ordered employees at the terminal not to load the tanker and warned the vessel's master that the operation was illegal. The company also said the U.N. had been notified of the attempted loading, saying it was in breach of a resolution on Libya. Libya's oil exports amount to about 300,000 barrels a day and represent the country's main source of revenue. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Sanctions; Diplomatic & consular services; Crude oil
Location: Malta Libya
People: Qaddafi, Muammar El
Company / organization: Name: United Nations Security Council; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784311569
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784311569?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Companies' Bet on Kurdistan Turns Sour; Geology, low prices and Islamic State dim promise of Iraqi region
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract: None available.
Full text: Oil companies that piled into Iraqi Kurdistan after Saddam Hussein's ouster are running into trouble, unraveling the region's promise as source of easy-to-drill oil and threatening Iraq's production surge. Chevron Corp. and Exxon Mobil Corp. have been exploring for oil in Kurdistan since 2012, but have yet to develop anything. Two of the region's leading producers are stumbling: Genel Energy PLC in February said its largest oil field had only half the oil it thought , while Gulf Keystone Petroleum Ltd. said it is running out of money to pay its debts because of low oil prices and the lack of regular payments from the Kurdistan Regional Government for the oil it has pumped. The regional government's Ministry of Natural Resources declined to comment. Any slowdown in Kurdistan's oil production could affect energy markets because previous drilling success there helped Iraqi output climb by almost 20% in 2015 to 3.99 million barrels a day--about 4% of global output. This mounting production contributed to a global glut and helped sink prices to $27 a barrel in January, the lowest level in 12 years. Kurdistan, a region about the size of Switzerland, was once believed to hold as much petroleum as the North Sea. It has been a magnet for Western investment in the past decade--a rarity in the Middle East, where most international oil companies are either banned from exploring for and pumping oil or are forced to work under stingy contracts. The regional government estimates Kurdistan has at least 45 billion barrels of oil to be found. The energy industry has long referred to these resources as "easy oil": onshore and pumpable with traditional methods, like fields in Saudi Arabia and Kuwait, where production can cost as little as $2 a barrel. That is far cheaper than more typical recent oil-and-gas developments, many of which are deep beneath the sea or embedded in shale rock, requiring costly drilling infrastructure and techniques. But these assumptions about Kurdistan oil are being questioned by some companies reviewing the geology--and not liking what they are finding. "Kurdistan is not easy oil," said one oil executive whose company has worked in the region. More of the oil requires additional techniques, such as horizontal drilling, than previously thought, the executive said. Much of it has turned out to be a type of crude described as heavy--harder to pump and refine and less valuable on international markets. That crude can also contain toxic and flammable hydrogen sulfide gas that requires additional investment to strip out, said Jessica Brewer, from energy consultancy Wood Mackenzie. "There's obviously large volumes of oil in place," she said. "It's how much can be recovered economically that is important." While oil production in Kurdistan grew to around 430,000 barrels a day in 2015 from virtually nothing a decade earlier, it is still well below earlier Kurdish government plans to be pumping one million barrels a day by now. Kurdistan became a magnet for Western investment after 2006, when the regional government unveiled attractive terms for international oil companies that weren't available in southern Iraq. The region had been largely ignored under Saddam Hussein's rule. But in 2011, former BP PLC chief Tony Hayward hailed Kurdistan as one of the industry's last great frontiers. Mr. Hayward engineered a $2.1 billion deal that year to take over Genel, the largest foreign oil producer in Kurdistan, and said the region's prospects "have never been brighter." Giants like Exxon, Chevron and France's Total SA followed, along with many other oil companies. Genel's prized field Taq Taq is currently producing only 80,000 barrels a day, around half of last year's peak output. By 2018, output is expected to fall to as low as 50,000 barrels a day. Mr. Hayward said the Taq Taq downgrade was a "major setback," but noted the company still had some of the lowest-cost producing assets in the world. Genel is to hold its annual general meeting on Wednesday. The company declined to comment further. Genel's announcement followed a steady stream of bad news for other oil companies' fields there. In January 2015, U.K.-listed Afren PLC said its Barda Rash field essentially held no reserves. In March, Irish explorer Petroceltic International PLC and the U.S.'s Hess Corp. pulled out of the Dinarta license, citing disappointing well results. In November, Chevron relinquished its Rovi block without explanation after drilling exploration wells. Exxon said its exploration operations continue in line with its contractual obligations. Afren, Petroceltic and Hess declined to comment. Kurdistan's producers were already in trouble before problems with the geology emerged. In 2014, Islamic State militants advanced on Kurdistan's borders coming within a few hours' drive of some of the oil fields. The Kurds' expensive fight against Islamic State has yielded some important victories in recent months, with the militant group on the defensive after intensified airstrikes by a U.S.-led coalition, but the threat remains. Kurdish oil exports were temporarily halted in February following an attack on a pipeline through Turkey. The regional government and Baghdad authorities argued over whom oil revenues belonged to, prompting the central government to withhold funding from the Kurds. In turn, the regional government fell behind by over a billion dollars in payments to international oil companies. The KRG is far from clearing the arrears, but has begun paying some of it back. "There are geopolitical challenges for the region--it's not for everybody," said Gulf Keystone Chief Executive Jón Ferrier. Gulf Keystone is weighed down by debt incurred when oil prices were high and relies on the Kurdish government's payments to meet its own repayments to bondholders. The company is facing crunchtime next year when $575 million is due and is looking to restructure its debt. However, Mr. Ferrier said the Shaikan field has enough oil to keep producing and generating revenue for at least 40 years. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784311591
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784311591?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The Feed: Where Olive Oil Stars; The new Sant Andrea Café pairs olive oil with dishes, plus Maille opens another mustard boutique
Author: Passy, Charles
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Apr 2016: n/a.
Abstract: None available.
Full text: Where Olive Oil Stars Many Italian restaurants make a point of using quality olive oil. But at Sant Andrea Café, a dining spot at Central Park South opening Sunday, the oil itself is something of the star attraction. The restaurant will use oils that match the flavors of the dish, not unlike pairings of food and wine. For example, a dish of thinly sliced beef with tomatoes, capers and olives will be complemented by an oil from the Campania region, while an oil from Umbria will accompany a Maine lobster dish. "Every oil is different," said chef Andrea Zanin, an Italian native and veteran of restaurants throughout Europe. Otherwise, the 165-seat eatery has a varied menu, reflecting both Italian and Italian-American influences, with entrees priced starting at $26. Sant Andrea Café, 40 Central Park South; santandreacafe.com More Mustard, Please Maille, the French mustard brand that opened its first New York boutique on the Upper West Side in late 2014, is expanding. The company just opened a second boutique in the Flatiron District, which will serve as a flagship. Maille is also launching make-your-own mustard classes at both locations: The one-hour tutorial ($59) will offer mustard lovers a chance to explore "different mustard tastes and pairings as well as mustard history and uses in different cultures," according to the company. Finally, Maille, which offers some of its mustards on tap, is offering vinegar on tap, too--specifically a vinegar made with Sauternes, the dessert wine of France's Bordeaux region. Maille, 927 Broadway (new location) and 185 Columbus Ave.; maille.com Introducing the Rockefeller Burger Bar SixtyFive, the bar at New York's famed Rainbow Room, has unveiled the Rockefeller Burger, a $65 mouthful of a sandwich made with 8 ounces of chef Robert Aikens "burger blend" (short rib, skirt steak, chuck and aged New York strip) and topped with house-cured pork-belly bacon, a truffle cheese and half of a Maine lobster. Oh, and if you're still hungry, the burger comes with fries--"triple-cooked truffle fries," to be exact. Bar SixtyFive at Rainbow Room, 30 Rockefeller Center; rainbowroom.com/sixtyfive Write to Charles Passy at cpassy@wsj.com Credit: By Charles Passy
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 26, 2016
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 178431179 0
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784311790?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Extend Rally; FOMC Meeting in Focus; June Brent crude rose $0.43 to $46.17 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
[...]strong domestic gasoline demand will be a major driver of overall Chinese crude demand as low prices and the rising number of vehicle ownership translate to greater fuel usage on the roads, the firm added.
Full text: Crude oil prices gathered more steam in early Asian trade Wednesday after settling at this year's highs overnight, driven by prospect of a dwindling glut. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $44.42 a barrel at 0140 GMT, up $0.38 in the Globex electronic session. June Brent crude on London's ICE Futures exchange rose $0.43 to $46.17 a barrel. Overnight, both benchmarks settled highest since Nov.10 and rose even more in the post-settlement trade after the American Petroleum Institute reported U.S. crude inventories likely decreased by 1.1 million barrels last week. Persistent surplus in the physical market has kept a lid on oil prices for almost two years. Despite the recent rally, prices are still much lower than the $100 mark back in mid 2014. Any indication of ebbing supply will boost risk-taking sentiment and drive prices higher. A survey of 14 analysts by The Wall Street Journal expects crude stocks to have risen by 1.7 million barrels, on average, in the week ended April 22. Gasoline stockpiles are expected to fall by 1.2 million barrels while stocks of distillates, which include heating oil and diesel, are expected to fall by 100,000 barrels, according to analysts. Official data from Energy Information Administration is due at 10:30 a.m. EDT Wednesday. "Rebounding oil prices have buoyed global equity market sentiments. This could continue in the months ahead. More evidence has surfaced about structural oil supply destruction, especially in the U.S., while global demand continues to set new highs, led by China and U.S. gasoline consumption," said Gordon Kwan, the head of regional oil and gas research at Nomura. In March, China's crude import rose 22% on-year, reached 32.6 million metric tons or 7.7 million barrels a day. As the government continues to fill up its strategic reserves as well as grant more importing licenses to local independently-owned refiners known as teapots, China's thirst for foreign crude will stay elevated, analysts said. "We attribute this increase to strong demand from independent teapot refineries and attractive margins for certain light products, notably gasoline, which fuelled refiners' appetite for processing crude," said BMI Research. Moreover, strong domestic gasoline demand will be a major driver of overall Chinese crude demand as low prices and the rising number of vehicle ownership translate to greater fuel usage on the roads, the firm added. In the near term, market participants will be watching the outcome of the U.S. Federal Reserve policy meeting later today. The Fed could drop hints after its meeting about future interest-rate increases and the strength of the U.S. economy. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--rose 149 points to $1.5809 a gallon, while May diesel traded at $1.3474, 149 points higher. ICE gas oil for May changed hands at $401.25 a metric ton, up $4.25 from Tuesday's settlement. Nicole Friedman contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Price increases; Gasoline; Supply & demand
Location: China
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784324863
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784324863?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil-Price Jump Lifts Energy Stocks
Author: Josephs, Leslie; Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Apr 2016: C.4.
Abstract:
Twitter shares were down 14% in postmarket trading after the social-media company reported revenue below analysts' expectations and issued a downbeat outlook for second-quarter revenue.
Full text: Energy shares rose as U.S. oil prices settled at a new 2016 high, while major U.S. stock indexes drifted higher ahead of a monetary-policy update from the Federal Reserve. Investors don't expect the Fed to raise interest rates this week, but they will look for hints about the strength of the U.S. economy and whether officials might act in June. U.S. oil futures settled at a five-month high as the dollar weakened and traders bet on a continued decline in U.S. production. U.S. oil prices have climbed 68% from a 13-year low reached in February on expectations that production would decline in the U.S. and elsewhere and that demand would remain robust. Still, there are few signs that the global oversupply of crude oil is shrinking, analysts say. Light, sweet crude for June delivery rose $1.40, or 3.3%, to $44.04 a barrel on the New York Mercantile Exchange, the highest settlement since Nov. 10. Energy shares in the S&P 500 rose 1.4%, the most of any sector. The energy sector is up close to 12% this year but is down more than 16% over the past 12 months. "You have to be a little cautious in some of these energy names," said Bill Nichols, head of U.S. equities at Cantor Fitzgerald. The Dow Jones Industrial Average added 13.08 points, or 0.1%, to 17990.32. The S&P 500 rose 3.91 points, or 0.2%, to 2091.70. Trading volume of 6.39 billion shares was below the daily average for 2016. "No one is rushing to the exits," said Gordon Charlop, managing director at brokerage Rosenblatt Securities. The tech-heavy Nasdaq Composite fell for a fourth session -- its longest losing streak since January -- dropping 7.50 points, or 0.2%, to 4888.28. Apple shares fell 8.2% in after-hours trading. The iPhone maker reported its first drop in revenue since 2003 and iPhone sales fell for the first time ever in the latest quarter. Twitter shares were down 14% in postmarket trading after the social-media company reported revenue below analysts' expectations and issued a downbeat outlook for second-quarter revenue. Procter & Gamble was the biggest laggard in the Dow, dropping $1.86, or 2.3%, to $79.55, shaving nearly 13 points off the index. The maker of household products such as Bounty paper towels reported higher profit but issued a downbeat earnings outlook. Hershey fell 1.77, or 1.9%, to 89.60 after the candy maker said its profit and revenue declined in the last quarter. Whirlpool fell 6.61, or 3.6%, to 179.43 after the appliance company posted lower profit. Health-care shares in the S&P 500 slipped 0.4%. Eli Lilly fell 1.67, or 2.1%, to 76.27 after the drugmaker cut its profit forecast for the year. The yield on the 10-year Treasury note rose for the seventh consecutive session, to 1.931%, from 1.902% on Monday, as prices fell. The last time the yield settled above 2% was in late January. Meanwhile, many investors expect the Bank of Japan to ease policy further Thursday amid a recent strengthening of the yen and weakening of corporate sentiment and inflation expectations. Japan's Nikkei Stock Average fell 0.5% Tuesday. The Stoxx Europe 600 edged up 0.2%, with banks and energy companies leading gains. Credit: By Leslie Josephs and Nicole Friedman
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Apr 27, 2016
column: Tuesday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784402747
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784402747?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Oil Companies' Bets on Kurdistan Turn Sour
Author: Williams, Seli na
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Apr 2016: B.2.
Abstract:
Genel Energy PLC in February said its largest oil field had only half the oil it thought, while Gulf Keystone Petroleum Ltd. said it is running out of money to pay its debts because of low oil prices and the lack of regular payments from the Kurdistan Regional Government for the oil it has pumped. Any slowdown in Kurdistan's oil production could affect energy markets because previous drilling success there helped Iraqi output climb by almost 20% in 2015 to 3.99 million barrels a day -- about 4% of global output.
Full text: Oil companies that piled into Iraqi Kurdistan after Saddam Hussein's ouster are running into trouble, unraveling the region's promise as source of easy-to-drill oil and threatening Iraq's production surge. Chevron Corp. and Exxon Mobil Corp. have been exploring for oil in Kurdistan since 2012, but have yet to develop anything. Two of the region's leading producers are stumbling: Genel Energy PLC in February said its largest oil field had only half the oil it thought, while Gulf Keystone Petroleum Ltd. said it is running out of money to pay its debts because of low oil prices and the lack of regular payments from the Kurdistan Regional Government for the oil it has pumped. The regional government's Ministry of Natural Resources declined to comment. Any slowdown in Kurdistan's oil production could affect energy markets because previous drilling success there helped Iraqi output climb by almost 20% in 2015 to 3.99 million barrels a day -- about 4% of global output. This mounting production contributed to a global glut and helped sink prices to $27 a barrel in January, the lowest level in 12 years. Kurdistan, a region about the size of Switzerland, was once believed to hold as much petroleum as the North Sea. It has been a magnet for Western investment in the past decade -- a rarity in the Middle East, where most international oil companies are either banned from exploring for and pumping oil or are forced to work under stingy contracts. The regional government estimates Kurdistan has at least 45 billion barrels of oil to be found. The energy industry has long referred to these resources as "easy oil": onshore and pumpable with traditional methods, like fields in Saudi Arabia and Kuwait, where production can cost as little as $2 a barrel. That is far cheaper than more typical recent oil-and-gas developments, many of which are deep beneath the sea or embedded in shale rock, requiring costly drilling infrastructure and techniques. But these assumptions about Kurdistan oil are being questioned by some companies reviewing the geology -- and not liking what they are finding. "Kurdistan is not easy oil," said one oil executive whose company has worked in the region. More of the oil requires additional techniques, such as horizontal drilling, than previously thought, the executive said. Much of it has turned out to be a type of crude described as heavy -- harder to pump and refine and less valuable on international markets. That crude can also contain toxic and flammable hydrogen sulfide gas that requires additional investment to strip out, said Jessica Brewer, from energy consultancy Wood Mackenzie. "There's obviously large volumes of oil in place," she said. "It's how much can be recovered economically that is important." While oil production in Kurdistan grew to around 430,000 barrels a day in 2015 from virtually nothing a decade earlier, it is still well below earlier Kurdish government plans to be pumping one million barrels a day by now. Kurdistan became a magnet for Western investment after 2006, when the regional government unveiled attractive terms for international oil companies that weren't available in southern Iraq. The region had been largely ignored under Saddam Hussein's rule. But in 2011, former BP PLC chief Tony Hayward hailed Kurdistan as one of the industry's last great frontiers. Mr. Hayward engineered a $2.1 billion deal that year to take over Genel, the largest foreign oil producer in Kurdistan, and said the region's prospects "have never been brighter." Giants like Exxon, Chevron and France's Total SA followed, along with many other oil companies. Genel's prized field Taq Taq is currently producing only 80,000 barrels a day, around half of last year's peak output. By 2018, output is expected to fall to as low as 50,000 barrels a day. Mr. Hayward said the Taq Taq downgrade was a "major setback," but noted the company still had some of the lowest-cost producing assets in the world. Genel is to hold its annual general meeting on Wednesday. The company declined to comment further. Genel's announcement followed a steady stream of bad news for other oil companies' fields there. In January 2015, U.K.-listed Afren PLC said its Barda Rash field essentially held no reserves. In March, Irish explorer Petroceltic International PLC and the U.S.'s Hess Corp. pulled out of the Dinarta license, citing disappointing well results. In November, Chevron relinquished its Rovi block without explanation after drilling exploration wells. Exxon said its exploration operations continue in line with its contractual obligations. Afren, Petroceltic and Hess declined to comment. Kurdistan's producers were already in trouble before problems with the geology emerged. In 2014, Islamic State militants advanced on Kurdistan's borders coming within a few hours' drive of some of the oil fields. The Kurds' expensive fight against Islamic State has yielded some important victories in recent months, with the militant group on the defensive after intensified airstrikes by a U.S.-led coalition, but the threat remains. Kurdish oil exports were temporarily halted in February following an attack on a pipeline through Turkey. The regional government and Baghdad authorities argued over whom oil revenues belonged to, prompting the central government to withhold funding from the Kurds. In turn, the regional government fell behind by over a billion dollars in payments to international oil companies. The KRG is far from clearing the arrears, but has begun paying some of it back. "There are geopolitical challenges for the region -- it's not for everybody," said Gulf Keystone Chief Executive Jon Ferrier. Gulf Keystone is weighed down by debt incurred when oil prices were high and relies on the Kurdish government's payments to meet its own repayments to bondholders. The company is facing crunchtime next year when $575 million is due and is looking to restructure its debt. However, Mr. Ferrier said that the Shaikan field has enough oil to keep producing and generating revenue for at least 40 years. Credit: By Selina Williams
Subject: Oil fields; Energy industry; Petroleum production
Location: Iraq Kurdistan
Company / organization: Name: Gulf Keystone Petroleum Ltd; NAICS: 211111; Name: Chevron Corp; NAICS: 211111, 324110; Name: Genel Energy PLC; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Classification: 8510: Petroleum industry; 9179: Asia & the Pacific
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: Apr 27, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784402756
Document URL: https://login.ezp roxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784402756?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Exxon Loses Its Triple-A Rating
Author: Ailworth, Erin; Hufford, Austen
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Apr 2016: B.2.
Abstract:
Exxon Mobil Corp. was stripped Tuesday of the perfect triple-A credit rating it has held for more than six decades by Standard & Poor's Ratings Services, a sign that the oil bust is hurting even the strongest players in the energy industry.
Full text: Exxon Mobil Corp. was stripped Tuesday of the perfect triple-A credit rating it has held for more than six decades by Standard & Poor's Ratings Services, a sign that the oil bust is hurting even the strongest players in the energy industry. The world's largest publicly traded oil company, Exxon, was just one of three American companies -- Microsoft Corp. and Johnson & Johnson are the others -- that had the triple-A rating. S&P said it first gave the company the triple-A mark in 1949. A representative for Exxon said it had been triple-A since 1930, counting its predecessor companies. But the company's willingness to go into debt to fund its capital spending and keep paying out dividends even as oil prices plunged from highs of over $100 a barrel to as low as $26 has taken a toll on its balance sheet. Its total debt, which stood at $38.7 billion at the end of last year, has more than tripled since 2012, according to S&P Global Market Intelligence. "Nothing has changed in terms of the company's financial philosophy or prudent management of its balance sheet," Exxon spokesman Scott Silvestri said Tuesday. In downgrading Exxon by one notch to double-A-plus, S&P cited the company's rising debt level and said dividend payments and share repurchases "substantially exceeded" internally generated cash flow. U.S. government debt itself is ranked at double-A-plus. Earlier this year, Exxon sold $12 billion of new bonds in one of the biggest corporate-debt deals of the year. S&P said it expects Exxon to return cash to shareholders instead of reducing its debt. The ratings downgrade isn't expected to affect Exxon's ability to borrow money. But the triple-A rating status had long been a point of pride for the Irving, Texas, company. Credit: By Erin Ailworth and Austen Hufford
Subject: International finance; Credit ratings
Location: United States--US
Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110
Classification: 8510: Petroleum industry; 3100: Capital & debt management; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: Apr 27, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784402765
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784402765?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Statoil Swings to Net Profit in First Quarter; Weaker oil prices partly offset by cost cuts
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
The 67% state-owned company has dramatically reduced its capital spending and slashed costs, and last year recorded significant write-downs, notably on its unconventional assets in the U.S. "The industry is facing challenges," Statoil Chief Executive Eldar Saetre said.
Full text: OSLO--Norway's Statoil ASA said Wednesday it swung to a first-quarter net profit as weaker oil prices were partly offset by cost cuts and $308 million in impairment reversals. The company said its net profit for the three months through March was $607 million, compared with a net loss of $4.58 billion a year earlier, when it recorded huge write-downs. Analysts had expected a net loss of $115 million. Revenue fell 34% on the year to $10.09 billion, against expectations of $11.56 billion. Statoil said it had reversed impairments by $308 million due to improved production profiles and lower operating and capital expenditures. In the year-ago period, the company wrote down the value of its assets by nearly $6 billion, mainly in U.S. onshore unconventional assets. Nearly two years of tanking oil prices has forced the global oil industry, including Statoil, to delay projects and slash spending. The 67% state-owned company has dramatically reduced its capital spending and slashed costs, and last year recorded significant write-downs, notably on its unconventional assets in the U.S. "The industry is facing challenges," Statoil Chief Executive Eldar Saetre said. "We have a firm plan to improve efficiency and make faster and deeper cost reductions. We are radically improving our project break-evens and we are on track to reset costs." Adjusted earnings, a measure of the company's underlying performance, dropped to a record-low of $857 million from $2.95 billion a year earlier, but beat analyst expectations of $589 million. Statoil was paid an average of $29 a barrel for its crude in the first quarter, down from $47 a barrel a year earlier. Production was flat at 2.05 million barrels of oil equivalent a day. If oil prices stay low, oil companies may need to take on more debt to fund dividends and capital expenditure. Statoil's gearing--or debt as a percentage of its capital--rose to 28.1% at the end of the first quarter, from 26.8% at the end of 2015. The company maintained its dividend at $0.2201 per share. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Net losses; Financial performance; Capital expenditures
Location: Norway United States--US
Company / organization: Name: Statoil ASA; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784403035
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Total Profit Falls but Beats Expectations; Earnings suggest management of oil turbulence is proving effective
Author: Landauro, Inti
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
PARIS--French oil giant Total SA said its net profit fell 40% during the first quarter of 2016 compared with a year earlier, despite large cost cuts and an elevated level of production.
Full text: PARIS--Total SA's earnings were hit hard in the first quarter Wednesday as the lowest oil prices in a decade continued to ravage the industry, but a better-than-expected net profit suggested the company's management of the turmoil is bearing fruit. Net profit fell 40% to $1.61 billion, from $2.66 billion a year earlier and beating analyst expectations of $1.14 billion. Sales fell 22% to $32.84 billion. The company boosted output to a 10-year record of 2.48 million barrels of oil equivalent a day in the first quarter, boosting its exploration-and-production division, known as upstream. Total said it had squeezed the technical cost of extracting oil and gas down to $23 a barrel in 2015. The company said its rivals' technical costs were in the range of $26 to $44 during the year, though those companies haven't released costs for the first quarter. "The upstream portfolio benefited from the lowest technical costs among the majors," Chief Executive Patrick Pouyanné said in a statement. Shares in the company were up 1.9% Wednesday morning. Total said it had made progress in obtaining financing to develop the $27 billion Yamal natural-gas project in the Russian Arctic. About $4 billion from Russian banks is being finalized, Chief Financial Officer Patrick de la Chevardiere said in a call with analysts, and a further $12 billion is still being sought from Chinese banks. Total has been cut off from Western financing for the project because one of its partners, OAO Novatek, is a target of U.S. sanctions against Russia in retaliation for Moscow's actions in Ukraine. The financing negotiations have dragged on for over a year. Total's better-than-expected financial performance occurred during a quarter of low expectations, when oil prices averaged below $35 a barrel, down from more than $100 a barrel in 2014. Other large oil companies have also surprised this week with relatively strong results in the face of low prices. BP PLC on Tuesday posted better-than-expected results that sent its shares up over 4%. The company posted a profit of over $500 million when one-time charges like costs associated with the 2010 Gulf of Mexico were stripped out. Statoil ASA said its net profit had risen to more than $600 million, despite getting paid an average of $29 a barrel for its oil, down from $47 a barrel a year earlier. The Norwegian company credited its performance to deep cost cuts and the reversal of some impairment charges taken last year. Total's adjusted net operating profit in the upstream business of $498 million was down from $1.36 billion, though. One headwind for large oil companies has been falling profit margins in their refining businesses. This arm of the company, known as downstream, tends to do well when oil prices are low because it buys that cheap crude and then turns it into products like gasoline to be sold at higher prices. Even though refining margins are contracting, Total still managed to raise adjusted net operating profit from refineries and chemicals by 3% to $1.13 billion, a much slower pace than in previous quarters. Analysts expected the downstream unit performance would be even worse. The company has said it is on track to cut its operating costs by $900 million this year and plans to cut its capital investment to below the $19 billion target it had set two months ago, down from $23 billion in 2015. Total also said it would meet its target to sell assets worth $4 billion this year. Write to Inti Landauro at inti.landauro@wsj.com Credit: By Inti Landauro
Subject: Corporate profits; Costs; Financial performance
People: Pouyanne, Patrick
Company / organization: Name: Total SA; NAICS: 447190, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784403341
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784403341?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Laid-Off Oil Workers Struggle to Pay Loans, Credit Cards; Rising unemployment in the energy sector is pushing up loan delinquencies and raising the risk of new losses for banks
Author: Andriotis, AnnaMaria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
Auto-loan delinquency rates at Pinnacle Bank jumped to just over 1% of outstanding loan dollars in the fourth quarter of 2015 from 0.1% in the year-ago period, according to data provider S&P Global Market Intelligence.
Full text: The slump in crude prices is starting to show up as missed payments by consumers in the oil patch. In states from Oklahoma and Texas to North Dakota and Wyoming, rising unemployment in the energy sector is pushing up loan delinquencies and raising the risk of new losses for banks. Wells Fargo & Co. this month reported an increase in borrowers falling behind on payments in areas including Houston and parts of Alaska. J.P. Morgan Chase & Co. said auto-loan delinquency rates picked up in some energy-related markets. Overall, energy-dependent states are posting delinquency rates that in many cases exceed the national average, according to data prepared for The Wall Street Journal by credit bureau TransUnion. "In these energy states, we are clearly seeing the impact of the loss of oil jobs," said Ezra Becker, senior vice president and head of research at TransUnion. "We don't expect to see any kind of material improvement in the short term." Related * Oil Sets Another 2016 High Some 119,600 oil and gas jobs nationwide have been eliminated--22% of the total--since September 2014, according to the Federal Reserve Bank of Dallas. The price of U.S.-traded oil, while on the rise this year, has dropped 28% since June. Some analysts have warned that persistent crude oversupply could prevent further price gains. Car loans and credit cards have been affected the most, and there are some early signs of delinquency-rate increases in borrowers who can't make mortgage payments. Moody's Investors Service said the share of borrowers in oil-focused areas falling 30 days behind on a pool of Freddie Mac mortgages, while low at 0.38% in December, began to exceed the average elsewhere in the country last summer. The average for other areas was 0.29% in December. A Freddie Mac spokesman said the company doesn't publicly report 30-day delinquencies, but said its national delinquency rate for mortgages that are 90 days or more past due has been on a steady downward trend. Declining oil prices overall have been a boon to consumers--and their lenders--in most other parts of the country, where they are paying less at the pump and have more cash to spend or pay down debts. But the uptick in late payments is a blemish on what has been a strong run for consumer credit, adding another measure of pain for banks already struggling with souring loans to oil and gas drillers. Some of the hardest hit states--Wyoming, Oklahoma and North Dakota--have had unemployment rates rise in March from the year-ago month, while the national average has declined, according to the Bureau of Labor Statistics. While delinquency rates overall are still low, the regional trend risks hurting profits at smaller banks, potentially leading to tighter standards for loans like mortgages and home-equity lines of credit. "Do I expect delinquencies to be on the rise? Absolutely," said Doug Weedin, president of Pinnacle Bank-Wyoming, a community bank with about $710 million in assets, based in Cody. Auto-loan delinquency rates at Pinnacle Bank jumped to just over 1% of outstanding loan dollars in the fourth quarter of 2015 from 0.1% in the year-ago period, according to data provider S&P Global Market Intelligence. Delinquencies could rise given the large number of layoffs in Pinnacle's region over the past two months that Mr. Weedin said aren't reflected in the latest data. Wyoming's oil, gas and mining industries account for roughly 70% of the state's revenue, according to the governor's office. There were an estimated 10,200 workers employed in oil and gas extraction and support jobs as of March, down 25% from a year ago, according to the state's Department of Workforce Services. On Tuesday, crude for June delivery gained $1.40, or 3.3%, to $44.04 a barrel on the New York Mercantile Exchange, its highest settlement price since November. The concerns about loan performance in energy markets is a turnaround for regions that were considered to be among the safest for consumer lending. Borrowers in many of these areas weathered the recession relatively well. Yet as oil prices remain at low levels and companies lay off employees, more oil workers are finding themselves out of a job and unable to pay bills. Mary Dominguez, 53 years old, lost her job in December as an administrative assistant in Odessa, Texas, at a company that provides maintenance and other services to oil companies. She has since fallen behind on her car-loan payments and is avoiding calls from her lender. Instead of paying her credit-card bills in full each month, she is paying only the minimum and is carrying a balance of about $3,500, she said. "Every morning I wake up and think, 'I hope my car is there,' " she said. In Oklahoma and Texas, 1.7% and 1.8% of credit-card users, respectively, were at least 90 days behind on payments in the first quarter, an increase of about 0.22 percentage point from a year earlier, according to TransUnion. Credit-card delinquency rates in both states have been rising at about twice the rate of the U.S. as a whole, TransUnion said. In North Dakota--where delinquencies have been among the lowest nationwide--missed payments on car loans are rising even faster than in Texas and Oklahoma, according to TransUnion. Credit-card and auto-loan delinquencies in most energy-dependent states are still low, ranging between 1% and 2%. In some cases, unemployment has spilled over into other sectors. Oklahoma City's public school district said last month that it would lay off more than 200 teachers due to lower-than-expected tax revenue. About 100 schools in the state have moved or are in the process of moving to a four-day week to save money. In February, a hospital in Sayre, Okla., shut down, with falling oil revenue as a contributor to its financial strain. "Job losses have been fairly significant," said Michael Plante, senior research economist at the Dallas Fed. "We have seen signs that broader economic activity has been impacted by the slowdown." Large banks have responded to the rise in delinquencies in energy-focused states by tightening mortgage standards, including requiring larger down payments on home loans. Wells Fargo said it was less likely to give out mortgages with high loan balances relative to the value of the home in some oil-reliant areas. J.P. Morgan Chase lowered loan-to-value ratios earlier this year in Houston for homeowners seeking to withdraw cash from their homes while refinancing. Capital One Financial Corp. Chief Executive Richard Fairbank reported small increases in credit-card delinquencies in Houston and parts of North Dakota in January and said the bank had made changes to its underwriting in those areas. Foreclosure activity is starting to rise in some states. For Oklahoma, March was the seventh straight month of year-over-year increases in foreclosure starts, when borrowers stop making payments and banks begin the foreclosure process, according to real-estate data company RealtyTrac. Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com Credit: By AnnaMaria Andriotis
Subject: Delinquency; Lines of credit; Crude oil prices; Energy industry; Mortgage companies
Location: Wyoming United States--US Texas Oklahoma North Dakota
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: Freddie Mac; NAICS: 522294; Name: Bureau of Labor Statistics; NAICS: 921110, 923110; Name: Federal Reserve Bank of Dallas; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Markets
Publisher: Dow Jones & Compan y Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784426140
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784426140?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Huge Oil Spill From 2010 Still Shadows BP
Author: Kent, Sarah; Matthews, Christopher M
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Apr 2016: B.1.
Abstract:
BP has said the $20 billion agreement that it reached last July -- and which was approved by a federal judge earlier this month -- to settle Clean Water Act Penalties and claims from several Gulf Coast states gave it certainty over the spill's largest potential liabilities.
Full text: Corrections & Amplifications The 2010 explosion of BP PLC's Macondo well resulted in the spilling of more than 3 million barrels of oil into the Gulf of Mexico over 87 days. An article Wednesday about BP's continuing costs related to the disaster incorrectly said the spill released more than 3 million barrels a day over 87 days. In addition, Daniel Jacobs, a former lawyer in the Justice Department's environmental division, no longer lectures at American University. The article incorrectly said he still lectures there. (WSJ April 28, 2016) Six years after a deadly blowout sent a slick of oil floating along the Gulf Coast for months, BP PLC disclosed almost $1 billion in fresh charges that bring its total bill from the disaster to more than $56 billion and counting. The British oil giant is struggling to control the spiraling costs even though it reached a roughly $20 billion agreement -- among the largest corporate penalties in U.S. history -- to resolve all state and federal claims and was supposed to close a chapter on the spill. But separate lawsuits related to the Macondo well blowout off the Louisiana coast have inflated the bill further and could drag on for years, reflecting the enormous level of legal complexity surrounding the spill, legal experts said. BP's penalties already dwarf the fines levied on individual banks involved in the subprime mortgage crisis or the 1989 Exxon-Valdez spill, which cost the company then known as Exxon $4.3 billion. BP on Tuesday said it couldn't predict how much more costs would go up. "It's impossible to come up with a best estimate," Chief Financial Officer Brian Gilvary told analysts. The mounting bills drew renewed attention on Tuesday, when the company reported a $485 million quarterly net loss that was largely caused by an unexpected $917 million charge mostly related to a separate settlement with Gulf Coast businesses and residents harmed by the spill. The settlement has grown by $5 billion during the past four years. BP's shares rose 4.3% on Tuesday, as its financial performance beat analysts' expectations for a three-month period when oil prices averaged $34 a barrel -- the lowest in over a decade. Shares settled at their highest level since January. "Given Macondo risk is behind us (except for the Hollywood movie in [September]) we think the stock is too cheap," Bernstein Research analyst Oswald Clint said in a note, referring to the coming disaster drama "Deepwater Horizon." The movie, which stars Mark Wahlberg, takes its name from the drilling rig destroyed in the explosion. BP has said the $20 billion agreement that it reached last July -- and which was approved by a federal judge earlier this month -- to settle Clean Water Act Penalties and claims from several Gulf Coast states gave it certainty over the spill's largest potential liabilities. "We can now chart our own course," Chairman Carl-Henric Svanberg told investors earlier this month. BP could have faced billions of dollars in fines more than what it settled for. Moody's Investors Service maintained its positive outlook for BP's debt but said continuing costs related to the spill would drag on the company's earnings and cash flow. The Macondo well exploded on April 20, 2010, killing 11 workers and releasing more than 3 million barrels of oil a day into the Gulf of Mexico over 87 days. The spill hurt the Gulf fishing industry, killed untold numbers of wildlife and caused health complaints from people who helped cleanup efforts. The company's costs began mounting soon after. In 2010 it set aside an initial $40.9 billion to cover spill costs, including its efforts to cap the well and a $20 billion compensation fund for victims. The spill forced BP to sell more than $40 billion in assets, pull back its ambitions and craft its business around a smaller set of high-value oil and gas fields. The continuing fallout from the massive oil spill is weighing on the company during an exceptionally difficult period for the energy sector, with oil prices hitting a 13-year low during the first quarter. A glut in global crude supply is dragging down earnings across the industry and forcing painful spending cuts. To date, BP has incurred legal and cleanup costs of $56.4 billion, including nearly $9 billion in government fines and more than $8 billion on environmental cleanup. The company still has a host of claims facing it falling into several categories, attorneys involved said. There is the company's 2012 class-action settlement with more than 100,000 Gulf Coast residents. BP initially estimated that settlement would cost it $7.8 billion, but that figure has since ballooned to $12.9 billion, including $600 million more in the first quarter. The company said it has processed more than two-thirds of the claims related to the 2012 settlement, but the final cost is likely to be significantly higher. There are also costs for certain civil claims outside of the 2012 settlement on economic, property or medical damage claims, said Brent Coon, a Texas lawyer representing spill victims. And businesses in the real estate, gaming and financial industry have yet to settle with BP. Mr. Coon represents some 3,000 victims who opted out of the 2012 settlement and are still pursuing claims against the company. Mr. Coon said there were likely more than 5,000 people who opted out. Those claims will ultimately be decided by the same New Orleans court that handled the settlements in 2012 and 2015. Daniel Jacobs, a former lawyer in the Justice Department's environmental division and now a lecturer at American University in Washington, D.C., said that a group of securities class-action lawsuits against BP in Houston could represent the company's largest remaining legal exposure to the spill. Investors who bought BP stock in the days after the well blowout who claim the company misled them about the extent of the spill are suing in Houston federal court, seeking more than $2 billion in damages, according to court filings. The suit has survived BP's efforts to dismiss it, and could go to trial. Mr. Jacobs said those suits could cost the company billions of dollars. BP has said the claims are without merit. BP is expected to begin paying off the $20 billion federal settlement later this year, with payments made expected to average around $1.1 billion annually over a period of 18 years. The company said it plans to sell assets to cover the cost of settlement payments.
Credit: Sarah Kent, Christopher M. Matthews
Subject: Fines & penalties; Settlements & damages; Oil spills; Environmental cleanup; Damage claims
Location: Gulf of Mexico
Company / organization: Name: BP PLC; NAICS: 211111, 324110, 447110
Classification: 8510: Petroleum industry; 9175: Western Europe
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Apr 27, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784427435
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784427435?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permis sion of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Sets Another 2016 High; Increase comes as Fed signals less concern about global economic risks
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
Oil prices set a new 2016 high Wednesday in volatile trading after Federal Reserve officials left interest rates unchanged, signaling less concern about risks posed to the U.S. economy by global financial conditions.
Full text: Oil prices set a new 2016 high Wednesday in volatile trading after Federal Reserve officials left interest rates unchanged, signaling less concern about risks posed to the U.S. economy by global financial conditions. With oil prices surging to their highest level since early November, the market looked past a surprise jump in U.S. crude stockpiles in official weekly data from the U.S. Energy Department. The benchmark U.S. crude contract ended 2.9% higher at $45.33 a barrel on the New York Mercantile Exchange, while the global Brent contract rose 3.1% to $47.18 a barrel. The market started the day jumping to new highs on data from the American Petroleum Industry trade group indicating a 1.1 million-barrel decline in U.S. oil inventories last week. But the official data from the U.S. Energy Department released midmorning Wednesday showed stored supplies actually rose nearly 2 million barrels, and the market gave back all its gains and more. Analysts surveyed by The Wall Street Journal expected a 1.7 million-barrel increase. Prices rallied again Wednesday afternoon after the release of the policy statement from the Federal Open Market Committee. The Fed left interest rates unchanged and signaled it plans to move cautiously, but it also removed language from last month's statement saying global economic and financial conditions posed risks to their outlook. While minor, that change may have signaled an expectation of improving conditions in emerging economies, which the oil market looks to as a key source of demand growth. "The elimination of international elements in the language may mean that the market feels that the international situation is improving, and we'll get a bit of demand from emerging markets which wasn't there," said Robert Yawger, director of the futures division at Mizuho Securities USA. Market bulls have been optimistic that the two-year glut of overproduction in the crude market is beginning to abate, and supply-and-demand conditions are starting to come back into balance. That has fueled a more-than 70% rally in U.S. crude prices since touching a 13-year low in February. U.S. oil production has fallen below 9 million barrels a day in recent weeks, down from a peak of 9.7 million barrels a day last April, according to the Energy Department. But the rate of decline remains slow, dropping 15,000 barrels last week to 8.938 million barrels a day. The report also said inventories at the key U.S. hub in Cushing, Okla., rose 1.75 million barrels, more than expected. One bright spot in the report was a decline in distillate stocks such as diesel fuel, which are falling as demand picks up with the start of the farming season. But "the EIA weekly crude supply data exerted only a passing and limited impact," research consultancy Ritterbusch and Associates said in a note. In refined product markets, gasoline futures rose 0.9% to $1.5808 a gallon, and diesel futures rose 3.5% to $1.3795 a gallon. Corrections & Amplifications: U.S. oil has rallied more than 70% since hitting a 13-year low in February. An earlier version of this article incorrectly stated it was a 13-month low. (April 27) Write to Christian Berthelsen at christian.berthelsen@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Christian Berthelsen and Georgi Kantchev
Subject: Interest rates; Inventory; Futures; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Federal Open Market Committee--FOMC; NAICS: 921130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784429407
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784429407?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
National Bank of Abu Dhabi Feels Strain of Low Oil Prices; Lender posts an 11% fall in profit as it sets aside more money against unpaid loans
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
DUBAI--National Bank of Abu Dhabi on Wednesday posted an 11% drop in first-quarter profit as deposits fell and the lender set aside more money against bad loans, an illustration of how low oil prices are straining the Persian Gulf banking sector.
Full text: DUBAI--National Bank of Abu Dhabi on Wednesday posted an 11% drop in first-quarter profit as deposits fell and the lender set aside more money against bad loans, an illustration of how low oil prices are straining the Persian Gulf banking sector. NBAD's net profit for the quarter that ended March 31 fell to 1.27 billion dirhams ($346 million) from 1.42 billion dirhams in the same period in 2015. Revenue for the same period inched 1.2% lower to 2.65 billion dirhams. One of the largest lenders in the United Arab Emirates, NBAD serves as one of the principal financiers of its owner, the government of Abu Dhabi. The oil-rich emirate, like other governments in the Persian Gulf, is trying to diversify its economy by promoting the private- and non-oil sector to offset a dramatic drop in oil revenues . NBAD said its provisions against bad loans rose by nearly three quarters to 295 million dirhams. It said small and medium-size companies in particular were affected by the economic slowdown. Banks such as NBAD traditionally obtain low-cost deposits from their government owners and in return they can offer relatively cheap loans. But with oil prices down, fewer of these government deposits find their way back into domestic banking system. NBAD said overall deposits dropped to 233.3 billion dirhams, down 6.6% from last year. The bank's chief executive had said sometime earlier that the drop in oil prices was a positive for the Gulf as it would finally force governments across the region to reduce their oil dependence . Write to Nicolas Parasie at nicolas.parasie@wsj.com Related * Saudi Arabia Approves Economic Reform Program * Cheap Oil Shaved $390 Billion From Mideast Economies in 2015, IMF Says Credit: By Nicolas Parasie
Subject: Foreign investment; Financial performance; Banking; Economic conditions
Location: Abu Dhabi United Arab Emirates United Arab Emirates
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784453023
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784453023?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Cenovus Posts Loss as Oil-Price Slump Continues to Weigh; Pares capital-spending guidance, notes job cuts have largely been complete for the year
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
CALGARY, Alberta--Cenovus Energy Inc. on Wednesday reported a net loss as plunging crude-oil prices in the first quarter pushed its oil-sands operations below break-even levels, shrinking its cash flow by 95%.
Full text: CALGARY, Alberta--Cenovus Energy Inc. on Wednesday reported a net loss as plunging crude-oil prices in the first quarter pushed its oil-sands operations below break-even levels, shrinking its cash flow by 95%. Like its oil-producing peers, Cenovus has been hard hit by the drop in oil prices and has been focused on cost-cutting efforts. Earlier this year, it slashed its dividend, cut its capital-spending budget and announced workforce reductions. "So far, 2016 has been a brutally challenging year for our industry," Brian Ferguson, Cenovus' chief executive, said on a conference call. The Calgary, Alberta-based company reported a net loss for the first quarter ended March 31 of C$118 million, or 14 Canadian cents a share, compared with a loss of C$668 million, or 86 Canadian cents, a year earlier. The slimmer loss stemmed largely from currency-related gains as the Canadian dollar weakened against the U.S. dollar over the 12-month period. Adjusted to exclude one-time items, Cenovus lost 51 Canadian cents a share compared with a loss of 11 Canadian cents a year earlier. The latest loss was much steeper than the 41-Canadian-cent-a-share loss analysts polled by Thomson Reuters expected. Cash flow slumped to C$26 million, hurt by a 61% decline in average crude oil sale prices on the year to C$10.13 per barrel. At those levels, production from both of Cenovus' two main oil-sands sites--Christina Lake and Foster Creek--lost money. Excluding financial hedges, it lost an average of C$6.10 per barrel after expenses such as operating costs, royalties and transportation fees. Cenovus pared its capital-spending guidance for the year to 1.2 billion Canadian dollars ($951 million), which is the low end of guidance provided in February and about 29% below spending in 2015. But it kept its annual oil-sands production forecast of 144,000 barrels a day to 157,000 barrels a day, which would be above its average output of 140,320 barrels a day in 2015. The company said a nearly 13% reduction in operating costs over the past year will allow it to stay on track with planned expansions of its oil-sands production, which extracts crude embedded in sand using injections of steam into horizontally drilled wells. "We have now brought on two of the seven new well pads planned for this year, which is the start of a measured ramp-up of volumes from Foster Creek," Drew Zieglgansberger, executive vice president in charge of oil sands, said on the conference call. He said Cenovus also will expand production at Christina Lake beginning in the third quarter. However, Mr. Ferguson, the company's chief executive, said Cenovus would await further government policy clarity on environmental and other regulations before considering new oil-sands projects beyond those currently under construction. Cenovus said it would maintain its current dividend even with Brent crude prices in the $40-a-barrel range through the end of 2017, due in part to cost-reductions -- including 31% fewer staff than at the end of 2014. Brent crude prices are currently around $46 a barrel. Judy McKinnon contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil sands; Net losses; Cash flow; Energy economics; Operating costs; Crude oil prices; Financial performance
Location: Calgary Alberta Canada
Company / organization: Name: Cenovus Energy Inc; NAICS: 211111; Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: En glish
Document type: News
ProQuest document ID: 1784468934
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784468934?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Baker Hughes Loss Widens Amid Oil Downturn; Results come ahead of Saturday's deadline for Halliburton to complete its pending $35 billion deal to acquire Baker Hughes
Author: Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
Earlier this month, the U.S. Justice Department filed an antitrust suit challenging the deal , which would combine the world's second- and third-largest oil-field services firms, behind only Schlumberger Ltd. Baker Hughes didn't comment on the pending deal in its news release Wednesday except to say it can't predict when, or if, the pending merger will be completed.
Full text: Baker Hughes Inc. said its loss widened in the latest quarter as revenue slumped amid a downturn the oil-field services company's chief executive said is exceeding "even the most pessimistic predictions." Shares fell 3.7% to $44.10 in recent premarket trading as the adjusted per-share loss was far wider than analysts had predicted and revenue missed expectations. Read More * Baker Hughes Has Appeal Even if Halliburton Deal Fails (April 22) * Halliburton, Baker Hughes in Talks to Sell $7 Billion of Assets to Carlyle Group (April 14) * Justice Department Files Lawsuit Challenging Halliburton-Baker Hughes Deal (April 6) The latest results come ahead of Saturday's deadline for Halliburton Co. to complete its pending $35 billion deal to acquire Baker Hughes. The pending deal has faced opposition from competition authorities world-wide. Earlier this month, the U.S. Justice Department filed an antitrust suit challenging the deal , which would combine the world's second- and third-largest oil-field services firms, behind only Schlumberger Ltd. Baker Hughes didn't comment on the pending deal in its news release Wednesday except to say it can't predict when, or if, the pending merger will be completed. Low commodities prices have resulted in oil company customers reducing their spending for drilling and other well work, which in turn has pressured oil-field services companies to reduce their costs . Both Halliburton and Baker Hughes have cut thousands of jobs amid the commodities downturn. Chief Executive Martin Craighead said in prepared remarks that during the latest quarter "the industry faced another precipitous decline in activity" as oil producers cut spending further. Mr. Craighead said slumping revenue in the latest quarter reflected a 41% decline in the global rig count, lower pricing across most markets and Baker Hughes' decision to continue to limit its exposure to the unprofitable onshore pumping business in North America. The company reported that revenue in its North America business fell 59% to $819 million in the latest quarter, reflecting a 58% rig count-decline from a year earlier and deteriorating pricing conditions. Mr. Craighead stated that while Baker Hughes has taken significant steps to manage costs it is "retaining costs in our operating profit margins in compliance with the merger agreement." He added that "the unique circumstances in which we are operating limit our ability to consider and action a broader range of measures required to align the company with the current and near-term market conditions." Mr. Craighead said the company expects the North America rig count to decline 30% in the second quarter from the first quarter, with the U.S. rig count beginning to stabilize in the second half of the year, but doesn't anticipate any "meaningful increase" in activity in 2016. Over all, Baker Hughes reported a loss of $981 million, or $2.22 a share, compared with a year-earlier loss of $589 million, or $1.35 a share, a year earlier. Excluding merger-related costs, restructuring-related charges and write-downs, the adjusted per-share loss was $1.58. Revenue decreased 42% to $2.67 billion. Analysts polled by Thomson Reuters expected per-share loss of 34 cents and revenue of $2.85 billion. On Friday, Halliburton postponed its first-quarter earnings conference call until May 3, but also disclosed some 6,000 job cuts during the three-month period ended March 31, more than the 5,000 job losses it estimated in February. Halliburton also said its first-quarter revenue fell 40% to $4.2 billion. Write to Tess Stynes at tess.stynes@wsj.com Credit: By Tess Stynes
Subject: Oil service industry; Earnings; Acquisitions & mergers
Location: North America
Company / organization: Name: Department of Justice; NAICS: 922130; Name: Carlyle Group; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784564236
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784564236?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Pacific Exploration Seeks Court Protection in Canada; Oil producer reached a deal with key creditors on a plan to slash its debts by about $5 billion
Author: Palank, Jacqueline
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
Read More * Colombian Oil Producer Pacific Falls From Grace (April 19) * Pacific Exploration to Negotiate Restructuring with Catalyst (April 14) * Pacific Exploration Postpones Board Meeting on Debt Restructuring (April 10) * Pacific Exploration & Production Shareholders Move to Block Buyout Bid (April 8) The Canadian court on Wednesday granted Pacific Exploration access to $500 million in financing to fund its restructuring, a company spokeswoman said.
Full text: Pacific Exploration & Production Corp. on Wednesday took steps to implement its global restructuring by seeking protection from creditors in Canada. The Canadian-Colombian oil producer said Wednesday it sought protection under Canada's Companies' Creditors Arrangement Act after reaching a deal with key creditors on a plan to slash its debts by about $5 billion and boost its liquidity amid the oil downturn. Read More * Colombian Oil Producer Pacific Falls From Grace (April 19) * Pacific Exploration to Negotiate Restructuring with Catalyst (April 14) * Pacific Exploration Postpones Board Meeting on Debt Restructuring (April 10) * Pacific Exploration & Production Shareholders Move to Block Buyout Bid (April 8) The Canadian court on Wednesday granted Pacific Exploration access to $500 million in financing to fund its restructuring, a company spokeswoman said. Pacific Exploration said it expects to launch insolvency proceedings in Colombia and to file for chapter 15 bankruptcy protection in a U.S. court "at a later date." Such proceedings would supplement the CCAA proceeding and would seek to extend the Ontario court's protections beyond Canada's borders. Last week, Pacific Exploration said it had reached a restructuring deal with a group of bank lenders and unsecured bondholders, as well as with Canadian investment firm Catalyst Capital Group Inc., on the parameters of a restructuring agreement. The terms of that deal, which requires broad creditor support and court approval, include the $500 million in bankruptcy financing from bondholders and Catalyst, in return for which they will get warrants to acquire 25% of the new common shares in the restructured company. The bondholders' portion of the financing package wouldn't be repaid at the end of the restructuring, Pacific Exploration said, but would be converted into five-year secured notes. Catalyst's portion of the financing would be converted or exchanged for another 16.8% of new common shares. Pacific Exploration expects that its creditors, including the lenders behind $1.2 billion in loans, the holders of $4.1 billion in senior unsecured bonds and other unsecured creditors, will share the remaining 58.2% of new common shares. Creditors may be able to choose to receive cash rather than equity. Existing shareholders, including significant shareholder O'Hara Administration Co., are expected to be wiped out as a result of the restructuring. Pacific Exploration said the restructuring not only aims to cut some $5 billion in debt off its books but will also save it $253 million in annual interest expenses. The company said it expects to continue normal operations during the restructuring, including making payments to suppliers, contractors and trade partners. Founded by Venezuelan oil and mining executives, Pacific Exploration racked up its multibillion-dollar debt load through an acquisition spree and ran into trouble when crude oil prices fell. Write to Jacqueline Palank at jacqueline.palank@wsj.com Credit: By Jacqueline Palank
Subject: Debt restructuring; Bankruptcy reorganization; Bankruptcy; Crude oil prices
Location: Canada
Company / organization: Name: Catalyst Capital Group Inc; NAICS: 523910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784596351
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784596351?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon Mobil Boosts Its Dividend Slightly; Increase is the smallest percentage rise in the 34 consecutive years company has boosted its quarterly payout
Author: Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
At the March analysts' meeting, Exxon Chairman and Chief Executive Rex W. Tillerson said the company's dividend payments "are made with a view to building sustainable, long-term shareholder value and providing reliable dividend growth."
Full text: Exxon Mobil Corp. raised its dividend by 2.7% on Wednesday, the smallest percentage increase in the 34 straight years the company has boosted its quarterly payout. The move comes a day after Standard & Poor's Ratings Services stripped the global oil giant of its pristine triple-A-credit rating. Exxon's dividend increase comes as many energy companies have been cutting dividends and reining in spending to improve their finances. On Wednesday, Exxon said it now has boosted the dividend for 34 consecutive years. The next-smallest increase, 3.8%, was in 1997, according to data from FactSet. Exxon Mobil boosted its dividend 5.8% a year ago. Wednesday's increase was also below the average 10% annual increase over the past 10 years that the company cited at its analysts' meeting in March. S&P had cited Exxon's "large dividend payments" among the reasons the credit-ratings company thinks Exxon's credit measures would be below the rating firm's expectations for a triple-A-rating through 2018. S&P also noted low commodities prices that have been impacting the industry. Exxon's board declared a quarterly dividend of 75 cents a share on Wednesday, an increase of 2 cents a share, to yield 3.4%. The dividend is payable to shareholders of record as of May 13. "Nothing has changed in terms of the company's financial philosophy or prudent management of its balance sheet," Exxon spokesman Scott Silvestri said on Tuesday following the ratings downgrade. At the March analysts' meeting, Exxon Chairman and Chief Executive Rex W. Tillerson said the company's dividend payments "are made with a view to building sustainable, long-term shareholder value and providing reliable dividend growth." Shares of the company closed Wednesday at $88.46, up 1%. Write to Tess Stynes at tess.stynes@wsj.com Credit: By Tess Stynes
Subject: Dividends; Financial performance; Ratings & rankings
People: Tillerson, Rex W
Company / organization: Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784613039
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784613039?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permissi on.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.N. Security Council Sanctions Vessel Carrying Crude From East Libya; Move comes after objections from the main state-oil company in Tripoli
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Apr 2016: n/a.
Abstract:
LONDON--The United Nations Security Council on Wednesday sanctioned the first oil tanker to load crude petroleum sold by the government ruling Libya's eastern half, after objections from the main state-oil company in Tripoli.
Full text: LONDON--The United Nations Security Council on Wednesday sanctioned the first oil tanker to load crude petroleum sold by the government ruling Libya's eastern half, after objections from the main state-oil company in Tripoli. The oil sale would have created a lucrative revenue stream for Libya's eastern factions at an awkward moment in the fragile peace process. Libya has fractured along sectarian and geographic lines since the 2011 ouster and death of dictator Moammar Gadhafi, with the country splitting between two governments in the east and west that have sometimes been in violent conflict. A U.N.-backed unity government has taken power in the western capital of Tripoli, though the eastern government doesn't recognize it. The designation of the vessel, called the Distya Ameya, imposes current U.N. sanctions against selling Libyan oil outside legal channels directly onto a vessel that bought crude oil from the eastern government, according to a statement posted on the Security Council's website. The U.N. imposed an array of sanctions on Libya to stop the flows of arms and finance to Gadhafi during a civil war and kept restrictions in place during an uncertain transition after his death and the emergence of a new conflict. By Libyan law, all crude oil and petroleum products must be sold via the internationally recognized National Oil Co., which has been deemed independent of the various militias that rule the North African nation but is based in Tripoli. Complicating matters is that the eastern government once had international recognition from the U.N. and created its own state oil company. It has tried several times to export crude, but until now it had trouble finding shippers and buyers amid fears of legal action by the traditional National Oil Co. The first shipment to leave Libya--650,000 barrels of crude on Monday--was loaded at the Marsa al-Hariga port near the Egyptian border and is now offshore Malta, said a spokesman for the east's oil company Tuesday. The spokesman previously has said the cargo is owned by DSA Consultancy of Sharjah in the United Arab Emirates, which couldn't be reached. The company managing didn't respond to a phone call Wednesday. Libya's oil exports amount to about 300,000 barrels a day and represent the country's main source of revenue. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Sanctions; Crude oil
Location: Libya
People: Qaddafi, Muammar El
Company / organization: Name: United Nations Security Council; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 27, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784617195
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784617195?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Suncor Buys Out Murphy Oil Stake in Canada's Syncrude Oil Sands Consortium; The $744 million deal increases Suncor's stake to a controlling 53.74%
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Apr 2016: n/a.
Abstract:
The Calgary-based company's majority share of Syncrude dwarfs the 25% stake of Exxon Mobil Corp.'s Canadian unit, which is the operator of the consortium's mines.
Full text: CALGARY, Alberta--Suncor Energy Inc., Canada's largest crude-oil producer, said Wednesday that it bought an additional 5% stake in the Syncrude oil sands mining consortium from the local unit of Murphy Oil Corp., boosting its position as the largest owner. The 937 million Canadian dollar (US$744 million) deal for Murphy Oil's equity, worth the equivalent of 17,500 barrels of oil a day from Syncrude, is expected to close by midyear, Suncor said. It increases Suncor's stake in Syncrude to a controlling 53.74% and consolidates its role as the dominant player in the now five-member consortium. Syncrude operates two oil sands mines in northeastern Alberta province with a 350,000 barrel per day production capacity. One of the oldest and largest oil sands producers, it has been bedeviled by a series of operating problems in recent years. "This growth gives us even more leverage to oil prices as they recover," Suncor Chief Executive Steve Williams said in a statement, calling it a strategic fit after the acquisition earlier this year of another Syncrude owner, Canadian Oil Sands Ltd. Murphy Oil, which bought a stake in Syncrude in 1994, said the transaction allows it to focus on its offshore oil field and unconventional shale oil and natural gas businesses. "The sale of Syncrude will further place our focus in North America on our unconventional assets while simultaneously strengthening the financial flexibility of our balance sheet," Roger Jenkins, CEO of Murphy Oil, said in a separate statement. In March, Suncor completed its takeover of Canadian Oil Sands, raising its stake in Syncrude to 48.74% from 12% previously. The Calgary-based company's majority share of Syncrude dwarfs the 25% stake of Exxon Mobil Corp.'s Canadian unit, which is the operator of the consortium's mines. Other equity owners in Syncrude include two Chinese state-controlled energy majors: China Petroleum & Chemical Corp., also known as Sinopec, holder of a 9% stake; and the Canadian unit of Cnooc Ltd., owner of a 7% position. A subsidiary of Tokyo-based JX Nippon Oil & Energy Corp. owns the remaining 5% share. Murphy Oil's Canadian assets include nonoperating stakes in two Canadian Atlantic offshore oil projects and shale gas acreage in the Montney Formation of British Columbia. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil sands; Acquisitions & mergers; Mines; Consortia
Location: Canada United States--US
Company / organization: Name: China Petroleum & Chemical Corp; NAICS: 211111; Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: CNOOC Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 28, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784620619
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784620619?accountid =7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude Oil Prices Pare Gains, Dragged by Glut Worries; June Brent crude fell $0.26 to $46.92 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Apr 2016: n/a.
Abstract:
According to The Wall Street Journal Dollar index which compares the dollar to over a dozen of currencies, the dollar was last up nine cents or 0.1% at $86.42.
Full text: Oil prices surrendered earlier gains as concerns of a lingering glut weighed on sentiment, but analysts said volatility is expected in the short-term as traders waver between declining production and growing inventories. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $45.13 a barrel at 0208 GMT, down $0.20 in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell $0.26 to $46.92 a barrel. Oil prices reached a new 2016 high overnight in volatile trading after Federal Reserve officials left interest rates unchanged, signaling less concern about the health of the U.S. economy. Investors should take comfort from a relatively market neutral Federal Open Market Committee statement and the improvement in fundamental will likely encourage traders to beef up their already bullish positions in coming days, said ANZ Research. However, report of a bigger-than-expected growth in the U.S. crude inventories has spurred some risk-averse behavior. The latest data from the Energy Information Administration showed U.S. crude stocks expanded by 2 million barrels in the week ended April 22, much larger than the 1.1-million barrel decline estimated by the American Petroleum Group. At 538.6 million barrels, U.S. crude oil inventories are at historically high levels for this time of year, said the EIA. Moreover, while crude production edged lower in the same period, a 15,000-barrel a day fall was hardly encouraging. "Profit-taking is mainly responsible for prices decline this morning," said a Singapore-based marine fuel trader. Prices were also lower due to a strengthening greenback, the currency used in oil trading, analysts said. A stronger U.S. dollar means traders holding other currencies have less buying power. According to The Wall Street Journal Dollar index which compares the dollar to over a dozen of currencies, the dollar was last up nine cents or 0.1% at $86.42. Oil prices have staged a rally in recent months after sinking to a 13-year low in February, propped up by expectations of a rebalance in supply and demand in the second half of the year. "U.S. crude oil output is declining steadily; supply disruptions in Nigeria, northern Iraq, and Venezuela continue; and global crude runs should increase in May," analysts at Societe Generale said in a note. Some analysts, however, are of the view that a rise in oil prices could also encourage more producers to turn on their taps wider to protect and carve out a bigger market share. "Higher prices may bring hedging from oil producers and perhaps a slowing in the decline of production," said Rob Haworth, senior investment strategist at U.S. Bank. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--fell 37 points to $1.5771 a gallon, while May diesel traded at $1.3778, 17 points lower. ICE gas oil for May changed hands at $410.25 a metric ton, up $7.75 from Wednesday's settlement. Christian Berthelsen contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil; Supply & demand; Inventory; Crude oil prices
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Societe Generale; NAICS: 522110, 522120, 523110, 523120; Name: New York Mercantile Exchange; NAICS: 523210; Name: Federal Open Market Committee--FOMC; NAICS: 921130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 28, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784621071
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784621071?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Deal-Hungry Suncor Energy Posts First Quarter Net Profit, Operating Loss; Canada's top oil producer's cash flow suffered from a glut in crude oil and natural gas
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Apr 2016: n/a.
Abstract:
CALGARY, Alberta--Suncor Energy Inc., Canada's largest crude-oil producer, reported a first-quarter net profit on foreign exchange-related gains on Wednesday even as it posted an operating loss from sharply lower commodity prices.
Full text: CALGARY, Alberta--Suncor Energy Inc., Canada's largest crude-oil producer, reported a first-quarter net profit on foreign exchange-related gains on Wednesday even as it posted an operating loss from sharply lower commodity prices. Like most other major North American energy producers, Suncor's cash flow suffered from a glut in crude oil and natural gas. Still, the company has used its strong balance sheet and falling asset prices to grow through a series of acquisitions this year. More deals may be in the offing, according to the company's chief executive, Steve Williams. Suncor will "continue to look for opportunities to grow our business through acquisitions, by adding assets that fit strategically at competitive valuations," Mr. Williams said in a statement. Related * Suncor Buys Out Murphy Oil Stake in Canada's Syncrude Oil Sands Consortium The Calgary-based company's net profit was 257 million Canadian dollars ($204.17 million), or 17 Canadian cents a share, in the first three months of the year, compared to a net loss of C$341 million, or 24 Canadian cents a share, in the year-earlier period. It attributed that mostly to a C$855 million currency gain from the revaluation of U.S. dollar-denominated debt. On an operating, or adjusted, basis that excludes one-time items, Suncor reported an operating loss of C$500 million, or 33 Canadian cents a share, for the three months ended March 31. That was slightly higher than a consensus forecast of financial analysts compiled by the company that estimated a loss of 32 Canadian cents a share, according to RBC Dominion Securities. Cash flow from operations in the three months to March 31 fell to C$682 million, down from C$1.48 billion in the prior-year period. It blamed a 43% drop in the price of benchmark Western Canadian Select crude oil compared with the first quarter of 2015. That weaker pricing environment has whetted Suncor's appetite for deals. The company announced plans earlier Wednesday to buy out Murphy Oil Corp.'s stake in the Syncrude oil sands consortium , lifting its ownership to 53.74%. Suncor said it will pay C$937 million for Murphy Oil's 5% equity. It comes a month after it completed a takeover of Canadian Oil Sands Ltd. that boosted its share in Syncrude to 48.74% from 12% previously. Total production at Suncor rose to 691,400 barrels of oil equivalent per day in the first quarter, up from 602,400 barrels of oil equivalent a day in the year-earlier period. The gain stemmed largely from its increased stake in Syncrude and higher oil sands output. Oil sands production climbed to 453,000 barrels a day in the first three months of the year, up from 440,400 barrels per day in the same quarter of 2015. That prompted the company to revise its full-year production guidance upward to a range of 620,000 to 665,000 barrels of oil equivalent per day, from its previous 2016 forecast of 525,000 to 565,000 barrels of oil equivalent a day. Suncor kept its spending plans for the year unchanged at a range of C$6 billion to C$6.5 billion. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Offshore oil wells; Net losses; Financial performance; Oil sands; Corporate profits; Consortia
Location: Canada
Company / organization: Name: Canadian Oil Sands Ltd; NAICS: 211111; Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Murphy Oil Corp; NAICS: 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 28, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784632823
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784632823?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Woes Start to Hit Home --- Loan delinquency rates increase amid job losses in states reliant on the energy sector
Author: Andriotis, AnnaMaria
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Apr 2016: C.1.
Abstract:
J.P. Morgan Chase & Co. said auto-loan delinquency rates picked up in some energy-related markets. Auto-loan delinquency rates at Pinnacle Bank jumped to just over 1% of outstanding loan dollars in the fourth quarter of 2015 from 0.1% a year earlier, according to data provider S&P Global Market Intelligence.
Full text: The slump in crude prices is starting to show up as missed payments by consumers in areas where oil is a prime economic driver. In states from Oklahoma and Texas to North Dakota and Wyoming, rising unemployment in the energy sector is pushing up loan delinquencies and raising the risk of new losses for banks. Wells Fargo & Co. this month reported an increase inborrowers falling behind on payments in areas including Houston and parts of Alaska. J.P. Morgan Chase & Co. said auto-loan delinquency rates picked up in some energy-related markets. Overall, energy-dependent states are posting delinquency rates that in many cases exceed the national average, according to data prepared for The Wall Street Journal by credit bureau TransUnion. "In these energy states, we are clearly seeing the impact of the loss of oil jobs," said Ezra Becker, senior vice president and head of research at TransUnion. "We don't expect to see any kind of material improvement in the short term." Some 119,600 oil-and-gas jobs nationwide have been eliminated -- 22% of the total -- since September 2014, according to the Federal Reserve Bank of Dallas. The price of U.S.-traded oil, while on the rise this year, has dropped 26% since June. Some analysts have warned that persistent crude oversupply could prevent further price gains. Car loans and credit cards have been affected the most, and there are some early signs of delinquency-rate increases in borrowers who can't make mortgage payments. Moody's Investors Service said the share of borrowers in oil-focused areas falling 30 days behind on a pool of Freddie Mac mortgages, while low at 0.38% in December, began to exceed the average elsewhere in the country last summer. The average for other areas was 0.29% in December. A Freddie Mac spokesman said the company doesn't publicly report 30-day delinquencies, but said its national delinquency rate for mortgages that are 90 days or more past due has been on a steady downward trend. Declining oil prices overall have been a boon to consumers -- and their lenders -- in most other parts of the country. But the uptick in late payments is a blemish on what has been a strong run for consumer credit, adding another measure of pain for banks already struggling with souring loans to oil-and-gas drillers. Some of the hardest hit states -- Wyoming, Oklahoma and North Dakota -- have had unemployment rates rise in March from a year earlier, while the national average has declined, according to the Bureau of Labor Statistics. While delinquency rates overall remain low, the regional trend risks hurting profitsat smaller banks, potentially leading to tighter standards for loans, including mortgages and home-equity lines of credit. "Do I expect delinquencies to be on the rise? Absolutely," said Doug Weedin, president of Pinnacle Bank-Wyoming, a community bank with about $710 million in assets, based in Cody. Auto-loan delinquency rates at Pinnacle Bank jumped to just over 1% of outstanding loan dollars in the fourth quarter of 2015 from 0.1% a year earlier, according to data provider S&P Global Market Intelligence. Delinquencies could rise given the large number of layoffs in Pinnacle's region over the past two months that Mr. Weedin said aren't reflected in the latest data. Wyoming's oil, gas and mining industries account for roughly 70% of the state's revenue, according to the governor's office. There were an estimated 10,200 workers employed in oil and gas extraction and support jobs as of March, down 25% from a year ago, according to the state's Department of Workforce Services. On Wednesday, crude for June delivery gained $1.29, or 2.9%, to $45.33 a barrel on the New York Mercantile Exchange, its highest settlement price since November. The concerns about loan performance in energy markets is a turnaround for regions that were considered to be among the safest for consumer lending. Borrowers in many of these areas weathered the recession relatively well. Yet as oil prices remain at low levels and companies lay off employees, more oil workers are finding themselves out of a job and unable to pay bills. Mary Dominguez, 53 years old, lost her job in December as anadministrative assistant in Odessa, Texas, at a company that provides maintenance and other services to oil companies. She has since fallen behind on her car-loan payments and is avoiding calls from her lender. Instead of paying her credit-card bills in full each month, she is paying only the minimum and is carrying a balance of about $3,500, she said. "Every morning I wake up and think, 'I hope my car is there,' " she said. In Oklahoma and Texas, 1.7% and 1.8% of credit-card users, respectively, were at least 90 days behind on payments in the first quarter, an increase of about 0.22 percentage point from a year earlier, according to TransUnion. Credit-card delinquency rates in both states have been rising at about twice the rate of the U.S. as a whole, TransUnion said. In North Dakota -- where delinquencies have been among the lowest nationwide -- missed payments on car loans are rising even faster than in Texas and Oklahoma, according to TransUnion. Credit: By AnnaMaria Andriotis
Subject: Delinquency; Economic impact; Lines of credit; Crude oil prices; Energy industry
Location: United States--US
Company / organization: Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 28, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784688980
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784688980?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Analysts Just Aren't Buying the Oil Rally; Questions remain about current high oil stockpiles and the potential for increased supply
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Apr 2016: n/a.
Abstract:
According to Citigroup, global crude inventories have risen to records, with 370 million barrels of crude entering storage since January 2014. Continued weakness in oil prices will bring further pain for oil-producing countries and energy stocks.
Full text: Even as oil rallies, analysts have barely nudged up their price forecasts as they worry that crude's recent gains might not be sustainable. The price of oil has jumped 76% from the decade-low it hit earlier this year. That is mainly on hopes that dwindling U.S. oil production will help take crude out of an oversupplied market. But many analysts aren't buying the rally. They question whether the glut is indeed on the wane given current stockpiles and the potential for increased supply from Iran and elsewhere. They point out that last year, the oil price also rallied in the spring on a belief supply was falling, only to collapse in the year's second half. A survey of 13 investment banks by The Wall Street Journal sees Brent crude, the international oil-price benchmark, averaging $41 a barrel this year, up $1 from the same survey conducted in March. The banks see West Texas Intermediate, the U.S. oil gauge, averaging $39 a barrel this year, broadly unchanged from the prior survey. Oil settled higher Thursday for the third consecutive session. Front-month Brent crude for June delivery rose 96 cents, or 2%, to $48.14 a barrel. U.S. futures rose 70 cents, or 1.5%, to $46.03. "We are already seeing signs that the market will balance eventually, probably at the turn of the year," said Gareth Lewis-Davies, senior commodity strategist at BNP Paribas. "But until then, we still have a big oversupply to worry about." Despite the talk of falling supply, analysts point to increases in oil stockpiles around the globe that threaten the rebound. According to Citigroup, global crude inventories have risen to records, with 370 million barrels of crude entering storage since January 2014. Other factors that have supported prices in recent weeks, such as production outages from Nigeria to Venezuela and a weaker dollar, also might prove temporary, analysts say. Continued weakness in oil prices will bring further pain for oil-producing countries and energy stocks. Cheap crude, however, is welcome news for consumers and businesses around the globe. U.S. data in recent months has showed robust demand for oil products, such as gasoline, as drivers chalk up more miles on the road. Chinese data also indicate firm demand, a relief for the oil industry given forecasts of a slowdown in the world's second-largest oil consumer. That uptick in demand, though, might not be enough to support the oil price. Some analysts believe the current rally could mimic last year's. Then, Brent jumped about $20 a barrel between January and May before stumbling later in the year. Banks surveyed now forecast Brent averaging $39.25 a barrel in the current quarter and rising to $42.30 in the third quarter. Some of the banks, including Morgan Stanley and ING, see prices falling in the third quarter. "I'm very concerned that this rally might also run out of steam soon," said Eugen Weinberg, head of commodities research at Commerzbank. The bank sees Brent averaging $45 a barrel in the third quarter. "Everybody's focusing on the falling U.S. production, but there's a lot more crude coming from other places," he said. Earlier this month, major oil-producing nations failed to agree on a production freeze after Saudi Arabia appeared to walk away from any agreement that didn't include geopolitical rival Iran. That reminded analysts that there is more oil that could enter the market. Iran has vowed to keep pumping oil until it regains the market share it lost during years of international sanctions. Citigroup estimates that Iranian exports ran at about two million barrels a day in April. That is close to presanction levels of 2 million to 2.5 million barrels a day. The ramp-up in Iranian production, coupled with a seasonal production increase in Saudi Arabia, could offset the declines in U.S. production this year, Morgan Stanley said. "Doha's failure could set up a market-share war with many producers now calling for growth," Morgan Stanley said. Investors, though, seem unfazed. Bets by hedge funds and other money managers that the oil price will rise jumped to record levels in recent weeks. Net long positions in Brent, or bets that it will gain, increased to 418 million barrels last week, according to exchange data. Investors also have made more bullish bets in WTI than at any time since May last year. That investor optimism carries its own risks. If sentiment changes and those funds start to unwind their bets, the price of oil could see a sudden lurch southward. "The extreme long speculative positions from many of these funds could prove problematic," Morgan Stanley said. Most banks, at least, see prices rising next year. Analysts surveyed by the Journal forecast an average Brent price of $57 a barrel in 2017. But underscoring how analysts have become more pessimistic through this year, the same banks were predicting last August that Brent would rise above $70 a barrel this year. Hitting that level has been postponed to 2018 by these analysts. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Petroleum production; Production increases; Price increases
Location: United States--US Iran
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: BNP Paribas; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 28, 2016
Section: Markets
Publisher: Dow Jo nes & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784691882
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784691882?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil's Rise Chugs On; Crude prices increase as many traders become more confident that oversupply will wane
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Apr 2016: n/a.
Abstract:
Oil rallied in a similar fashion last spring, only to crash harder starting in July, a pattern likely to repeat this year because oversupply is lingering at about one million barrels a day, said Bart Melek, head of commodity strategy at TD Securities in Toronto.
Full text: Oil's rally chugged ahead on Thursday, with the U.S. benchmark closing above $46 a barrel for the first time since November, again thwarting analysts who have repeatedly called for a retreat. Global supply remains strong and U.S. stockpiles are increasing, but many traders are convinced the oversupplied market is on its way to balancing, brokers said. Their hopes are buoyed by steadily declining U.S. production and intermittent supply disruptions around the globe. And they got an extra boost Thursday from currency markets that lifted several commodity prices. The dollar fell broadly against other currencies, after data showing the U.S. economy expanded at its slowest rate in two years during the first quarter. A weaker dollar often leads to higher commodity prices by making them less expensive for traders using other currencies. In addition to oil, gold, copper, aluminum and several other metals bought and sold in dollars all rose. Related * Analysts Just Aren't Buying the Oil Rally Light, sweet crude for June delivery rose 70 cents, or 1.5%, to $46.03 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained 96 cents, or 2%, to $48.14 on ICE Futures Europe. Both rose for the sixth time in eight sessions, hitting their highest settlements since Nov. 4. The rally in Nymex crude has sent oil up 76% from a nearly 13-year low hit on Feb. 11. Investors are betting that was a bottom and bigger gains may follow. Their idea is that large spending cuts and a slowdown in drilling could rapidly turn the market from one in a surplus to one that is balanced, or even in a shortage. For traders, it has become "not a matter of if it will, it's a matter of when," said Peter Donovan, broker for Liquidity Energy in New York. "They're getting more confident the U.S. [production] number is going to continue to shrink." Data released by the U.S. Energy Department on Wednesday showed a decline in crude production in the U.S. for the seventh consecutive week, reducing output by 300,000 barrels since the beginning of the year. Demand will outstrip supply in the second half of the year, said Jason Gammel of Jefferies. Analysts have refused to budge their price forecasts higher despite the rally, citing stockpiles that haven't fallen and the potential for increased supply from Iran and elsewhere. Rallies like this have become common across the commodities sector as new money has flooded in. Commodity hedge funds added $4.1 billion in the first quarter, their best quarter in more than six years, eVestment said Monday. That trend is still supporting oil prices now, giving the rally a sense of invincibility and punishing anyone who has bet oversupply will drag prices back, Scott Shelton, broker at ICAP PLC wrote in a note. "Bottom line: get out of the way," he wrote. "The inmates are running the asylum." Oil rallied in a similar fashion last spring, only to crash harder starting in July, a pattern likely to repeat this year because oversupply is lingering at about one million barrels a day, said Bart Melek, head of commodity strategy at TD Securities in Toronto. A survey of 13 investment banks by The Wall Street Journal sees Brent crude averaging $41 a barrel this year, up a dollar from the same survey conducted in March. The banks see West Texas Intermediate, the U.S. oil gauge, averaging $39 a barrel this year, broadly unchanged from the previous survey. Gasoline futures settled up 1.72 cents, or 1.1%, at $1.5980 a gallon, the highest settlement since August 2015. Diesel futures rose 2.51 cents, or 1.8%, to $1.4046 a gallon, the highest since November. Georgi Kantchev, Ira Iosebashvili and Miriam Malek contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Supply & demand; Commodities; Prices; Futures
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 28, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784692010
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784692010?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
ConocoPhillips Further Reduces Spending Plans, Swings to Big Loss; Company tries to improve cash flow and balance sheet owing to weak outlook for oil
Author: Stynes, Tess; Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Apr 2016: n/a.
Abstract:
ConocoPhillips further reduced its capital spending plans for 2016 and reported a $1.47 billion first-quarter loss on Thursday as low commodities prices continue to take a toll on the energy sector.
Full text: ConocoPhillips further reduced its capital spending plans for 2016 and reported a $1.47 billion first-quarter loss on Thursday as low commodities prices continue to take a toll on the energy sector. The Houston company cut its 2016 capital spending budget to $5.7 billion from February's lowered estimate of $6.4 billion. Executives attributed the reduction mainly to the company's ongoing exit from deep water exploration, and a decision not to drill a pair of planned exploration wells in the Gulf of Mexico. ConocoPhillips has continued its efforts to reduce spending to improve its cash flow and its balance sheet owing to a weak outlook for oil prices and expectations that credit would tighten across the industry. The company has slashed its quarterly dividend and last year completed roughly $2 billion in noncore asset sales, part of its efforts to improve its performance. Related Coverage * ConocoPhillips Names New Financial Chief (Feb. 18) * ConocoPhillips Slashes Dividend, Cuts 2016 Spending Plans (Feb. 4) * ConocoPhillips to Cut Capital Spending by 25% in 2016 (Dec. 10, 2015) On Thursday, Chief Executive Ryan Lance said reducing the company's debt to less than $25 billion would be a top priority, as would paying a dividend to shareholders. "We won't grow for growth's sake," he said, adding that ConocoPhillips could maintain flat production and pay a dividend with cash from operations if the price of oil remained at a steady $45 a barrel. "The way to win in a cyclical business is to have a low cost of supply portfolio and to be the most resilient when prices are low and the most disciplined when prices are high," he said. ConocoPhillips didn't lay out a specific price at which it might begin to add rigs or increase production. "There is no set spot price that we are trying to watch as a trigger to start adding back activity," said Al Hirshberg, executive vice president of production, drilling and projects. "As prices do come back our first priority is going to be to strengthen the balance sheet, reduce our debt." Scott Hanold, an analyst at RBC Capital Markets, predicted the company's budget reduction. "We think COP is seeing better cost progress," he said Wednesday. ConocoPhillips reported a loss of $1.47 billion, or $1.18 a share, compared with a year-earlier profit of $272 million, or 22 cents a share. Excluding one-time items, the loss was 95 cents, compared with a year-earlier loss of 18 cents. Total revenue and other income slumped 37% to $5.02 billion. Analysts polled by Thomson Reuters expected per-share loss of $1.05 and revenue of $7.22 billion. ConocoPhillips said average selling prices fell 38% from a year earlier and production fell 2%. Write to Tess Stynes at tess.stynes@wsj.com and Erin Ailworth at Erin.Ailworth@wsj.com Credit: By Tess Stynes and Erin Ailworth
Subject: Financial performance; Balance sheets; Prices; Losses
Location: Gulf of Mexico
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Thomson Reuters; NAICS: 511110, 511140; Name: RBC Capital Markets; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 28, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784714645
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784714645?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Exxon Mobil Still Has Fuel in the Tank; Despite losing its coveted triple-A rating, there is still a lot to like about oil-and-gas giant Exxon Mobil ahead of Friday's earnings report
Author: Russolillo, Steven
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Apr 2016: n/a.
Abstract:
If crude oil's steep selloff has taught anything, it is that no energy company is immune from it--not even industry stalwart Exxon Mobil Corp. The energy giant lost a badge of honor on Tuesday when it was stripped of its coveted triple-A credit rating .
Full text: If crude oil's steep selloff has taught anything, it is that no energy company is immune from it--not even industry stalwart Exxon Mobil Corp. The energy giant lost a badge of honor on Tuesday when it was stripped of its coveted triple-A credit rating . Standard & Poor's cited concerns about Exxon increasing its borrowing to keep up with its capital-return program. But Exxon marches to the beat of its own drummer, announcing a day later that it would boost its quarterly dividend by 3%. Typically a footnote, the timing of the announcement was poignant. For one, it maintains Exxon's status in the S&P 500 dividend aristocrats --the select companies that have raised dividends every year for the past 25 years. And in an environment where energy companies are battening down the hatches, a boosted dividend holds that much more cachet. Exxon's first-quarter results, due Friday, should show its confidence doesn't stem from a financial turnaround just yet. Analysts polled by FactSet expect net income of $1.29 billion, down 74% from a year earlier. Exxon hasn't logged a quarterly profit below $2 billion since 1999, right before its merger with Mobil was completed. That has forced a lot of belt-tightening, but not as much as one might expect. Exxon plans to cut capital expenditures by 25% this year and put buybacks on hold. That is a sharp shift in strategy considering it spent more on buybacks than dividends from 2004 through 2014. Just this century it has reduced its share count by around 40%. But it has cut investment less sharply than it could have, a hallmark of Exxon's consistency across good and bad cycles . The brutality of the current market has prompted Exxon's debt to more than triple since 2012--a factor spurring the downgrade. Of course AA+ is nothing to sneeze at, particularly if oil prices have actually bottomed. The first quarter could mark Exxon's earnings trough. Investors seem to approve of the way Exxon has handled the washout. Exxon has outperformed all of its integrated peers handsomely over the past year, including Chevron Corp., which also reports on Friday. This tiger still has more room to run. Write to Steven Russolillo at steven.russolillo@wsj.com Credit: By Steven Russolillo
Subject: Financial performance; Capital expenditures; Energy industry
Company / organization: Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450; Name: Chevron Corp; NAICS: 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 28, 2016
column: Ahead of the Tape
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1784874041
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1784874041?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
African Farmers Get No Breaks at Gas Pump, Despite Plunge in Oil Prices; While importers benefit, inadequate regulation keeps consumers from reaping gains
Author: Bariyo, Nicholas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Apr 2016: n/a.
Abstract:
Early this month, Angola said it would turn to the International Monetary Fund for a bailout, joining a growing list of commodity-dependent African economies seeking assistance to weather the adverse economic climate .
Full text: GAYAZA, Uganda--Falling oil prices aren't trickling down as cheaper gasoline for African farmers, further straining a region roiled by the commodity crash and a record drought. With almost half of the costs of her fruit-selling business spent on transportation, Harriet Namakula was hoping cheaper oil would provide a bump to her bottom line. But the 40-year-old farmer says the $4 daily fare she pays to take her 250-pound sacks of fresh mangoes to market hasn't dropped despite the global crude rout, offering no relief from narrow margins and the rising cost of farming equipment and supplies. "If I miss the first truck, I may be charged even more," Ms. Namakula said as she strolled through a lush green mango grove, pushing sagging fruits from her way. "We hear oil prices are dropping, but for us in Uganda, nothing has changed." Bony Mbarebaki, a truck driver in Kampala, said truckers have been squeezed too. "We have been forced to increase fares. It is not good for our clients, but there is no alternative," said Mr. Mbarebaki, 42. A plunge in oil prices, which touched a 13-year low in February, is wreaking havoc on the finances of large African oil producers like Nigeria and Angola. Early this month, Angola said it would turn to the International Monetary Fund for a bailout, joining a growing list of commodity-dependent African economies seeking assistance to weather the adverse economic climate . Inadequate regulation in most countries allows importers to quickly increase pump prices as global prices rise, but they aren't eager to slash them as prices fall. This slows the pace at which low prices trickle down to consumers, experts said. Lower prices have mainly benefited importers and distributors in the form of low operational costs. Reduced import bills have also allowed some countries such as Ivory Coast and Ghana to put off raising interest rates to boost growth. But economists hoped the rout would also yield extra cash for companies and consumers in fuel-importing countries like Uganda and Kenya. That isn't happening. In South Africa and Malawi, currencies have dropped even further than the dollar-denominated oil price, erasing any savings. In Zambia and Sudan, governments have cut fuel subsidies that weighed on their budgets, keeping pump prices flat for many consumers. "With weakening currencies largely offsetting the positive impact of weaker oil prices, consumers can expect little to no relief in pump prices," said Irmgard Erasmus, an economist at NKC Africa Economics. "In countries where living standards are already stretched by high food prices, this means more pressure on consumers." In Uganda, Malawi and Tanzania, gasoline and diesel prices have dropped by less than 5% over the past year. In Zambia, Zimbabwe and the Democratic Republic of Congo, they have actually risen by about 15% thanks to falling currencies. Those increases are particularly damaging to farmers who anticipate lower yields amid the worst drought in decades. Officials will have to supplement their failed corn and wheat crops with pricey imports, threatening to push up inflation that has spiked to double-digit annual rates in Zambia and Malawi. Peter Phiri hoped the oil price drop would cut the $900 he spends each month on gasoline to plow, tend and harvest his 100-acre wheat farm in Zambia. Instead, he is paying more to farm less, pushing him near financial ruin. During the two-month planting season through November, Mr. Phiri had to stop work for a week because he ran out of money to buy diesel. "I could not adequately prepare my farm before the rains," Mr. Phiri said. "We aren't seeing any benefit from low oil prices." To keep afloat, Mr. Phiri and Ms. Namakula, the mango grower, have had to raise the price of their produce. Ms. Namakula, who also grows coffee on her 10-acre farm north of Kampala, has raised the price for two pounds of mangoes by 15%, to about 3,000 shillings, or around 85 cents. She said the higher prices have taken a toll on sales volume. Her coffee earnings, meanwhile, are down by a fifth amid lower prices for that commodity. "It's even more painful when you know you shouldn't be paying that much for fuel," Ms. Namakula said. Write to Nicholas Bariyo at nicholas.bariyo@wsj.com Credit: By Nicholas Bariyo
Subject: Farmers; Cost control; Drought; Price increases
Location: Angola Malawi Uganda Zambia
Company / organization: Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 28, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785013497
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785013497?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Slip on Profit-Taking; June Brent crude fell $0.27 to $47.87 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
Prices settled at 2016 highs overnight as traders looked past the larger-than-expected growth in U.S. crude inventories and placed their faith in declining U.S. production and intermittent output outages in some parts of the world.
Full text: Oil prices fell in early Asian trading Friday on profit taking, following a strong rally this week that was driven by expectations that the bloated market is slowly shrinking. Prices settled at 2016 highs overnight as traders looked past the larger-than-expected growth in U.S. crude inventories and placed their faith in declining U.S. production and intermittent output outages in some parts of the world. Data released by the U.S. Energy Department on Wednesday showed a drop in domestic crude production for the seventh consecutive week, reducing output by 300,000 barrels since the beginning of the year. A weaker U.S. dollar also boosted risk-taking sentiment in commodities. As oil is traded in dollars, a weaker U.S. dollar means more affordable prices for traders holding different currencies. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $45.82 a barrel at 0218 GMT, down $0.21 in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell $0.27 to $47.87 a barrel. Both WTI and Brent are likely to finish the month with gains of 16% and 19%, respectively. "This is a technical correction and people are looking to take profit at the end of the month. The fundamentals haven't changed much," said Gao Jian, a Shandong-based analyst at SCI International. The recent uptick in Nymex crude has sent oil up 76% from a nearly 13-year low hit in February. Investors are betting that was a bottom and larger gains may follow. Their idea is that large spending cuts and a slowdown in drilling could rapidly turn the market from one with a surplus to one that is balanced, or even one with a shortage. While a lull in production is good news for the industry, some market participants aren't optimistic that alone could sustain the rally. "It is worth keeping in mind that it is possible for U.S. oil production declines to slow without a recovery in the rig count due to the very large number of drilled uncompleted wells," analysts at Societe Generale said in a note. Drilled uncompleted wells are wells that could be completed and begin operation in a month, which means U.S. shale producers can quickly ramp up production and drench the market with extra barrels when prices improve. There could be as many as 3,500 to 4,000 of these wells, the bank said. "This would have the potential to slow the ongoing decline in U.S. oil production and push the WTI front-month price back down to about $40 where there would be little producer interest to put on price hedges," the bank added. Nymex reformulated gasoline blendstock for May--the benchmark gasoline contract--fell 116 points to $1.5864 a gallon, while May diesel traded at $1.4066, 20 points higher. ICE gasoil for May changed hands at $417.00 a metric ton, up $1.75 from Thursday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Profits; Petroleum production; American dollar; Price increases; Crude oil
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Societe Generale; NAICS: 522110, 522120, 523110, 523120; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785115176
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785115176?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Exxon Still Has Fuel in Its Tank
Author: Russolillo, Steven
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Apr 2016: C.1.
Abstract:
If crude oil's steep selloff has taught anything, it is that no energy company is immune from it -- not even industry stalwart Exxon Mobil Corp. The energy giant lost a badge of honor Tuesday when it was stripped of its triple-A credit rating.
Full text: If crude oil's steep selloff has taught anything, it is that no energy company is immune from it -- not even industry stalwart Exxon Mobil Corp. The energy giant lost a badge of honor Tuesday when it was stripped of its triple-A credit rating. Standard & Poor's cited concerns about Exxon lifting its borrowing to keep up with its capital-return program. But Exxon marches to the beat of its own drummer, announcing a day later that it would boost its quarterly dividend by 3%. Typically a footnote, the timing of the announcement was poignant. For one, it maintains Exxon's status in the S&P 500 dividend aristocrats: the select companies that have raised dividends every year for the past 25 years. And in an environment where energy companies are battening down the hatches, a boosted dividend holds that much more cachet. Exxon's first-quarter results, due Friday, should show its confidence doesn't stem from a financial turnaround just yet. Analysts polled by FactSet expect net income of $1.29 billion, down 74% from a year earlier. Exxon hasn't logged a quarterly profit below $2 billion since 1999, right before its merger with Mobil was completed. That has forced a lot of belt-tightening, but not as much as one might expect. Exxon plans to cut capital expenditures by 25% this year and put buybacks on hold. That is a sharp shift in strategy considering it spent more on buybacks than dividends from 2004 through 2014. Just this century it has reduced its share count by around 40%. But it has cut investment less sharply than it could have. The brutality of the current market has prompted Exxon's debt to more than triple since 2012 -- a factor spurring the downgrade. Of course double-A-plus is nothing to sneeze at, particularly if oil prices have actually bottomed. The first quarter could mark Exxon's earnings trough. Investors seem to approve of the way Exxon has handled the washout. Exxon has outperformed all of its integrated peers handsomely over the past year, including Chevron Corp., which also reports on Friday. This tiger still has more room to run.
Credit: By Steven Russolillo
Subject: Credit ratings; Petroleum industry
Location: United States--US
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 29, 2016
column: Ahead of the Tape
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785139339
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohib ited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: No Relief at Gas Pump for African Farms --- Despite global oil rout, some countries have seen fuel prices rise due to weak currency
Author: Bariyo, Nicholas
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Apr 2016: A.9.
Abstract:
Early this month, Angola said it would turn to the International Monetary Fund for a bailout, joining a growing list of commodity-dependent African economies seeking assistance to weather the adverse economic climate.
Full text: GAYAZA, Uganda -- Falling oil prices aren't trickling down as cheaper gasoline for African farmers, further straining a region roiled by the commodity crash and a record drought. With almost half of the costs of her fruit-selling business spent on transportation, Harriet Namakula was hoping cheaper oil would provide a bump to her bottom line. But the 40-year-old farmer says the $4 daily fare she pays to take her 250-pound sacks of fresh mangoes to market hasn't dropped despite the global crude rout, offering no relief from narrow margins and the rising cost of farming equipment and supplies. "If I miss the first truck, I may be charged even more," Ms. Namakula said as she strolled through a lush green mango grove, pushing sagging fruits from her way. "We hear oil prices are dropping, but for us in Uganda, nothing has changed." Bony Mbarebaki, a truck driver in Kampala, said truckers have been squeezed too. "We have been forced to increase fares. It is not good for our clients, but there is no alternative," said Mr. Mbarebaki, 42. A plunge in oil prices, which touched a 13-year low in February, is wreaking havoc on the finances of large African oil producers like Nigeria and Angola. Early this month, Angola said it would turn to the International Monetary Fund for a bailout, joining a growing list of commodity-dependent African economies seeking assistance to weather the adverse economic climate. Inadequate regulation in most countries allows importers to quickly increase pump prices as global prices rise, but they aren't eager to slash them as prices fall. This slows the pace at which low prices trickle down to consumers, experts said. Lower prices have mainly benefited importers and distributors in the form of low operational costs. Reduced import bills have also allowed some countries such as Ivory Coast and Ghana to put off raising interest rates to boost growth. But economists hoped the rout would also yield extra cash for companies and consumers in fuel-importing countries like Uganda and Kenya. That isn't happening. In South Africa and Malawi, currencies have dropped even further than the dollar-denominated oil price, erasing any savings. In Zambia and Sudan, governments have cut fuel subsidies that weighed on their budgets, keeping pump prices flat for many consumers. "With weakening currencies largely offsetting the positive impact of weaker oil prices, consumers can expect little to no relief in pump prices," said Irmgard Erasmus, an economist at NKC Africa Economics. "In countries where living standards are already stretched by high food prices, this means more pressure on consumers." In Uganda, Malawi and Tanzania, gasoline and diesel prices have dropped by less than 5% over the past year. In Zambia, Zimbabwe and the Democratic Republic of Congo, they have actually risen by about 15% thanks to falling currencies. Those increases are particularly damaging to farmers who anticipate lower yields amid the worst drought in decades. Officials will have to supplement their failed corn and wheat crops with pricey imports, threatening to push up inflation that has spiked to double-digit annual rates in Zambia and Malawi. Peter Phiri hoped the oil price drop would cut the $900 he spends each month on gasoline to plow, tend and harvest his 100-acre wheat farm in Zambia. Instead, he is paying more to farm less, pushing him near financial ruin. During the two-month planting season through November, Mr. Phiri had to stop work for a week because he ran out of money to buy diesel. "I could not adequately prepare my farm before the rains," Mr. Phiri said. "We aren't seeing any benefit from low oil prices." To keep afloat, Mr. Phiri and Ms. Namakula, the mango grower, have had to raise the price of their produce. Ms. Namakula, who also grows coffee on her 10-acre farm north of Kampala, has raised the price for two pounds of mangoes by 15%, to about 3,000 shillings, or around 85 cents. She said the higher prices have taken a toll on sales volume. Her coffee earnings, meanwhile, are down by a fifth amid lower prices for that commodity. "It's even more painful when you know you shouldn't be paying that much for fuel," Ms. Namakula said. Credit: By Nicholas Bariyo
Subject: Cost control; Crude oil; Farmers; Drought; Gasoline prices
Location: Africa
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.9
Publication year: 2016
Publication date: Apr 29, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785139608
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785139608?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Analysts Just Aren't Buying the Oil Rally
Author: Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Apr 2016: C.4.
Abstract:
According to Citigroup, global crude inventories have risen to records, with 370 million barrels entering storage since January 2014.
Full text: Even as oil rallies, analysts have barely nudged up their price forecasts as they worry that crude's recent gains might not be sustainable. The price of oil has jumped 76% from the decade-low it hit earlier this year. That is mainly on hopes that dwindling U.S. oil production will help take crude out of an oversupplied market. But many analysts aren't buying the rally. They question whether the glut is indeed on the wane given current stockpiles and the potential for increased supply from Iran and elsewhere. They point out that last year, the oil price also rallied in the spring on a belief supply was falling, only to collapse in the year's second half. A survey of 13 investment banks by The Wall Street Journal sees Brent crude, the international benchmark, averaging $41 a barrel this year, up $1 from March. The banks see West Texas Intermediate, the U.S. gauge, averaging $39 a barrel this year, broadly unchanged. Oil settled higher Thursday for the third consecutive session. Front-month Brent crude for June delivery rose 96 cents, or 2%, to $48.14 a barrel. U.S. futures rose 70 cents, or 1.5%, to $46.03. "We are already seeing signs that the market will balance eventually, probably at the turn of the year," said Gareth Lewis-Davies, senior commodity strategist at BNP Paribas. "Butuntil then, we still have a big oversupply to worry about." Despite the talk of falling supply, analysts point to increases in oil stockpiles that threaten the rebound. According to Citigroup, global crude inventories have risen to records, with 370 million barrels entering storage since January 2014. Other factors that have supported prices in recent weeks, such as production outages from Nigeria to Venezuela and a weaker dollar, also might prove temporary, analysts say. Continued weakness in oil prices will bring further pain for oil-producing countries and energy stocks. Cheap crude, however, is welcome news for consumers and businesses around the globe. U.S. data in recent months has showed robust demand for oil products, such as gasoline, as drivers chalk up more miles on the road. Chinese data also indicate firm demand, a relief for the oil industry given forecasts of a slowdown in the world's second-largest oil consumer. That uptick in demand, though, might not be enough to support the oil price. Some analysts believe the current rally could mimic last year's. Then, Brent jumped about $20 a barrel between January and May before stumbling later in the year. Banks surveyed now forecast Brent averaging $39.25 a barrel in the current quarter and rising to $42.30 in the third quarter. Some of the banks, including Morgan Stanley and ING, see prices falling in the third quarter. "I'm very concerned that this rally might also run out of steam soon," said Eugen Weinberg, head of commodities research at Commerzbank. The bank sees Brent averaging $45 a barrel in the third quarter. "Everybody's focusing on the falling U.S. production, but there's a lot more crude coming from other places," he said. Earlier this month, major oil-producing nations failed to agree on a production freeze. The ramp-up in Iranian production, coupled with a seasonal production increase in Saudi Arabia, could offset the declines in U.S. production this year, Morgan Stanley said. Most banks, at least, see prices rising next year. Analysts surveyed by the Journal forecast an average Brent price of $57 a barrel in 2017. Credit: By Georgi Kantchev
Subject: Commodity prices; Crude oil
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Apr 29, 2016
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785139753
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785139753?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
China's Oil Companies Produce Mixed Results Despite Government Aid; PetroChina posts its first-ever quarterly loss, while Sinopec's profit triples
Author: Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
BEIJING--China's efforts to support its state-controlled oil giants have so far yielded mixed results, showing how the global oil-price slump is reshaping the industry and how some companies will need more ambitious cost cuts to protect profits this year.
Full text: BEIJING--China's efforts to support its state-controlled oil giants have so far yielded mixed results, showing how the global oil-price slump is reshaping the industry and how some companies will need more ambitious cost cuts to protect profits this year. The country's largest producer by volume, PetroChina Co., swung to a first-quarter net loss of 13.8 billion yuan ($2.13 billion)--its first-ever quarterly loss--while rival China Petroleum & Chemical Corp. said profit tripled from a year earlier to 6.7 billion yuan. The results show the diverging fortunes of China's big oil companies after nearly two years of low prices and illustrate the lengths the government will go to protect beleaguered state-owned conglomerates that make up the backbone of economic growth. China Petroleum & Chemical, also known as Sinopec, is doing better due to its larger refining operations--such as manufacturing gasoline from crude oil--yielding high margins because of low crude prices and government policies that kept retail fuel prices artificially high. Related Coverage * Oil Falls Back Below $46 * Oil Patch Relieved by Price Rebound PetroChina's reliance on pumping oil from expensive and aging wells makes it more susceptible to the fall in global crude prices. Its loss underscored the depth of the challenges facing the company--including huge overhead costs for its workforce of more than 500,000--and raised concerns over whether it could protect its dividend payout this year. The company said its core exploration and production segment swung to a loss of 20.3 billion yuan in the first quarter from a 17.3 billion yuan profit a year earlier. A 14.7 billion yuan profit for its refining and chemicals division on the back of government subsidies wasn't enough to compensate. "Management is not taking radical enough steps to improve performance," said Hong Kong-based Bernstein Research analyst Neil Beveridge. "PetroChina needs to be more aggressive in shutting down loss making upstream assets and trimming expenses." How hard the government pushes PetroChina to improve its performance this year remains to be seen. On one hand, as the economy slows, job stability is an imperative for leaders in Beijing. That means big oil companies can't cut huge numbers of staff the same way much of the global industry has done. At the same time, the government will ultimately push the company to maintain its dividend payout, said Laban Yu, energy analyst at investment bank Jefferies. "We believe the central government will increasingly demand dividends from [state-owned enterprises] as it cuts taxes to stimulate growth," he said. PetroChina expects oil prices to remain low the rest of this year, but says its results will be helped in the second quarter by closing a multibillion yuan deal to divest stakes in some of its pipelines. Mr. Yu says further pipeline sales are needed this year. It hasn't been all bad news. Offshore oil explorer Cnooc Ltd.--the smallest of China's big three oil companies--reported its production rose 5% in the first quarter as new projects came online. The company doesn't report quarterly profit, but said it stemmed the effects of falling revenue through strict cost controls. Sinopec had the most success in taking advantage of the large spread between the price it pays for crude oil and the price at which it sells refined products. Under the government's fuel-pricing policy introduced in January, downward retail price adjustments for products such as gasoline and diesel are suspended when global crude prices fall below $40 a barrel. Beijing places limits on how additional refining profits can be spent, restricting them to investment in environmental upgrades, energy security and other politically important areas. Sinopec also made deeper cuts in production from high-cost fields than PetroChina. It said total crude production fell more than 10% in the quarter. Lower production at home would likely mean higher imports from overseas, and analysts described Sinopec's move as a positive both for the company and for global markets. "Not only will this help Sinopec stem losses, but it will also help rebalancing of global crude markets," said Mr. Beveridge. Write to Brian Spegele at brian.spegele@wsj.com Credit: By Brian Spegele
Subject: Net losses; Gasoline prices; Crude oil; Corporate profits; Investments; Crude oil prices
Location: China
Company / organization: Name: China Petroleum & Chemical Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785144658
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785144658?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
BASF Confirms Gloomy Outlook; CEO says low global oil prices would continue to squeeze profitability
Author: Alessi, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
The oil and gas unit posted an 85% plunge in EBIT before special items to [euro]66 million, due to lower global oil and gas prices and the company's divestiture of its gas trading and storage business through an asset swap with Russia's Gazprom last year.
Full text: MANNHEIM, Germany---The chief executive of the world's largest chemicals company, BASF SE, warned shareholders Friday that low global oil prices would continue to squeeze profitability at the German company during the current year. Addressing thousands of investors at BASF's annual general meeting, CEO Kurt Bock said the company is planning for an average annual oil price in 2016 of $40. "The business environment will thus remain challenging and we do not expect a rapid recovery in our markets," Mr. Bock said. Lower oil and gas prices have over the past year negatively affected BASF's basic chemicals unit, which produces petrochemicals, and its oil and gas division, wholly-owned subsidiary Wintershall Holding GmbH. But Mr. Bock said he expects the oil price to rise in coming years and that the "basic underlying conditions for our business, our markets and our competitive environment are in tact." He proposed an increased shareholder dividend of [euro]2.9 ($3.30) a share compared with [euro]2.8 a year earlier. Mr. Bock also urged the German government to set regulations that would allow the use of fracking technologies to extract natural gas, as in the U.S. Mr. Bock's remarks came as BASF reported first-quarter earnings and reiterated its gloomy outlook for the full year. For the period ended March 31, the company's closely watched earnings before interest and taxes before special items fell 8% to [euro]1.91 billion, weighed down by lower earnings at its oil and gas and basic chemicals businesses. But net profit was up 18% at [euro]1.4 billion, as a result of lower tax rates at its oil and gas division. Analysts at Germany's Baader Bank said BASF outperformed its sector and the market and called the quarter a "strong start" to 2016. But they warned that the group's weak cash flow could become increasingly damaging in coming years. Operating cash flow for the first quarter decreased by 56%, to [euro]1.05 billion, year-over-year. The oil and gas unit posted an 85% plunge in EBIT before special items to [euro]66 million, due to lower global oil and gas prices and the company's divestiture of its gas trading and storage business through an asset swap with Russia's Gazprom last year. EBIT before special items at the basic chemicals division fell 36% to [euro]465 million, a result of lower margins for petrochemicals and higher fixed costs from the start up of new plants. Group revenue fell 29% to [euro]14.21 billion, due in large part to the loss of the gas trading and storage business. Lower global oil prices also contributed to declining sales prices, particularly at the basic chemicals unit, the company said. All of BASF's business areas posted sales declines. But the specialty chemicals divisions saw earnings increase slightly, in part as a result of reduced fixed costs at its performance products unit and higher contributions from plastics and construction chemicals at its functional materials and solutions unit. BASF reiterated its guidance for the full year, saying it expects group sales to decline "considerably," while EBIT before special items should be "slightly below" the 2015 level of [euro]6.74 billion. Write to Christopher Alessi at christopher.alessi@wsj.com Credit: By Christopher Alessi
Subject: Chemical industry; Financial performance; Cash flow; Corporate profits; Prices; Natural gas
Location: Germany
Company / organization: Name: OAO Gazprom; NAICS: 211111, 221210; Name: BASF SE; NAICS: 551112, 325320, 325412, 325620, 325998
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785144808
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785144808?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Eni Loses Nearly $900 Million in First Quarter Amid Oil Price Rout; Italian oil company is increasing efforts to reduce operating cost
Author: Mesco, Manuela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
Analysts had expected operating profit to fall further to [euro]220 million, but stronger-than-expected performance in the company's natural gas and power division and resilience in other divisions helped lift earnings.
Full text: MILAN--Oil giant Eni SpA Friday reported a net loss of [euro]792 million ($897.8 million) for this year's first quarter, a decline from its net profit of [euro]832 million during the same period last year due to weak oil prices and a charge related to a subsidiary. But shares in Eni, Italy's largest company by market value, remained stable at [euro]14.35 in early trading since the company, like other European energy producers in recent days, reported results that weren't as dismal as some investors expected. Eni said that fundamentals in the oil market remain weak despite a recent rally in oil prices , presenting a gloomier picture than some peers have offered. "The global macroeconomic outlook for 2016 is clouded by a number of risks and uncertainties, mainly relating to a continued slowdown of growth in China, caution in the eurozone and in commodity-exporting countries," the company said in a statement. RELATED * Eni Plans More Than $14 Billion in Cost Cuts, Asset Sales (3/18/16) * What Oil Glut? Outages Put Supply, Demand Close to Balance (4/19/16) * Oil Firms Slow Exploration to Weather Low-Price Era (3/28/16) Oil prices face "possible negative pressure" from uncertainties over energy-demand growth in the short and medium term, the company said. Prices have rallied recently, soaring 76% off decade lows seen at the beginning of this year amid hopes that slowing U.S. oil production will help remove oversupply from the market. While a spate of production outages in countries such as Nigeria and Venezuela and a weaker dollar have strengthened the rally, analysts say rising oil stocks could halt the rise, and point to a price jump in the same period last year that fizzled out in the second half. In recent days, big European oil producers like BP PLC, Total SA and Statoil ASA produced better quarterly results than some investors forecast due to cost-cuts and support from their refining divisions. Total reported first-quarter profit of $1.64 billion on Wednesday as the company slashed costs, boosted production and benefited from resilient refining earnings. BP posted a surprise underlying replacement-cost profit--a measure equivalent to the net profit U.S. oil companies report--on Tuesday from stronger-than-expected refining and trading performance. Analysts had predicted BP would report a loss in its underlying replacement cost profit. Eldar Saetre, the CEO of Statoil, said the global oil market was rebalancing while BP CEO Bob Dudley said he expected crude oil prices to recover toward the end of the year. Eni's adjusted operating profit, which excludes its chemicals division Versalis--which it is in the process of selling--fell 69% to [euro]472 million in the first quarter. Analysts had expected operating profit to fall further to [euro]220 million, but stronger-than-expected performance in the company's natural gas and power division and resilience in other divisions helped lift earnings. The company's share price opened around 1% lower, but rose as the day progressed to trade mostly unchanged on the day. Eni reported a "messy set of results, and hard for the market to read, but we think headlines are OK at best," said Exane BNP Paribas analyst Aneek Haq. Eni said it would ramp up efforts to cut costs by rescheduling projects, being more selective about which exploration prospects it pursues and renegotiating contracts with suppliers. Eni's oil and gas production grew 3.4% in the quarter to 1.75 million barrels of oil equivalent a day, due to the startup of the Goliat oil field in the Barents Sea and three other projects. The company doesn't expect its production to grow this year compared with 2015. Write to Manuela Mesco at manuela.mesco@wsj.com Credit: By Manuela Mesco
Subject: Net losses; Financial performance; Corporate profits; Crude oil prices; Petroleum production
Location: United States--US Italy
People: Dudley, Bob
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Total SA; NAICS: 447190, 324110, 211111; Name: Statoil ASA; NAICS: 324110, 211111; Name: Eni SpA; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785162552
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785162552?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dow Falls 210.79; Yen and Oil Jump
Author: Josephs, Leslie
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Apr 2016: C.1.
Abstract:
The U.S. stock market had been relatively calm early in the session, appearing to shake off the Bank of Japan's decision and lackluster U.S. economic growth data.
Full text: The Dow Jones Industrial Average suffered its biggest drop since the blue-chip index hit a 2016 low in February. Investors snapped up assets considered havens, such as gold and U.S. government debt. The yen surged after the Bank of Japan left its monetary policy unchanged, disappointing many investors who had expected the central bank to launch fresh stimulus measures. Meanwhile, oil continued to rebound. The U.S. stock market had been relatively calm early in the session, appearing to shake off the Bank of Japan's decision and lackluster U.S. economic growth data. But the Dow stumbled late in the session, led by sharp declines in Apple, Cisco Systems and International Business Machines. The index fell 210.79 points, or 1.2%, to 17830.76. It was the Dow's biggest one-day drop since the index hit its 2016 low on Feb. 11. The index has risen 14% since that trough. "It's a reminder to investors that not everything's going to go right," said Kate Warne, investment strategist at brokerage Edward Jones. The yield on the 10-year Treasury note fell to 1.838% on Thursday, from 1.861% on Wednesday, as prices rose. Gold for May delivery added 1.3% to $1,265.50 an ounce. The tech-heavy Nasdaq Composite gave back earlier gains to drop 57.85 points, or 1.2%, to 4805.29. Apple shares extended their losses after investor Carl Icahn said in an interview with CNBC that he no longer has a stake in the iPhone maker. Earlier this week, Apple posted its first quarterly decline in revenue in 13 years. Its shares fell $2.99, or 3.1%, to $94.83 Thursday, bringing this year's declines to nearly 10%. Mr. Icahn's comments made investors more nervous given how poor Apple's results were, said Ms. Warne of Edward Jones. The S&P 500 fell 19.34 points, or 0.9%, to 2075.81, also led by declines in the technology sector. Technology shares have been hit hard in recent sessions as some high-profile companies reported disappointing quarterly results. Facebook bucked the trend when it reported late Wednesday that it nearly tripled its quarterly profit, but its 7.2% gain Thursday to close at a record 116.73 wasn't enough to lift the sector. Amazon.com rallied 12% in after-hours trading Thursday after the online retailer's quarterly profit exceeded analysts' expectations. U.S. crude-oil prices rose 1.5% to $46.03 a barrel, rising for a third consecutive session. Even with Thursday's stock-market declines, the Dow and S&P 500 are both within 3% of their record highs. However, some investors are concerned that tepid economic growth and declines in corporate profits could hamper gains. In the wake of the BOJ decision, Japan's Nikkei Stock Average fell 3.6% and the dollar declined 3% against the yen to 108.10 yen, the currency's biggest decline since May 2010. The yen has surged against the U.S. currency this year, adding to the pain for Japan's exporters. Japanese markets were closed for a holiday Friday. Hong Kong's Hang Seng Index was down 1.3%, with more moderate declines in Shanghai, Australia and South Korea. Hours after the BOJ's announcement, the Commerce Department reported the U.S. economy grew at a seasonally adjusted annualized 0.5% in the first quarter, the slowest rate in two years and below analysts' expectations.
Credit: By Leslie Josephs
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Apr 29, 2016
column: Thursday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785176485
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785176485?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Falls From Day's High, Back Below $46; Expectations Organization of the Petroleum Exporting Countries increased its output
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
Multiple forecasters had called for a month-on-month decline of between 60,000 and 90,000 barrels a day for onshore production, said Simmons & Co. International, a division of Piper Jaffray Cos. In addition, some analysts expect that the Organization of the Petroleum Exporting Countries has increased its output following a failed attempt to agree on a production freeze.
Full text: NEW YORK--Oil prices fell Friday as supply data raised concerns that the global glut of crude won't shrink as quickly as some traders expected. Oil prices have surged in recent weeks on a weaker U.S. dollar, production outages in some regions and continued falling output in the U.S. Benchmark U.S. oil prices rose 20% this month, and global benchmark Brent crude rose 22%. But the global crude market remains oversupplied, analysts say, and some expect prices to fall from current levels. "The burning question near-term is whether or not there is enough momentum to carry crude oil to $50/barrel," said fuel distributor TAC Energy in a note. "There is some doubt that this steady, somewhat tranquil climb higher can continue." U.S. oil production fell by 51,000 barrels a day, or 0.6%, in February to 9.1 million barrels a day, the Energy Information Administration said Friday. Multiple forecasters had called for a month-on-month decline of between 60,000 and 90,000 barrels a day for onshore production, said Simmons & Co. International, a division of Piper Jaffray Cos. In addition, some analysts expect that the Organization of the Petroleum Exporting Countries has increased its output following a failed attempt to agree on a production freeze. OPEC members met with some non-OPEC producers earlier this month to discuss freezing production, but the talks ended without an agreement. Some market participants said the failure to reach a deal could prompt some large producers, including Saudi Arabia, to continue ramping up production in an attempt to hold on to market share. The International Energy Agency will report OPEC production levels for April next month. Higher OPEC production could offset declines in U.S. output. Light, sweet crude for June delivery settled down 11 cents, or 0.2%, to $45.92 a barrel on the New York Mercantile Exchange. Brent fell a penny to $48.13 a barrel on ICE Futures Europe. The front-month Brent contract expired at settlement Friday. The more actively traded June contract fell 40 cents, or 0.8%, to $47.37 a barrel. Both benchmarks settled at 2016 highs on Thursday. Bank of America Merrill Lynch estimated that global oil production in April or May is set to decline compared with last year for the first time since the beginning of 2013. The drop would come on the back of massive cuts in global exploration and production investments over the past year, the bank said. "The market is coming into better balance and we maintain the view that the current oversupply will flip into undersupply in [the second half of the year]," said Jefferies analyst Jason Gammel in a note. The recent price rally is helping investors look past companies' first-quarter earnings, which reflect a period when oil prices hit multiyear lows. Exxon Mobil Corp. reported its worst quarterly results since 1999 on Friday, while Chevron Corp. reported a second consecutive quarterly loss for the first time in at least two decades. A survey of 13 investment banks by The Wall Street Journal this week sees Brent averaging $39.25 a barrel in the current quarter, rising to $42.30 in the third quarter. Some of the banks, including Morgan Stanley and ING, see prices falling in the third quarter. Gasoline futures for May delivery recently fell 1.32 cents, or 0.8%, to $1.5848 a gallon. Prices rose 11% this month. The May contract expired at settlement Friday. The more actively traded June contract fell 0.63 cent, or 0.4%, to $1.6044 a gallon. May diesel futures fell 2.67 cents, or 1.9%, to $1.3779 a gallon, posting a 16% monthly gain. June diesel fell 2.17 cents, or 1.5%, to $1.3860 a gallon. Write to Nicole Friedman at nicole.friedman@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Nicole Friedman and Georgi Kantchev
Subject: Crude oil prices; Crude oil; Futures; Petroleum production
Location: United States--US
Company / organization: Name: Piper Jaffray Cos; NAICS: 523120; Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New Yo rk, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785187310
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785187310?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Thirteen Dead After Helicopter Crash in Norway; Chopper was traveling back from one of Statoil's offshore oil fields
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
The company has struggled under successive private equity owners to restructure a heavy debt load, and on April 15 missed an interest payment, triggering a 30-day grace period that could lead it to default on more debt if it doesn't make up the arrears. There is a significant rescue operation at the scene of the crash, including two Sea King search and rescue helicopters, navy vessels, divers, and fire crew, a rescue center official said.
Full text: OSLO--Eleven bodies have been found after a helicopter crashed off the west coast of Norway on its way back to the mainland from an offshore oil field, local police said Friday. The helicopter, operated by CHC Helicopter Service, was carrying 11 Norwegians, one Italian and one U.K. citizen, a police spokesman said. The search was called off in the late afternoon, and all 13 aboard have been presumed dead. "It sounded a bit like thunder," said Vegard Jostein Turoy, 24, who witnessed the accident from inside a nearby wooden cabin. "First, I heard a helicopter overhead but barely noticed it. Then I heard some strange noises and creaking sounds, and when I looked out the window I saw the helicopter coming down." The helicopter was traveling to Bergen Airport from Statoil ASA's Gullfaks B oil field, and crashed at a small island northwest of Norway's second city Bergen. Mr. Turoy estimated that he was about 1.5 kilometers (0.93 mile) away from the crash site, and said the rotor separated from the helicopter, an Airbus H225, and that the aircraft slammed into the ground. "When I saw it, I thought: there won't be much left. There was an explosion, and a fire that lasted for a long time," he said. The crash marks the first fatal helicopter accident in Norway's offshore sector since 1997, when another Airbus helicopter crashed on the way from the mainland to the Norne field and 12 people died. "Exact details of the incident are not yet known," CHC Helicopter said. "The company's Incident Management Team is being mobilized." British and Norwegian authorities have suspended commercial operations of Airbus EC 225 helicopters, according to Bristow Group Inc., an energy-sector helicopter provider working in the North Sea. Norwegian oil-service company Aker Solutions confirmed that three of its employees and a contractor were among the helicopter passengers. U.S. oil-service company Halliburton confirmed late Friday that four of its employees were on the helicopter that crashed. The company didn't disclose their nationalities. "Halliburton is saddened to confirm that it had four employees on board the helicopter that crashed off the coast of Norway early this morning," a spokesperson said. A spokesman for the U.K. Foreign Office confirmed that a U.K. citizen had died in the crash, and said the government had offered support to the family. The Airbus helicopter is one of the most commonly used models for the oil and gas sector. The model has had safety issues, though. The helicopter maker had to redesign the gearbox after issues were found following two ditchings in 2012, which also temporarily led to restrictions on flights over water. Flights using a similar Airbus helicopter model were briefly suspended in 2013 following a fatal crash off the coast of Scotland . The helicopter also was operated by CHC Helicopter. "Airbus Helicopters has been informed about an accident," Airbus said. "We are now assessing the situation and stand ready to fully support the authorities in their investigation." The crash comes at a difficult time for commercial helicopter makers. The prolonged slump in crude prices has led oil and gas companies to cut capital expenditures, weighing on demand for new helicopters . Parent CHC Group Ltd. is already in financial trouble and has warned in regulatory filings that it could be forced to seek bankruptcy protection. The company has struggled under successive private equity owners to restructure a heavy debt load, and on April 15 missed an interest payment, triggering a 30-day grace period that could lead it to default on more debt if it doesn't make up the arrears. Vancouver-based CHC is one of two global helicopter operators alongside Houston-based Bristow Group Inc. which have been forced by the energy downturn to cut costs and staff. CHC was delisted from the New York Stock Exchange in February, two years after an IPO that saw the company valued at its peak at more than $1.2 billion. The stock was recently down 6.5% at 70 cents, valuing it at $1.9 million. Bristow gained almost 4% in early trade. The Norwegian Civil Aviation Authority said it had temporarily grounded all similar helicopters on the Norwegian shelf in response to the accident. Statoil said it had set up an emergency organization to handle the situation. A phone line has been set up for the families of those on board the downed chopper, and a center for the next of kin has been set up at a local hotel. There is a significant rescue operation at the scene of the crash, including two Sea King search and rescue helicopters, navy vessels, divers, and fire crew, a rescue center official said. The Norwegian Accident Investigation Board said it was on its way to the crash site. The British Air Accidents Investigation Branch said it was sending a team of inspectors to assist its Norwegian counterpart in the probe. The Cologne, Germany-based European Aviation Safety Agency also said it would support the probe. National police said a team was on its way to help identify the deceased. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Oil fields; Aviation; Helicopters; Stock market delistings; Natural gas utilities
Location: Norway
Company / organization: Name: Bristow Group Inc; NAICS: 481211, 481212; Name: Statoil ASA; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785207396
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785207396?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Sanctioned Oil Tanker Returns to Libya After East's Failed Export Attempt; The tanker loaded 650,000 barrels of crude oil on Monday after purchasing it from an oil company run by Libya's eastern government
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
The U.N. imposed an array of sanctions on Libya to stop the flows of arms and finance to Gadhafi during a civil war and kept restrictions in place during an uncertain transition after his death and the emergence of a new conflict.
Full text: An oil tanker that was sanctioned by the United Nations after loading petroleum sold by Libya's eastern government has begun returning to the North African nation, a Libyan official said. The tanker loaded 650,000 barrels of crude oil on Monday after purchasing it from an oil company run by Libya's eastern government and set sail for Malta. Its progress was halted when the U.N. Security Council blacklisted the ship after Libya's official National Oil Co. complained. The oil sale would have created a lucrative revenue stream for Libya's eastern factions at an awkward moment in the country's fragile peace process. Libya has fractured along sectarian and geographic lines since the 2011 ouster and death of dictator Moammar Gadhafi, with the country splitting between two governments in the east and west that have sometimes been in violent conflict. A U.N.-backed unity government has taken power in the western capital of Tripoli, though the eastern government doesn't recognize it. By Libyan law, all crude oil and petroleum products must be sold via the internationally recognized National Oil Co., which has been deemed independent of the various militias that rule the North African nation but is based in Tripoli. The U.N. imposed an array of sanctions on Libya to stop the flows of arms and finance to Gadhafi during a civil war and kept restrictions in place during an uncertain transition after his death and the emergence of a new conflict. U.N. sanctions have also targeted people and companies that have tried to profit from illicit fuel and oil sales that threaten the peace process. The vessel, Distya Ameya, has been diverted back to Zawiya, a Libyan city with a major refinery, according to shipping tracking Website FleetMon and a Libyan oil official in Tripoli. It isn't known what the ship owner's new intentions are. An official with the eastern government's oil company didn't respond to a request for comment. The ship's owner couldn't be reached. Complicating matters is that the eastern government once had international recognition from the U.N. and created its own state oil company. It has tried several times to export crude, but until now it had trouble finding shippers and buyers amid fears of legal action by the traditional National Oil Co. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Sanctions; Crude oil
Location: Malta Libya
People: Qaddafi, Muammar El
Company / organization: Name: United Nations--UN; NAICS: 928120; Name: United Nations Security Council; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785207436
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785207436?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Dai's Take: Oil Price Slump Hits Public PE Firms' Financial Results
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
Quarterly earnings reports from publicly listed private-equity firms offer a window into how the slump in oil and natural gas prices has affected some firms' financial results.
Full text: Quarterly earnings reports from publicly listed private-equity firms offer a window into how the slump in oil and natural gas prices has affected some firms' financial results. So far, the commodity price downturn--now in its second year--has produced losses in energy holdings across equity and credit units at such firms as Blackstone Group, KKR & Co., Carlyle Group and Oaktree Capital Group. But many of these firms continue to play down the severity of the impact, contending that most of the losses are unrealized and can be reversed when commodity prices recover. Blackstone, for instance, reported negative net returns during the first quarter from both the distressed- and performing-credit businesses. Chief Financial Officer Michael Chae said the negative returns were largely a result of mark-to-market accounting, and that "substantially all of [them] are unrealized." KKR posted more than $100 million in unrealized losses from its energy portfolio, as well as losses in "a handful of positions" within its credit and specialty finance portfolios. Carlyle marked down the value of its natural resources funds, and that of its global market strategies, which consists of credit, hedge funds, midmarket finance, energy mezzanine and distressed debt funds. Oaktree, meanwhile, took a $23 million impairment charge on investments in certain collateralized loan obligations primarily stemming from energy holdings. However, a few firms, ever the optimists, continue to invest money into new energy deals, some of which have already begun to appreciate. Oaktree, for instance, bought distressed debt in companies in oil and gas exploration and production, energy midstream, metals and mining during the first few weeks of this year, when the credit markets got hammered by persistently low oil prices. Some of those investments appreciated by as much as 20 to 30 percentage points in March, when credit markets rebounded, said Bruce Karsh, co-chairman and chief investment officer of Oaktree. The firm took advantage of the market recovery to sell a few holdings and "recycle proceeds," said Mr. Karsh. Blackstone's president, Tony James, speaking on a conference call discussing the financial results, called the market turmoil during the first few weeks of this year a "technical backup" caused by a lack of liquidity. "Companies that need to access capital are increasingly dependent on investors like us," said Mr. James. Write to Shasha Dai at shasha.dai@wsj.com. Credit: By Shasha Dai
Subject: Financial performance; Natural gas prices; Collateralized loan obligations
People: James, Tony Karsh, Bruce Chae, Michael
Company / organization: Name: Kohlberg Kravis Roberts & Co LP; NAICS: 523920; Name: Carlyle Group; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785207518
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785207518?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon Mobil's Profit Plunges 63%; Despite sharp declines in revenue and earnings, oil company's results still top views
Author: Olson, Bradley; Steele, Anne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
Related Reading * Chevron Reports Wider-Than-Expected Loss * Exxon Mobil Still Has Fuel in the Tank * Oil Companies Begin to Benefit From Cost Cuts * Heard on the Street: Big Oil, Big Mistake Irving, Texas-based Exxon reported a profit of $1.81 billion, or 43 cents a share, down from $4.94 billion, or $1.17 a share, a year earlier.
Full text: Exxon Mobil Corp., the world's largest publicly traded oil company, saw its profit plunge 63% to the lowest level since 1999, a year when it nearly doubled in size by acquiring rival Mobil in an $80 billion deal. The sharp decline came amid a loss from its business producing oil and natural gas, one that largely came from flagging operations in U.S. shale basins. Profits from refining oil into products such as gasoline and diesel, an area that had helped the company weather the blow of lower prices in the past 18 months, also fell by almost half. Investors shrugged off the declines, reflecting optimism stemming from a recent rally in crude prices as the company beat analyst expectations. Shares of Exxon edged up 0.3% in premarket trading to $88.25 and are up more than 10% this year. "The market is already looking past these results since oil is up almost 80% from earlier lows," said Brian Youngberg, an energy analyst with Edward Jones. "The expectation was that earnings were going to be really bad for the entire sector, but many companies did better." Chevron Corp., the second-largest U.S. oil company after Exxon, reported a loss of $725 million , was wider than analysts expected. Shares initially fell 1.6% in premarket trading to $100.74 after the San Ramon, Calif.-based company reported its second-straight quarterly loss. Related Reading * Chevron Reports Wider-Than-Expected Loss * Exxon Mobil Still Has Fuel in the Tank * Oil Companies Begin to Benefit From Cost Cuts * Heard on the Street: Big Oil, Big Mistake Irving, Texas-based Exxon reported a profit of $1.81 billion, or 43 cents a share, down from $4.94 billion, or $1.17 a share, a year earlier. Analysts polled by Thomson Reuters expected a per-share profit of 31 cents. Revenue dropped 28% to $48.71 billion. Analysts had forecast revenue declining to $48.14 billion. Profit in the exploration and production, or upstream, business swung to a $76 million loss. In the U.S., the upstream division widened its loss to $832 million from $52 million a year earlier. Exxon also was hurt by declining profit in the downstream division, which had previously been a boon amid lower prices for oil and gas. In the latest quarter, refining and marketing earnings, or downstream, plunged 46% to $906 million. Exxon said weaker margins decreased earnings by $860 million while volume and mix effects increased earnings by $10 million. Exxon said it cut its capital spending by 33% from the prior year to $5.13 billion. Exxon has moved to conserve cash as oil and gas prices languish at their lowest levels in more than a decade. Oil companies around the world have been battered by a price crash that has left crude and natural gas stubbornly low. Producing countries such as Saudi Arabia and major international oil companies like Chevron have all continued to pump more fuel in the face of the crisis--a standoff that shows no signs of abating. Write to Bradley Olson at Bradley.Olson@wsj.com and Anne Steele at Anne.Steele@wsj.com Credit: By Bradley Olson and Anne Steele
Subject: Corporate profits; Prices; Losses; Natural gas; Financial performance
Location: United States--US
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Chevron Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785222745
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785222745?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Chevron to Cut More Jobs as It Reports Wider-Than-Expected Loss; Exploration and drilling business hit hard by plunge in oil price
Author: Steele, Anne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
[...]Friday, rival Exxon Mobil Corp., the largest U.S. oil company, said its first-quarter profit plunged 63% as oil prices remain depressed, but the decline was smaller than analysts had predicted.
Full text: Chevron Corp. on Friday said it would cut another 1,000 jobs as it reported a wider-than-expected loss as oil prices continued to languish during the first quarter. The newly announced layoffs, which will happen later this year, will bring Chevron's job cuts to 8,000 employees, or 12% of its workforce. Shares in the second-largest energy company in the U.S. by revenue fell 1.5% to $100.91 in premarket trading. Chief Executive John Watson said the company's upstream business was impacted by a more than 35% decline in crude-oil prices. The company's average sales price per barrel of crude oil and natural gas liquids was $26 in the first quarter, down from $43 a year earlier. "Our downstream operations continued to perform well, although overall industry conditions and margins this quarter were weaker than a year ago," said Mr. Watson. Related * Exxon Mobil's Profit Plunges 63% * Oil Companies Begin to Benefit From Cost Cuts Chevron said late last year that it would cut up to 10% of its workforce and slash its capital spending budget by 25% this year. Like many of its peers, the San Ramon, Calif.-based oil company has looked to cut costs as sharply lower energy prices whack profitability. Chevron's upstream operations, which include exploration and drilling, were hit worst by the plunge in energy prices. In the U.S., the segment lost $1.46 billion after earning $1.56 billion a year earlier. In its downstream operations--refining--Chevron saw its profit nearly halve to $735 million. Over all, Chevron reported a loss of $725 million, or 39 cents a share, down from a profit of $2.57 billion, or $1.37 a share, a year earlier. The company said foreign-currency effects decreased earnings by $319 million in the quarter, compared with an increase of $580 million in the year-ago period. Revenue tumbled 31% to $23.55 billion. Analysts projected a loss of 20 cents on $21.43 billion in revenue, according to Thomson Reuters. Also Friday, rival Exxon Mobil Corp., the largest U.S. oil company, said its first-quarter profit plunged 63% as oil prices remain depressed, but the decline was smaller than analysts had predicted. Bradley Olson contributed to this article. Write to Anne Steele at Anne.Steele@wsj.com Credit: By Anne Steele
Subject: Financial performance; Corporate profits; Prices; Energy economics
Location: United States--US
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785223005
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785223005?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Investors Optimistic About Oil-Company Stocks After Earnings; Some oil executives say the green shoots of a gradual recovery may be sprouting in the oil patch
Author: Olson, Bradley; Sider, Alison; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
Shares of major oil companies including BP PLC and Total SA, and independent producers such as Pioneer Natural Resources Co., all gained after reporting first-quarter earnings because they either swung to a profit or reported smaller losses than anticipated.
Full text: Exxon Mobil Corp. reported its smallest quarterly profit since 1999 on Friday, the latest in a parade of woeful earnings out of oil and gas producers this year as a supply glut dragged down prices and ate into income. Despite the company's 63% drop in profit, investors shrugged off the weak performance and Exxon's shares rose less than 1% to $88.40. That mirrored a trend of generally higher oil and gas stocks after first-quarter earnings as crude prices this week climbed to their highest levels of the year. Shares of major oil companies including BP PLC and Total SA, and independent producers such as Pioneer Natural Resources Co., all gained after reporting first-quarter earnings because they either swung to a profit or reported smaller losses than anticipated. That sentiment has some energy executives optimistic the green shoots of a gradual recovery may be sprouting in the oil patch, as crude prices rise above $45 this week to their highest levels of the year. Prices for June delivery of the U.S. benchmark finished at $45.92 on Friday. Global demand for crude is showing a "healthy" increase and has begun to exceed the 10-year average, said Jeff Woodbury, Exxon's vice president of investor relations. "We've been through these down-cycles before," Mr. Woodbury said on Friday. "We built this business to be very durable in a low-price environment." BP said earlier this week its net loss shrunk nearly 80% from the prior quarter. On Wednesday, France's Total and Norway's Statoil ASA said they were back in the black last quarter after suffering losses in the final three months of 2015. The improved results reflect aggressive cuts in spending, in plans for drilling and employment that companies made to cope with a nearly two-year slump in crude prices. Along with a surge in oil prices, which have risen more than 70% from a February low, the results have helped fuel a 9% rally in energy stocks in the S&P 500 index in the past month. Related Reading * Exxon Mobil Posts Smallest Profit Since 1999 Merger * Chevron Reports Wider-Than-Expected Loss * TransCanada First-Quarter Profit Falls 35% * Phillips 66 Results Hurt by Low Energy Prices Not every company followed the trend. Chevron Corp. reported a $725 million loss on Friday compared with a profit of $2.6 billion in the first quarter of 2015. The greater-than-expected drop was the first time in at least two decades that Chevron had two quarterly losses in a row. Italian oil giant Eni SpA also reported a nearly $1 billion loss for the quarter, though its share price fell by less than 1% on Friday since the results weren't as bad as many investors predicted. In the U.S., the extreme belt tightening by oil companies is finally leading to declines in crude output that are expected to help rebalance the global market. Federal figures show daily U.S. oil production fell below 9 million barrels a few weeks ago, after peaking at 9.7 million a day in April 2015. "The market is already looking past these results since oil is up almost 80% from earlier lows," said Brian Youngberg, an energy analyst with Edward Jones. "The expectation was that earnings were going to be really bad for the entire sector, but many companies did better." Exxon, based in Irving, Texas, reported a profit of $1.81 billion, or 43 cents a share, down from $4.94 billion, or $1.17 a share, a year earlier. Analysts polled by Thomson Reuters expected a per-share profit of 31 cents. Revenue dropped 28% to $48.71 billion. Exxon and Chevron reported earnings nearly halved from their businesses refining and processing crude into gasoline and other fuels. Those units have been critical in the past 18 months in helping the companies weather the storm of falling prices. Refining has been among the only profitable businesses in the industry since prices began to fall precipitously in 2014. The units that explore for and produce oil and gas were the biggest red-ink generators for Exxon and Chevron. In the U.S., Exxon's shale company lost $832 million, and the overall loss globally for those operations was the first in more than a decade. Chevron's exploration and production unit lost about $1.5 billion, and the company said it would cut another 1,000 jobs later this year, bringing total job cuts to 8,000 employees, or 12% of its workforce. While the cost-slashing has helped energy companies protect their balance sheets, it has had a devastating impact on another part of the industry--the oil-field services providers that do the gritty work of drilling and pumping. Halliburton Co. took a $2.1 billion restructuring charge during the quarter, stemming from severance costs and from a write down of assets and infrastructure no longer needed. Baker Hughes Inc. reported a $981 million loss for the quarter, on revenue that declined 21% from the previous quarter, to $2.7 billion. Even Schlumberger Ltd., the world's largest oil-field services company, isn't immune. Its chief executive, Paal Kibsgaard, said exploration and production companies "displayed clear signs of operating in a full-scale cash crisis" during the first quarter. In North America, producers are cutting budgets by as much as 50% this year, Schlumberger said. The Anglo-Dutch company expects international spending to fall about 20%. "This is the toughest environment we have seen for 30 years, and it is likely to get even tougher before the market returns," Mr. Kibsgaard said. Erin Ailworth and Nicole Friedman contributed to this article. Credit: By Bradley Olson, Alison Sider and Sarah Kent
Subject: Net losses; Financial performance; Corporate profits; Prices; Petroleum production
Location: United States--US
Company / organization: Name: Pioneer Natural Resources Co; NAICS: 211111; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Statoil ASA; NAICS: 324110, 211111; Name: Eni SpA; NAICS: 324110, 211111; Name: Total SA; NAICS: 447190, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785223172
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785223172?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Forum Energy Buys Team Oil Tools' Wholesale Completion Packer Business
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
Publicly traded Forum Energy Technologies Inc. has acquired the wholesale completion packer business of Team Oil Tools Inc., an Intervale Capital-backed provider of completion equipment for the oil and gas sector.
Full text: Publicly traded Forum Energy Technologies Inc. has acquired the wholesale completion packer business of Team Oil Tools Inc., an Intervale Capital-backed provider of completion equipment for the oil and gas sector. The Team Oil unit makes and sells completion and service tools, including retrievable and permanent packers, bridge plugs, and accessories to oil-field service providers, packer repair companies and distributors world-wide. Forum Energy in a statement said Team Oil will continue to operate its North American completion technology and service business, which includes providing packer and service tools to exploration and production customers through its service center infrastructure. The oil-field products company said it has agreed to supply Team Oil with certain completion and service tool requirements. Team Oil said the transaction will allow it to focus on its "core strengths of developing innovative new completion technology" that is delivered through its customer-focused service centers. Financial terms of the deal weren't disclosed. Intervale acquired Team Oil in 2009 through its portfolio company Tejas Research and Engineering LP. Team Oil makes products such as toe valves, retrievable and seal bore packers, tubing anchors, composite plugs, drillable tools, treating assemblies and cemented sleeves for fracturing applications. The Woodlands, Texas, company has manufacturing operations in Conroe, Texas. Intervale invests exclusively in oil-field services and manufacturing companies and related technologies. The Cambridge, Mass., firm targets buyout investments in companies with $8 million to $50 million in trailing 12-month earnings before interest, taxation, depreciation and amortization. Intervale is investing from its third fund, Intervale Capital Fund III LP, which closed in 2014 at $495 million. In February, the firm said it invested alongside a management team to form Entegra LLP, a company providing inspection services for the energy industry.
Subject: Acquisitions & mergers; Energy industry
Location: Texas
Company / organization: Name: Forum Energy Technologies Inc; NAICS: 333132
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785304499
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785304499?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Weekly U.S. Oil-Rig Count Falls by 11; Drop extends a prolonged trend of declines
Author: Jamerson, Joshua
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs fell by one in the latest week to 87.
Full text: The U.S. oil-rig count fell by 11 to 332 in the latest week, according to Baker Hughes Inc., furthering a prolonged trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to fall. But it hasn't fallen enough to relieve the global glut of crude. There are about 79% fewer rigs of all kinds since a peak of 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs fell by one in the latest week to 87. The U.S. offshore-rig count was 25 in the latest week, down one from the previous week and down nine from a year earlier. Oil prices fell Friday amid expectations that the Organization of the Petroleum Exporting Countries increased its output after a failed attempt to agree on a production freeze. Recently, U.S. crude oil declined 0.7% to $45.71 a barrel. Write to Joshua Jamerson at joshua.jamerson@wsj.com Corrections & Amplifications An earlier version of this article miscalculated the percentage drop in oil rigs from the peak in October 2014. The number of oil rigs dropped 79% from the peak, not 73%. (May 6, 2016) Credit: By Joshua Jamerson
Subject: Oil service industry; Supply & demand
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785332287
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785332287?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Big Oil, Big Mistake: Investors Overpay for Income at Exxon; Share prices defy gravity despite big slump in quarterly results
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a.
Abstract:
[...]this happened alongside: record global inventories, a recently failed production freeze by major exporters, a Federal Reserve in tightening mode and a slowdown in emerging-market economies. Several relatively dowdy companies look pricey on that basis, too, with supermarket chain Kroger, cereal-maker Kellogg, household-goods maker Colgate-Palmolive, fast-food chain McDonald's and pharmaceutical giant Pfizer fetching a 30% premium on average to their multiples from 2010 through 2015.
Full text: What's the big deal about big oil? If a time traveler had shown Friday's first-quarter results for Exxon Mobil and Chevron to an investor a year ago, that person would have had a tough time guessing their share prices today. Exxon's results beat expectations , but it posted its worst quarterly earnings this century. Chevron's loss was its worst in 15 years. And this happened alongside: record global inventories, a recently failed production freeze by major exporters, a Federal Reserve in tightening mode and a slowdown in emerging-market economies. So share price predictions for Exxon and Chevron would have been pretty grim. But no--their stocks are doing fine. And that may not have so much to do with the price of oil. The attraction appears to be stability, and extraordinarily consistent Exxon wins the beauty contest in that regard. Not only has it outperformed its peers by an average of nearly 14 percentage points over the past year in total shareholder return, but it has edged out the S&P 500 by over five points. Yes, both companies have suffered debt-rating downgrades and halted their once-prodigious stock buyback programs. But both Exxon and Chevron remain dividend aristocrats--the 10% or so of companies in the S&P 500 that have increased dividends annually for at least a quarter century. Their status as integrated companies provides a downstream cushion to the upstream carnage caused by low hydrocarbon prices, but not enough. Both companies had to pay out more than their free cash flow last quarter despite big reductions in capital spending. It is time for a reality check. If investors think the still-glum consensus outlook on oil and natural-gas prices is wrong then they should bet instead on pure exploration and production companies. Those would benefit far more from higher prices. But, if investors want safety and income in the seventh year of Lilliputian bond yields, they seem to be overpaying. Both Exxon and Chevron now command nearly their highest multiple of projected enterprise value to earnings before interest, tax, depreciation and amortization since the spring of 2000. Several relatively dowdy companies look pricey on that basis, too, with supermarket chain Kroger, cereal-maker Kellogg, household-goods maker Colgate-Palmolive, fast-food chain McDonald's and pharmaceutical giant Pfizer fetching a 30% premium on average to their multiples from 2010 through 2015. "Safety" is a poorly understood term. Just because the odds of a dividend cut are remote it doesn't mean a company's share price isn't vulnerable. Paying up for big oil in what could still be a prolonged industry slump could end up being downright dangerous. Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Subject: Prices; Investments; Financial performance
Company / organization: Name: Pfizer Inc; NAICS: 339113, 325412; Name: Colgate-Palmolive Co; NAICS: 325620, 311911
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785332789
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785332789?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dai's Take: Oil Price Slump Hits Public PE Firms' Financial Results
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Apr 2016: n/a. [Duplicate]
Abstract:
Dai's Take: Oil Price Slump Hits Public PE Firms' Financial Results Quarterly earnings reports from publicly listed private-equity firms offer a window into how the slump in oil and natural gas prices has affected some firms' financial results.
Full text: Welcome to the new WSJ Pro PE Check out our new website, http://www.wsj.com.ezproxy.uta.edu/pro/privateequity , for data, infographics and a 10-year archive of stories. Dai's Take: Oil Price Slump Hits Public PE Firms' Financial Results Quarterly earnings reports from publicly listed private-equity firms offer a window into how the slump in oil and natural gas prices has affected some firms' financial results. So far, the commodity price downturn--now in its second year--has produced losses in energy holdings across equity and credit units at such firms as Blackstone Group, KKR & Co., Carlyle Group and Oaktree Capital Group. But many of these firms continue to play down the severity of the impact, contending that most of the losses are unrealized and can be reversed when commodity prices recover. Blackstone, for instance, reported negative net returns during the first quarter from both the distressed- and performing-credit businesses. Chief Financial Officer Michael Chae said the negative returns were largely a result of mark-to-market accounting, and that "substantially all of [them] are unrealized." KKR posted more than $100 million in unrealized losses from its energy portfolio, as well as losses in "a handful of positions" within its credit and specialty finance portfolios. Carlyle marked down the value of its natural resources funds, and that of its global market strategies, which consists of credit, hedge funds, midmarket finance, energy mezzanine and distressed debt funds. Oaktree, meanwhile, took a $23 million impairment charge on investments in certain collateralized loan obligations primarily stemming from energy holdings. However, a few firms, ever the optimists, continue to invest money into new energy deals, some of which have already begun to appreciate. Oaktree, for instance, bought distressed debt in companies in oil and gas exploration and production, energy midstream, metals and mining during the first few weeks of this year, when the credit markets got hammered by persistently low oil prices. Some of those investments appreciated by as much as 20 to 30 percentage points in March, when credit markets rebounded, said Bruce Karsh, co-chairman and chief investment officer of Oaktree. The firm took advantage of the market recovery to sell a few holdings and "recycle proceeds," said Mr. Karsh. Blackstone's president, Tony James, speaking on a conference call discussing the financial results, called the market turmoil during the first few weeks of this year a "technical backup" caused by a lack of liquidity. "Companies that need to access capital are increasingly dependent on investors like us," said Mr. James. Write to Shasha Dai at shasha.dai@wsj.com. TUESDAY, MAY 3 -- Kentucky Retirement Systems THURSDAY, MAY 5 -- San Bernardino County Employees Retirement Association MONDAY, MAY 16 -- Employees Retirement System of Texas Send us your tips, suggestions and feedback. Write to: Yolanda Bobeldijk; Laura Cooper ; Chris Cumming ; Shasha Dai ; Braden Kelner ; Laura Kreutzer ; Dawn Lim ; William Louch ; Mike Lucas ; Amy Or ; Becky Pritchard ; David Smagalla ; Chitra Vemuri . Follow us on Twitter: @YEBobeldijk , @LCooperReports , @ShashaDai1 , @bradenkelner , @LauraKreutzer , @dawnlim , @william_louch , @Lucastoons , @beckspritchard , @DSmagall_DJ
Subject: Financial performance; Natural gas prices; Collateralized loan obligations
People: James, Tony Karsh, Bruce Chae, Michael
Company / organization: Name: Kohlberg Kravis Roberts & Co LP; NAICS: 523920; Name: Carlyle Group; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 29, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785707701
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785707701?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Patch Relieved by Price Rebound; Rally has been more powerful than most analysts and investors anticipated
Author: Friedman, Nicole; Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Apr 2016: n/a.
Abstract:
Prices climbed toward $47 a barrel on the New York Mercantile Exchange but then retreated as traders digested forecasts for increased supply from members of the Organization of the Petroleum Exporting Countries and reports that showed continued declines in U.S. oil production.
Full text: Oil prices finished their best month in a year on Friday and are headed back toward $50 a barrel, bringing some relief to beleaguered energy producers even though they reported some of their worst quarterly results in years. Benchmark U.S. oil futures rose 20% in April, despite a slight slip Friday, and have surged 75% since bottoming out in February at a 13-year low. The rally has been more powerful than most analysts and investors anticipated. Declining U.S. production, corporate cost-cutting and production outages around the world have raised hopes that the crude-oil glut might be easing. In another sign of growing optimism, shares of Exxon Mobil Corp. rose 0.4% Friday even though the world's largest publicly traded oil company said its profits shrank 63% to their lowest level since 1999. So far this year, Exxon shares have risen 13%. Energy stocks in the S&P 500 are up nearly 9% in the past month alone. BP PLC shares rose Tuesday after it reported results that beat analysts' expectations despite oil prices that averaged about $34 a barrel in the quarter. Related * Investors Optimistic About Oil-Company Stocks After Earnings * Heard: Big Oil, Big Mistake: Investors Overpay for Income at Exxon * Oil Falls From Day's High, Back Below $46 Energy analysts have warned that tough times aren't over yet, especially if rising prices give oil companies confidence to ramp up projects they had suspended when prices were low. Last spring's oil-price rally to $60 a barrel encouraged some U.S. producers to put new drilling rigs to work--and then prices fell to painful new lows. The colliding moods were noticeable in the oil markets Friday. Prices climbed toward $47 a barrel on the New York Mercantile Exchange but then retreated as traders digested forecasts for increased supply from members of the Organization of the Petroleum Exporting Countries and reports that showed continued declines in U.S. oil production. Light, sweet crude for June delivery settled down 11 cents, or 0.2%, to $45.92 a barrel. Brent, the global benchmark, fell a penny to $48.13 a barrel on ICE Futures Europe. "We're waiting until we see some clear signs that we've found a bottom," said Joseph Tanious, senior investment strategist at Bessemer Trust. "What we're seeing right now is encouraging, but we're not there yet." Crude prices dropped sharply at the start of 2016, causing analysts to cut their fourth-quarter price targets as low as $29 a barrel. Some analysts said they didn't see the basis for a rebound until next year, and skeptics expect prices to fall from their current levels. So far, though, the recent rally in oil prices has withstood setbacks such as oil producers' failure to agree to a production freeze at an April summit in Doha, Qatar. The rally also has helped soothe global markets by easing investor concerns about energy-company debt defaults and stress on banks with exposure to the energy industry. The global energy industry can keep its debt levels steady if Brent holds at $53 a barrel or higher, according to energy consulting firm Wood Mackenzie. For the U.S. shale industry, the price needed to stop bleeding cash is $45 a barrel, down from $90 a barrel a year ago, helped by cost-cutting, increased efficiency, equity offerings and other measures, the consulting firm said. While oil prices have pushed up the cost of gasoline at the pump, consumers are still enjoying relatively low prices. U.S. drivers on Friday paid an average of $2.20 a gallon for gas, the lowest for this date since 2009, according to motor club AAA. The recent gains could be self-defeating if producers flood the market with new supply before the current glut is worked off. Investors are watching for signs that U.S. companies will be able to add new production by drilling new wells or bringing thousands of already drilled wells online. Scott Sheffield, chief executive of U.S. shale producer Pioneer Natural Resources Co., said his company will look to add up to 10 rigs if oil prices improve to about $50 a barrel. But few of his U.S. industry peers could do the same unless prices rise to $60 and companies sell assets, raise equity and pay down debt, he said. Hess Corp. told analysts this week that its threshold for adding new drilling rigs is close to $60 a barrel. "There is definitely some caution that they don't want to jump back in too fast and see the price fall below $40," said Rhidoy Rashid, analyst at London consulting firm Energy Aspects. Many producers "couldn't deal with that again for another extended period of time," he said. U.S. oil production fell 0.6% in February, a fifth straight monthly decline, the Energy Information Administration said Friday. The number of rigs drilling for oil in the U.S. fell by 11 this week to 332, down 79% from a peak in October 2014, oil-field-services firm Baker Hughes Inc. said Friday. Production is also expected to fall this year in some other parts of the world, including Mexico, Norway and Kazakhstan, due to a lack of new investment. Iraq is behind in payments to international oil companies, threatening future production in those countries. On the other hand, the failure in Doha to reach a deal capping output increases the possibility that some large producing nations could ramp up production in a fierce competition for market share. Some supply outages have already been resolved, and Iran is likely to keep adding to its production now that international sanctions have been lifted. Consulting firm JBC Energy said Friday that OPEC production likely rose by about 100,000 barrels a day in April. Official data will be reported in May. Some analysts are already assessing how companies will perform as prices rise, said Marshall Adkins, director of energy research at Raymond James & Associates Inc. On earnings calls with companies this week, he said, "The questions are all about: 'When things rebound, how are you positioned?' " Benoit Faucon, Bradley Olson and Selina Williams contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com and Erin Ailworth at Erin.Ailworth@wsj.com Credit: By Nicole Friedman and Erin Ailworth
Subject: Consulting firms; Crude oil prices; Petroleum production; Energy industry
Location: United States--US
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Apr 30, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785397833
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Chinese Oil Sector Bends to Slump
Author: Spegele, Brian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Apr 2016: B.4.
Abstract:
China's oil giants are showing mixed results amid the global oil-price slump, highlighting the need for more cost-cutting by some and testing the government's support for state-owned conglomerates.
Full text: BEIJING -- China's oil giants are showing mixed results amid the global oil-price slump, highlighting the need for more cost-cutting by some and testing the government's support for state-owned conglomerates. The country's largest producer by volume, state-controlled PetroChina Co., posted a first-quarter loss of 13.8 billion yuan ($2.13 billion), its first-ever quarterly loss. In contrast, rival China Petroleum & Chemical Corp. said on Friday its profit tripled from a year earlier to 6.7 billion yuan. China Petroleum & Chemical, also known as Sinopec, is doing better because it has larger refining operations, including making gasoline. Profit margins have benefited from low crude prices and government policies that kept retail fuel prices artificially high. PetroChina's reliance on pumping oil from expensive and aging wells makes the company especially susceptible to weak oil prices. The first-quarter loss underscored its challenges -- including the huge overhead costs of a workforce of more than 500,000 -- and stirred doubts it will be able to sustain its dividend payout this year. The company said its core exploration-and-production segment swung to a loss of 20.3 billion yuan in the first quarter from a 17.3 billion yuan profit a year earlier. A 14.7 billion yuan profit for its refining and chemicals division on the back of government subsidies wasn't enough to compensate. "Management is not taking radical enough steps to improve performance," said Hong Kong-based Bernstein Research analyst Neil Beveridge. "PetroChina needs to be more aggressive in shutting down loss-making upstream assets and trimming expenses." How hard the government pushes PetroChina to improve its performance this year remains to be seen. In a slowing economy, job stability is an imperative for leaders in Beijing. That means China's oil giants can't lay off huge numbers, as much of the global industry has done. At the same time, the government is intent on having the company maintain its dividend payout, said Laban Yu, energy analyst at investment bank Jefferies. "We believe the central government will increasingly demand dividends from [state-owned enterprises] as it cuts taxes to stimulate growth," he said. PetroChina expects oil prices to remain low this year, but said its position will be helped in the second quarter by its closing a multibillion yuan deal to sell stakes in some of its pipelines. Mr. Yu said further pipeline sales are needed this year. Offshore oil explorer Cnooc Ltd., the smallest of China's big three oil companies, doesn't report quarterly profit, but said it stemmed the effects of falling revenue through strict cost controls. It also reported its production rose 5% in the first quarter as new projects came online. State-controlled Sinopec has done well by the large spread between the price it pays for crude oil and the price it gets for its refined products. Under the government's fuel-pricing policy introduced in January, downward adjustments of retail prices for products such as gasoline and diesel are suspended when global crude prices fall below $40 a barrel. Sinopec also outdid PetroChina by making deeper cuts in production from high-cost fields. Its total oil production fell more than 10% in the quarter. Lower production at home would likely mean increased oil imports by the company, and analysts described Sinopec's move as a positive both for the company and for global markets. "Not only will this help Sinopec stem losses, but it will also help rebalancing of global crude markets," Mr. Beveridge said. Credit: By Brian Spegele
Subject: Financial performance; Crude oil prices; Gasoline prices; Petroleum production; Company reports
Location: China
Company / organization: Name: CNOOC Ltd; NAICS: 211111; Name: China Petroleum & Chemical Corp; NAICS: 211111
Classification: 8510: Petroleum industry; 9179: Asia & the Pacific
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Apr 30, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785452511
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785452511?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Patch Relieved By Price Rebound
Author: Friedman, Nicole; Ailworth, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Apr 2016: A.1.
Abstract:
Prices climbed toward $47 a barrel on the New York Mercantile Exchange but then retreated as traders digested forecasts for increased supply from members of the Organization of the Petroleum Exporting Countries and reports that showed continued declines in U.S. oil production.
Full text: Oil prices finished their best month in a year on Friday and are headed back toward $50 a barrel, bringing some relief to beleaguered energy producers even though they reported some of their worst quarterly results in years. Benchmark U.S. oil futures rose 20% in April, despite a slight slip Friday, and have surged 75% since bottoming out in February at a 13-year low. The rally has been more powerful than most analysts and investors anticipated. Declining U.S. production, corporate cost-cutting and production outages around the world have raised hopes that the crude-oil glut might be easing. In another sign of growing optimism, shares of Exxon Mobil Corp. rose 0.4% Friday even though the world's largest publicly traded oil company said its profits shrank 63% to their lowest level since 1999. So far this year, Exxon shares have risen 13%. Energy stocks in the S&P 500 are up nearly 9% in the past month alone. BP PLC shares rose Tuesday after it reported results that beat analysts' expectations despite oil prices that averaged about $34 a barrel in the quarter. Energy analysts have warned that tough times aren't over yet, especially if rising prices give oil companies confidence to ramp up projects they had suspended when prices were low. Last spring's oil-price rally to $60 a barrel encouraged some U.S. producers to put new drilling rigs to work -- and then prices fell to painful new lows. The colliding moods were noticeable in the oil markets Friday. Prices climbed toward $47 a barrel on the New York Mercantile Exchange but then retreated as traders digested forecasts for increased supply from members of the Organization of the Petroleum Exporting Countries and reports that showed continued declines in U.S. oil production. Light, sweet crude for June delivery settled down 11 cents, or 0.2%, to $45.92 a barrel. Brent, the global benchmark, fell a penny to $48.13 a barrel on ICE Futures Europe. "We're waiting until we see some clear signs that we've found a bottom," said Joseph Tanious, senior investment strategist at Bessemer Trust. "What we're seeing right now is encouraging, but we're not there yet." Crude prices dropped sharply at the start of 2016, causing analysts to cut their fourth-quarter price targets as low as $29 a barrel. Some analysts said they didn't see the basis for a rebound until next year, and skeptics expect prices to fall from their current levels. So far, though, the recent rally in oil prices has withstood setbacks such as oil producers' failure to agree to a production freeze at an April summit in Doha, Qatar. The rally also has helped soothe global markets by easing investor concerns about energy-company debt defaults and stress on banks with exposure to the energy industry. The global energy industry can keep its debt levels steady if Brent holds at $53 a barrel or higher, according to energy consulting firm Wood Mackenzie. For the U.S. shale industry, the price needed to stop bleeding cash is $45 a barrel, down from $90 a barrel a year ago, helped by cost-cutting, increased efficiency, equity offerings and other measures, the consulting firm said. While oil prices have pushed up the cost of gasoline at the pump, consumers are still enjoying relatively low prices. U.S. drivers on Friday paid an average of $2.20 a gallon for gas, the lowest for this date since 2009, according to motor club AAA. The recent gains could be self-defeating if producers flood the market with new supply before the current glut is worked off. Investors are watching for signs that U.S. companies will be able to add new production by drilling new wells or bringing thousands of already drilled wells online. Scott Sheffield, chief executive of U.S. shale producer Pioneer Natural Resources Co., said his company will look to add up to 10 rigs if oil prices improve to about $50 a barrel. But few of his U.S. industry peers could do the same unless prices rise to $60 and companies sell assets, raise equity and pay down debt, he said. Hess Corp. told analysts this week that its threshold for adding new drilling rigs is close to $60 a barrel. "There is definitely some caution that they don't want to jump back in too fast and see the price fall below $40," said Rhidoy Rashid, analyst at London consulting firm Energy Aspects. Many producers "couldn't deal with that again for another extended period of time," he said. U.S. oil production fell 0.6% in February, a fifth straight monthly decline, the Energy Information Administration said Friday. The number of rigs drilling for oil in the U.S. fell by 11 this week to 332, down 79% from a peak in October 2014, oil-field-services firm Baker Hughes Inc. said Friday. Production is also expected to fall this year in some other parts of the world, including Mexico, Norway and Kazakhstan, due to a lack of new investment. Iraq is behind in payments to international oil companies, threatening future production in those countries. On the other hand, the failure in Doha to reach a deal capping output increases the possibility that some large producing nations could ramp up production in a fierce competition for market share. Some supply outages have already been resolved, and Iran is likely to keep adding to its production now that international sanctions have been lifted. Consulting firm JBC Energy said Friday that OPEC production likely rose by about 100,000 barrels a day in April. Official data will be reported in May. Some analysts are already assessing how companies will perform as prices rise, said Marshall Adkins, director of energy research at Raymond James & Associates Inc. On earnings calls with companies this week, he said, "The questions are all about: 'When things rebound, how are you positioned?'" --- Benoit Faucon, Bradley Olson and Selina Williams contributed to this article. Credit: By Nicole Friedman and Erin Ailworth
Subject: Energy industry; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Apr 30, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785964250
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785964250?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Exxon Swoons, but Investors Cheer --- U.S. oil giant is latest to post dismal results, but shareholders see hope as prices rise
Author: Olson, Bradley; Sider, Alison; Kent, Sarah
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Apr 2016: B.4.
Abstract:
Exxon Mobil Corp. reported its smallest quarterly profit since 1999 on Friday, the latest in a parade of woeful earnings out of oil and gas producers this year as a supply glut dragged down prices and ate into income. Shares of major oil companies including BP PLC and Total SA, and independent producers such as Pioneer Natural Resources Co., all gained after reporting first-quarter earnings because they either swung to a profit or reported smaller losses than anticipated.
Full text: Exxon Mobil Corp. reported its smallest quarterly profit since 1999 on Friday, the latest in a parade of woeful earnings out of oil and gas producers this year as a supply glut dragged down prices and ate into income. Despite the company's 63% drop in profit, investors shrugged off the weak performance and Exxon's shares rose less than 1% to $88.40. That mirrored a trend of generally higher oil and gas stocks after first-quarter earnings as crude prices this week climbed to their highest levels of the year. Shares of major oil companies including BP PLC and Total SA, and independent producers such as Pioneer Natural Resources Co., all gained after reporting first-quarter earnings because they either swung to a profit or reported smaller losses than anticipated. That sentiment has some energy executives optimistic the green shoots of a gradual recovery may be sprouting in the oil patch, as crude prices rise above $45 this week to their highest levels of the year. Prices for June delivery of the U.S. benchmark finished at $45.92 on Friday. Global demand for crude is showing a "healthy" increase and has begun to exceed the 10-year average, said Jeff Woodbury, Exxon's vice president of investor relations. "We've been through these down-cycles before," Mr. Woodbury said on Friday. "We built this business to be very durable in a low-price environment." BP said earlier this week its net loss shrunk nearly 80% from the prior quarter. On Wednesday, France's Total and Norway's Statoil ASA said they were back in the black last quarter after suffering losses in the final three months of 2015. The improved results reflect aggressive cuts in spending, in plans for drilling and employment that companies made to cope with a nearly two-year slump in crude prices. Along with a surge in oil prices, which have risen more than 70% from a February low, the results have helped fuel a 9% rally in energy stocks in the S&P 500 index in the past month. Not every company followed the trend. Chevron Corp. reported a $725 million loss on Friday compared with a profit of $2.6 billion in the first quarter of 2015. Italian oil giant Eni SpA also reported a nearly $1 billion loss for the quarter, though its share price fell by less than 1% on Friday since the results weren't as bad as many investors had predicted. In the U.S., the extreme belt tightening by oil companies is finally leading to declines in crude output that are expected to help rebalance the global market. Federal figures show daily U.S. oil production fell below 9 million barrels a few weeks ago, after peaking at 9.7 million a day in April 2015. "The market is already looking past these results since oil is up almost 80% from earlier lows," said Brian Youngberg, an energy analyst with Edward Jones. "The expectation was that earnings were going to be really bad for the entire sector, but many companies did better." Exxon, based in Irving, Texas, reported a profit of $1.81 billion, or 43 cents a share, down from $4.94 billion, or $1.17 a share, a year earlier. Analysts polled by Thomson Reuters expected a per-share profit of 31 cents. Revenue dropped 28% to $48.71 billion. Exxon and Chevron reported earnings nearly halved from their businesses refining and processing crude into gasoline and other fuels. Those units have been critical in the past 18 months in helping the companies weather the storm of falling prices. Refining has been among the only profitable businesses in the industry since prices began to fall precipitously in 2014. The units that explore for and produce oil and gas were the biggest red-ink generators for Exxon and Chevron. In the U.S., Exxon's shale company lost $832 million, and the overall loss globally for those operations was the first in more than a decade. Chevron's exploration and production unit lost about $1.5 billion, and the company said it would cut another 1,000 jobs later this year, bringing total job cuts to 8,000 employees, or 12% of its workforce. While the cost-slashing has helped energy companies protect their balance sheets, it has had a devastating impact on another part of the industry -- the oil-field services providers that do the gritty work of drilling and pumping. Halliburton Co. took a $2.1 billion restructuring charge during the quarter, stemming from severance costs and from a write down of assets and infrastructure no longer needed. Baker Hughes Inc. reported a $981 million loss for the quarter, on revenue that declined 21% from the previous quarter, to $2.7 billion. Even Schlumberger Ltd., the world's largest oil-field services company by revenue, isn't immune. Its chief executive, Paal Kibsgaard, said exploration and production companies "displayed clear signs of operating in a full-scale cash crisis" during the first quarter. In North America, producers are cutting budgets by as much as 50% this year, Schlumberger said. The Anglo-Dutch company expects international spending to fall about 20%. "This is the toughest environment we have seen for 30 years, and it is likely to get even tougher before the market returns," Mr. Kibsgaard said. --- Erin Ailworth and Nicole Friedman contributed to this article. Credit: By Bradley Olson, Alison Sider and Sarah Kent
Subject: Net losses; Financial performance; Petroleum production; Company reports
Location: United States--US
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Exxon Mobil Corp; NAICS: 211111, 447110
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Apr 30, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785964301
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785964301?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Companies Ultra Petroleum, Midstates File for Bankruptcy; Companies join a host of other oil and gas companies experiencing financial distress
Author: Fitzgerald, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 May 2016: n/a.
Abstract:
Ultra, which has some $3.8 billion in debt--all of it unsecured--filed for bankruptcy after failing to reach a debt-restructuring deal with its lenders and bondholders, according to an affidavit filed by Chief Financial Officer Garland R. Shaw.
Full text: Two more publicly traded oil and natural gas companies, with combined debts of more than $5.8 billion, filed for chapter 11 bankruptcy protection in Texas as the industry continues to suffer amid stubbornly low prices. Houston's Ultra Petroleum Corp. and Oklahoma-based Midstates Petroleum Co. separately filed for court protection Friday in U.S. Bankruptcy Court in Houston. Ultra, which has some $3.8 billion in debt--all of it unsecured--filed for bankruptcy after failing to reach a debt-restructuring deal with its lenders and bondholders, according to an affidavit filed by Chief Financial Officer Garland R. Shaw. Midstates, meanwhile, filed for bankruptcy after reaching a preliminary deal with its lenders and bondholders on the terms of a $2 billion debt-for-equity swap. Both companies, in court filings, pointed to persistently low commodity prices as the reason for their financial woes. Natural gas prices have been depressed for years and prices for crude have undergone a similarly steep decline, according to Nelson M. Haight, Midstates' CFO. Although benchmark U.S. oil prices have rebounded to around $46 a barrel since hitting a 13-year low in February, they're still well below the $100 per barrel producers were getting as recently as the summer of 2014. Ultra, with 159 full-time employees, operates mainly in Wyoming's Pinedale Field, which produces natural gas. The company also owns properties in Utah, which produce primarily crude oil, and Pennsylvania, which produce natural gas. Midstates, which has 120 full-time workers, drills for crude and natural gas in Texas and Oklahoma. Midstates and Ultra join a host of other oil and gas companies experiencing financial distress. Many have already filed for bankruptcy , and more are expected to this year. Sixty-seven oil and gas exploration and production companies filed bankruptcy proceedings last year, a 380% increase from 2014, according to consulting firm Gavin/Solmonese. U.S. Bankruptcy Judge Marvin Isgur is overseeing Ultra's chapter 11 case. An initial hearing is set for Tuesday. Judge David R Jones, who will oversee Midstates's case, has scheduled a debut hearing for Monday. Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com Credit: By Patrick Fitzgerald
Subject: Bankruptcy reorganization; Bankruptcy; Energy economics; Court hearings & proceedings; Natural gas prices
Location: United States--US Texas
Company / organization: Name: Ultra Petroleum Corp; NAICS: 211111; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 1, 2016
Section: ABC
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785716828
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785716828?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Deal Unravels Amid Scrutiny
Author: Sider, Alison
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 May 2016: A.1.
Abstract:
Halliburton Co. and Baker Hughes Inc. called off their merger, once valued at nearly $35 billion, which encountered opposition on several continents from regulators who claimed that it would hurt competition in the oil-field services business.
Full text: Halliburton Co. and Baker Hughes Inc. called off their merger, once valued at nearly $35 billion, which encountered opposition on several continents from regulators who claimed that it would hurt competition in the oil-field services business. The deal to combine the world's second- and third-largest oil-field services firms after Schlumberger Ltd. appeared troubled since April 6, when the Justice Department filed a lawsuit to block it. The merger also had encountered opposition from regulators in Europe. The companies had anticipated regulatory challenges when they originally struck their agreement in 2014, but repeatedly stressed that they felt the obstacles could be overcome, even as analysts and other experts questioned the risk. The two sides previously set April 30 as the day when the agreement would expire, allowing either to walk away from the deal. Halliburton said Sunday evening that it would pay a $3.5 billion breakup fee to Baker Hughes -- a condition of the merger agreement put in place in a nod to anticipated regulatory challenges. At current share prices, the deal would have been valued at more than $28 billion. "This was an extremely complex, global transaction and, ultimately, a solution could not be found to satisfy the antitrust concerns of regulators," Baker Hughes Chief Executive Martin Craighead said in a statement Sunday night. Halliburton CEO Dave Lesar said challenges in obtaining regulatory approvals as well as "general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action." The Justice Department suit argued the merger would eliminate head-to-head competition in as many as 23 product lines, which would lead to higher prices and less innovation. At the time, both companies were aggressive in their pledges to fight back, contending that they believed they could disprove the Justice Department's allegations in court. They sought to have the case heard in Texas, where some analysts said they would be more likely to prevail. U.S Attorney General Loretta Lynch described the decision to abandon the deal as "a victory for the U.S. economy and for all Americans." "This case serves as a stark reminder that no merger is too big or too complex to be challenged," she said in a statement Sunday. While the companies' efforts to sell off businesses had left antitrust officials unmoved, Halliburton pressed ahead in serious talks with Carlyle Group, a private-equity firm with a long track record of creating stand-alone businesses from the castoffs of larger companies. Halliburton had been in talks with both Carlyle Group and General Electric Co. about a package of divestitures to appease regulators that could have fetched between $6 billion and $7 billion in a sale, people familiar with the matter have said. The end of the merger leaves those divestiture plans uncertain. News that the companies were preparing to end the merger was reported earlier Sunday by Bloomberg. Halliburton announced late last week that it would take a $2.1 billion restructuring charge to its first-quarter earnings, relating to severance costs from layoffs and writing down of the value of some of its assets, like older fracking pumps that are no longer being used. In the past, Halliburton has said it had to keep some excess infrastructure in place, despite the downturn, to be ready to integrate Baker Hughes and quickly ramp up as a combined company. Due to the breakup fee, a newly independent Baker Hughes would be flush with cash, which some analysts have said will give it the cushion it needs to retrench. But experts say a failed deal also presents major challenges for the company, which was formed in 1987 through the merger of Baker International and Hughes Tool Co., which was founded by the father of billionaire aviator, inventor and Hollywood tycoon Howard Hughes Jr. The elder Howard Hughes patented a new drill bit with two rotating cones that could chew through hard rock, allowing drillers to reach oil deeper below the Earth's surface than they ever had before. Even today, Baker Hughes is considered a leader in developing new technologies for the oil patch. The company, however, has struggled in its newer ventures into businesses such as fracking, which require mastery of vast supply chains and logistical challenges, said analysts at Piper Jaffray Co. And the company's struggles have been compounded by a year in limbo, tethered to Halliburton. Oil-field services firms, which are hired to drill and frack wells, were among the first to feel the pain from lower oil prices, and have been forced to make some of the deepest cuts. Most are losing money in big markets such as North America. But Baker Hughes has been constrained by its merger agreement from making sweeping changes without Halliburton's approval. The company said this week that it carried $110 million of costs during the first quarter that it wasn't able to cut because of the merger, contributing to its $981 million loss. With the merger scuttled, "the company can begin restructuring and stripping these excess costs from the system," Raymond James analysts wrote last week, anticipating that the deal would be called off. For the rank-and-file at Baker Hughes, the merger compounded the uncertainty created by plummeting oil prices, and many of those who could find other jobs left, according to analyst reports and interviews with former employees. Still, many analysts believe that all the hand-wringing about Baker Hughes's fate is overblown: Standing on its own, the company could shake off the malaise that has plagued it in the past year. Unlike many of its peers, Baker Hughes will have about $5 billion to spend when oil prices recover and activity ramps up, so it could rebuild and could come out swinging. "Independently, Baker would quickly become a turnaround story," Evercore ISI analyst James West recently wrote. Baker Hughes may get a push from the outside. ValueAct Capital Management, an activist hedge fund, bought Baker Hughes shares shortly after the merger was announced. In April, the fund disclosed that it increased its stake and is now Baker Hughes's largest shareholder, with 9% of its shares. ValueAct previously has pushed for Baker Hughes to consider breaking itself up and seeking other buyers if the merger falls apart, according to a lawsuit brought by the Justice Department over how ValueAct disclosed its initial stake in the company. And the fund has signaled that it won't sit by quietly as Baker Hughes gets its house in order. In a recent securities filing, ValueAct indicated that it may seek a seat on the company's board. Credit: By Alison Sider
Subject: Acquisitions & mergers; Oil service industry; Antitrust
Company / organization: Name: Department of Justice; NAICS: 922130; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990
Classification: 2330: Acquisitions & mergers; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: May 2, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785699478
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785699478?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Extend Falls in Asia; June Brent crude on London's ICE Futures exchange fell $0.42 to $46.95 a barrel
Author: Mukherji, Biman
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
According to an ANZ Bank report, crude oil production by member countries of the Organization of the Petroleum Exporting Countries (OPEC) surged by 484,000 barrels to 33.217 million a day in April.
Full text: Crude oil prices extended a fall on Monday from the end of last week as profit-taking offset positive sentiment from declining U.S. crude oil production and a weaker dollar. The profit-taking started end of last week as crude oil prices reached 2016 highs as investors pinned their hopes on expectations that declining crude oil inventories would continue, ignoring persistent oversupply in the market. "Overall, the supply situation hasn't changed much," said Gnanasekar Thiagarajan, director at Commtrendz Risk Management. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $45.56 a barrel at 0241 GMT, down $0.36 in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell $0.42 to $46.95 a barrel. Data released by the U.S. Energy Department on Wednesday showed a drop in domestic crude production for the seventh consecutive week, reducing output by 300,000 barrels since the beginning of the year. "Oil inventories in the U.S. are still rising and production is only ticking down, reflecting the flexibility of U.S. shale oil, higher prices could prevent any further reduction in output," a report by Capital Economics said. "What's more, Saudi Arabia could increase production over the summer when domestic demand peaks," the report said, adding that oil prices could dip before resuming their upward march this year. According to an ANZ Bank report, crude oil production by member countries of the Organization of the Petroleum Exporting Countries (OPEC) surged by 484,000 barrels to 33.217 million a day in April. Analysts said a fundamental rebalancing of oil markets may yet take some time to materialize, before bringing a sustained price recovery. Write to Biman Mukherji at biman.mukherji@wsj.com Credit: By Biman Mukherji
Subject: Crude oil; Crude oil prices; Supply & demand; Profits; Inventory; Petroleum production
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Australia & New Zealand Banking Group Ltd; NAICS: 522110, 523120, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785716587
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785716587?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Slide on Bearish Data; OPEC production figures reinforce concerns oversupply fundamentals still gripping the market
Author: Berthelsen, Christian; Baxter, Kevin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
U.S. and global oil prices fell sharply Monday after data showed rising oil stockpiles in the U.S. and increased production from the Organization of the Petroleum Exporting Countries.
Full text: U.S. and global oil prices fell sharply Monday after data showed rising oil stockpiles in the U.S. and increased production from the Organization of the Petroleum Exporting Countries. Analysts and brokers said the three-month, 70% rally in oil prices appeared to be losing steam, with speculative bets hitting their highest levels in a year even as supply-and-demand conditions have yet to show substantial improvement. "It's well over-bought and well over-supplied," said Bob Yawger, director of the futures division at investment bank Mizuho Securities USA. Data released Monday by private forecaster Genscape Inc. said supply levels at the key U.S. delivery hub in Cushing, Okla., rose by 871,000 barrels last week, according to people familiar with the report's contents. Market bulls have been hoping inventory levels would begin to decline in tandem with falling U.S. production. Oil prices, which were already down in early trading, fell further after the data's release. "Genscape of course was the final nail in the coffin," said Phil Flynn, an account executive at Chicago brokerage Price Futures Group. A monthly survey of OPEC producers by news agency Reuters suggested April output from the cartel was up 170,000 barrels a day month-on-month at 32.64 million barrels a day. Germany's Commerzbank said in a note that OPEC's April output could have been much higher without outages in Kuwait, the United Arab Emirates, Venezuela and Nigeria. The U.S. crude benchmark ended down 2.5% at $44.78 a barrel on the New York Mercantile Exchange. The global Brent contract finished down 3.3% at $45.83 a barrel on the ICE Futures Europe exchange. Meanwhile, analysts are beginning to warn of a growing glut of refined fuel products, with gasoline demand possibly falling short of expectations at a time when refineries are going to begin ramping up output for summer driving season. "We see evidence that refineries are running too hard relative to product demand," Morgan Stanley said in a note. "We increasingly see risks of product oversupply." London-based research consultancy Energy Aspects said many players are experiencing cash-flow issues with even global oil-field services giants Schlumberger Ltd. and Halliburton Co. recording operational losses. Halliburton said Sunday it would end its $35 billion takeover bid for Baker Hughes Inc. "Financial pressure is the current driver of production and it is the service companies whose revenues have been squeezed to unsustainable levels," the think tank said in a note. In refined product markets, gasoline futures fell 2.6% to $1.5628 a gallon, while diesel futures dropped 2.2% to $1.3555 a gallon. Write to Christian Berthelsen at christian.berthelsen@wsj.com and Kevin Baxter at Kevin.Baxter@wsj.com Credit: By Christian Berthelsen and Kevin Baxter
Subject: Crude oil prices; Petroleum refineries; Price increases; Supply & demand; Oil service industry
Location: United States--US
Company / organization: Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112; Name: Genscape Inc; NAICS: 511140, 518210; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785762114
Document URL: https: //login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785762114?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Baker Hughes Lays Out Cost Cuts, Buybacks After Halliburton Deal Dies; A day after merger with Halliburton is scrapped, oil-services company weighs its options
Author: Sider, Alison; Hufford, Austen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
Baker Hughes had struggled in some areas even before oil prices plunged, and is now re-entering the market at an even more difficult moment, with too many players and not enough work to go around, said Bill Herbert, an analyst with Piper Jaffray Cos. On Monday, Baker Hughes said it was "taking immediate steps" to remove costs it couldn't previously eliminate due to merger, and was also "evaluating broader structural changes" to further reduce expenses and improve efficiency.
Full text: Baker Hughes Inc. said Monday that it is working to emerge from its failed merger with Halliburton Co. as a leaner, more focused oil-field services company, outlining plans to cut $500 million in costs while buying back $1.5 billion of shares and $1 billion of debt. A day after announcing that its merger with Halliburton , once valued at nearly $35 billion, was being called off after regulators claimed it would hurt competition, Baker Hughes said it would use a $3.5 billion breakup fee it got from Halliburton to repair its balance sheet and restructure its business. Baker Hughes has been tethered to Halliburton since the deal to combine the second- and third-largest oil-field services businesses after Schlumberger Ltd. was announced in November of 2014. That has kept it from cutting costs and making other changes in response to the oil price rout that reduced demand for work drilling wells and pumping oil and natural gas. Now that it is on its own, Baker Hughes says it will focus on its strengths and simplify its business. "Innovation is what we do best and what our customers need the most," Chief Executive Martin Craighead said. The companies had been working for roughly a year and a half to get the complex deal completed, and had been planning potentially to sell billions in assets to appease regulators. But the Justice Department sued to block the merger last month , arguing that the deal would eliminate head-to-head competition in markets for nearly two dozen products and services used for U.S. oil exploration and production. Related * Heard on the Street: What Has Been Gained and Lost * Halliburton-Baker Hughes Call Off Merger (May 1) * Justice Department Files Lawsuit Challenging Halliburton-Baker Hughes Deal (April 6) * Halliburton-Baker Hughes Merger Under EU Antitrust Review (Jan. 12) On Monday following the merger's collapse, Deputy Assistant Attorney General David Gelfand said the deal was "not fixable." "We heard extreme statements of concern from dozens of companies and over 100 individuals," he said Monday during a conference call with reporters. European Union antitrust authorities, who had opened a full investigation into the proposed merger in January, also said Monday that the deal had raised competition concerns and said that several customers had expressed issues with the merger. Halliburton Chief Executive David Lesar said Sunday that the company still believed the merger would have benefited customers and shareholders of both companies. But amid regulatory challenges and "general industry conditions that severely damaged deal economics," calling it off was the best course, he said. Shares of Baker Hughes fell 2% Monday in New York trading to $47.39. Halliburton shares rose 1.8% to $42.07. Some antitrust analysts, and even Baker Hughes itself, raised concerns from the outset that regulators would block the deal. While most mergers continue to receive government approval, U.S. antitrust enforcers in the Obama administration have increasingly pushed back against transactions they believe raise significant threats to competition. Last year, the Justice Department challenged several major deals, including General Electric Co.'s planned sale of its appliance business to Electrolux AB and Comcast Corp.'s planned acquisition of Time Warner Cable Inc. Both these deals also were abandoned. Matt Marietta, an analyst at Stephens Inc., said the severity of the downturn made divestitures harder. And regulators proved more staunchly opposed than the company anticipated. "I think they just miscalculated how the Justice Department would respond to what they proposed," Mr. Marietta said. Michael Keeley, an antitrust lawyer with the firm Axinn Veltrop & Harkrider LLP, said some of the potential roadblocks would have been apparent early on. "Ultimately, it's up to the client whether they want to take the chance or not," he said. "Are they willing to risk it because they think the upside of completing the deal is worth it?" Citing its cash war chest, many oil-field services experts have suggested that Baker Hughes will be in a strong position to take advantage of a recovery as crude oil prices have started to tick back up toward $50 a barrel. But others noted that Baker Hughes will need to make up the ground it lost while the merger dragged on. Baker Hughes had struggled in some areas even before oil prices plunged, and is now re-entering the market at an even more difficult moment, with too many players and not enough work to go around, said Bill Herbert, an analyst with Piper Jaffray Cos. On Monday, Baker Hughes said it was "taking immediate steps" to remove costs it couldn't previously eliminate due to merger, and was also "evaluating broader structural changes" to further reduce expenses and improve efficiency. The company said it was assessing where it will provide its current full-service model and where it will scale back offerings. One business where Baker Hughes has struggled is fracking, which involves injecting water and other materials into a well to break apart rock formations to release oil and gas. Analysts have said the company stumbled as it tried to integrate BJ Services, a fracking firm it acquired in 2010, and has struggled to master the logistical challenges. Baker Hughes said Monday that it would "retain a selective footprint" in the U.S. onshore pressure pumping business as it cited overcapacity, commoditized pricing and low barriers to entry. It also said it intends to refinance its $2.5 billion credit facility, which expires in September. Analysts said the collapse of the merger could spark a new round of deal making and reshuffling among oil-field services companies, which are grappling with the deep cuts being made by exploration and production companies. "There's clearly an appetite for acquisitions right now," said Richard Spears, vice president of the oil field consulting firm Spears & Associates. Write to Alison Sider at alison.sider@wsj.com and Austen Hufford at austen.hufford@wsj.com Credit: By Alison Sider and Austen Hufford
Subject: Oil service industry; Litigation; Antitrust; Competition; Crude oil prices
People: Lesar, David Craighead, Martin
Company / organization: Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785762156
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785762156?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi Binladin Group Lays Off 50,000 as Low Oil Prices Bite; Saudi Arabian company cuts a quarter of its workforce, mostly construction-site workers from Asia
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
The Saudi Ministry of Labor wasn't immediately available to comment. Besides reducing the head count by a quarter, the company will also look at streamlining its operations and boosting its efficiency, the person said, declining to be more specific.
Full text: DUBAI--Saudi Binladin Group laid off 50,000 people, according to a person briefed on the plans, as the construction giant attempts to turn around a business hammered by low oil prices. The scale of the retrenchment means the Jeddah, Saudi Arabia-based conglomerate cut nearly a quarter from its workforce of about 200,000. The people who were laid off, mostly construction-site workers from Asia, have been paid their outstanding salary and dues, according to the person familiar with the situation. "The people laid off are not thrown in the street without pay," this person said. "The Saudi Binladin Group is extremely careful in honoring its commitments." A spokesman for the Saudi Binladin Group, or SBG, confirmed the layoffs but declined to be more specific. He said the employees who were dismissed would receive full compensation and other entitlements. "Adjusting the size of our manpower is a normal routine especially whenever projects are completed or near completion," said the spokesman for SBG. "Most of the released jobs had initially been recruited for contracted projects with specific time frame and deliverables," he added. In the oil-rich nation's boom years, Saudi Binladin flourished as one of the government's preferred builders, tasked with multibillion-dollar projects, such as in the holy cities of Mecca and Medina. But as governments across the oil-rich Persian Gulf, including Saudi Arabia, have slashed spending on large-scale projects to plug their widening budget deficits caused by the drop in crude prices. For the past half year, SBG has been grappling with the strained finances of its biggest client, the Saudi Arabian government, and the fallout of a deadly crane acciden t in the city of Mecca last year. That situation has left the construction conglomerate buried under billions of dollars of debt, bankers and financial advisers familiar with the matter said. The Persian Gulf's biggest construction firm has already defaulted on an unspecified number of debt repayments and been unable to pay a number of subcontractors and suppliers, bankers familiar with the company's finances previously said. Creditors and advisers to SBG have said that one of the main reasons behind the company's financial woes stem from the Saudi government's failure to pay for completed or ongoing construction work. SBG in recent years has completed work on multiple multibillion-dollar government projects, including hospitals, universities, highways and the extension of the holy mosque in Mecca. "There are many projects where payments haven't happened or where there has been a delay in paying the laborers," said the person familiar with knowledge of SBG's plans. "Some of these projects are coming to an end or running slow, so as a company you adjust and reduce the fixed costs among other things," the person said. The Saudi Ministry of Labor wasn't immediately available to comment. Besides reducing the head count by a quarter, the company will also look at streamlining its operations and boosting its efficiency, the person said, declining to be more specific. Most recently, SBG recruited a Morgan Stanley banker as its new chief financial officer, as well as an executive from Kuwait contractor Kharafi National to join its management. The job cuts, which were first reported by Saudi media, coincided with riots in Mecca during the weekend. Pictures and footage circulating on social media, which couldn't be independently verified, showed protesters setting buses on fire. A spokesman for the Mecca Civil Defense confirmed they had to extinguish fire in seven buses and that an investigation was under way. He declined to say whether the protesters belonged to the Binladin Group. Demonstrations in Saudi Arabia are rare. But the group's financial trouble has sparked previous bouts of labor unrest. In February, hundreds of Binladin workers took the streets to demand unpaid wages. Saudi Binladin was founded 85 years ago by the father of the late al Qaeda leader Osama bin Laden. The company enjoyed close ties with the Saudi leadership, but those relations have been strained after a crane collapsed at the Grand Mosque in Mecca, killing over a hundred people. The firm was then barred from taking on new government projects. Ahmed Al Omran contributed to this article. Write to Nicolas Parasie at nicolas.parasie@wsj.com Corrections & Amplifications: An earlier version of this article misspelled the holy city of Medina as Media. (May 2, 2016) Credit: By Nicolas Parasie
Subject: Layoffs; Wages & salaries; Construction
Location: Asia Saudi Arabia Persian Gulf
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785762243
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785762243?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduc tion or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Diamond Offshore, Helmerich Revenue Declines Not as Bad as Feared; A prolonged commodities downturn has led oil producers to rein in spending and cut costs
Author: Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
Contract drillers Diamond Offshore Drilling Inc. and Helmerich & Payne Inc. each reported sharp revenue declines for their latest quarters, although not as bad as analysts had feared.
Full text: Contract drillers Diamond Offshore Drilling Inc. and Helmerich & Payne Inc. each reported sharp revenue declines for their latest quarters, although not as bad as analysts had feared. However, Helmerich & Payne shares fell 5.3% to $62.61 in morning trading in New York as the company's adjusted per-share loss was wider than expected. Meanwhile, shares of Diamond Offshore rose 1.2% to $24.55 as its per-share earnings beat Wall Street estimates. The oil-field-services sector has continued to get hit by weak demand as a prolonged commodities downturn has led oil producers to rein in spending and cut costs. "These are demanding times in the energy service space, and the challenge for many is now one of survival," Helmerich & Payne Chief Executive John Lindsay said. "The U.S. land rig count is comparable to the all-time record lows reached in 1999." Mr. Lindsay said the company expects drilling activity will deteriorate further in the current quarter as customers continue to reduce spending. However, he also said Helmerich & Payne's long-term contracts have helped it remain profitable. For it fiscal second quarter ended March 31, Helmerich & Payne reported a profit of $21.2 million, or 19 cents a share, down from $153.5 million, or $1.41 a share, a year earlier. The latest period included net gains of 47 cents a share, while the year-earlier period included net gains of 40 cents a share. Revenue slumped 51% to $438.2 million amid broad declines across its U.S. land drilling, international land drilling and offshore drilling businesses. Analysts polled by Thomson Reuters expected a per-share loss of 18 cents and revenue of $398.3 million. Diamond Offshore Chief Executive Marc Edwards said that he was pleased with his company's solid results for the latest quarter, which he said demonstrate Diamond Offshore's continuing efforts to manage costs. He also touted the company's fleetwide operational efficiency rate of 98.2% during the quarter, which compared with 91.2% a year earlier. Over all, Diamond Offshore reported a first-quarter profit of $87 million, or 64 cents a share, compared with a year-earlier loss of $255.7 million, or $1.86 a share, a year earlier. Revenue decreased 24% to $470.5 million. Analysts polled by Thomson Reuters expected per-share profit of 27 cents and revenue of $412.1 million. Write to Tess Stynes at tess.stynes@wsj.com Credit: By Tess Stynes
Subject: Offshore drilling; Financial performance; Earnings
Location: United States--US New York
Company / organization: Name: Diamond Offshore Drilling Inc; NAICS: 213112; Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785766536
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785766536?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Halliburton-Baker Hughes Deal: What Has Been Gained and Lost; The failure of a merger between oil-field-service rivals Halliburton and Baker Hughes is less disastrous for both companies than it seems
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
[...]Baker Hughes has allowed potential investment opportunities in a distressed industry to pass it by.
Full text: If there is one economic concept an oil man intuitively grasps, it is sunk costs. Just as Halliburton boss David Lesar would advise clients to walk away from a likely dry hole rather than pour good money after bad, he pushed only as hard as was prudent for a merger with rival Baker Hughes, a deal that ultimately fell apart. The result: This week he will be writing that company a $3.5 billion check. The stock market doesn't seem to mind. On a weak day for oil-field-service stocks, shares of both Halliburton, the intended acquirer, and Baker Hughes, the target, initially rose. The fact that Halliburton finished higher reflects that investors long ago assigned scant odds to a successful deal. That was due to given regulatory objections on both sides of the Atlantic. Halliburton has the cash and, while the fee stings, it isn't facing distress. Its shares actually did far better than the recipient of its huge check. Meanwhile, Baker Hughes awaits a sum equal to about 16% of its market value, but the failed merger took a hefty toll on it. That highlights another economic concept: Opportunity costs matter as much as direct ones . During its first-quarter results last week, the company said it was carrying $110 million of costs during the period that it might have shed if not for the anticipated deal. It also incurred $306 million in after-tax merger-related expenses in 2015 and the first quarter of 2016. Finally, Baker Hughes has allowed potential investment opportunities in a distressed industry to pass it by. The $2.5 billion or so in after-tax value it will realize from the break fee it will get from Halliburton shouldn't really be seen as an outright windfall, then. Granted, it does help. Rather than a complicated cost-benefit analysis, the stock market's verdict on the failed merger's impact on Baker Hughes shareholders is telling. The stock is just 7% lower than just before the deal's announcement in November 2014. An exchange-traded fund tracking the sector has shed 32% of its value since then. Baker Hughes wasted no time in telling investors how it would deploy the cash after paying Uncle Sam: $1.5 billion in share buybacks and $1 billion in debt reduction. It might have been able to buy a smaller competitor such as an offshore driller with little overlap and few regulatory complications. Instead, it is putting its cash into something it knows best: Itself. Investors seeking one of the few companies in the industry with fat left to trim and a healthy balance sheet could do worse than to follow management's lead. Credit: By Spencer Jakab
Subject: Oil service industry; Acquisitions & mergers; Costs; Securities markets
People: Lesar, David
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785770663
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785770663?accountid=7117
Copyright: (c) 2016 Dow Jones & Com pany, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Lenders in U.S. Tighten Standards on Loans to Oil and Gas Businesses; Most domestic and foreign banks expect delinquency and charge-off rates on loans to firms in the sector to worsen
Author: Sparshott, Jeffrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
According to the Fed survey, most domestic and foreign banks expect delinquency and charge-off rates on loans to firms in the oil and natural gas drilling or extraction sector to deteriorate over the remainder of 2016.
Full text: Lenders in the U.S. tightened standards and restructured loans for businesses in the oil and gas sector in the opening months of the year amid slumping natural resource prices, according to a Federal Reserve survey of senior loan officers. Crude oil prices only recently have shown signs of firming after an extended slump. A revival in prices, if it lasts, may be too late for many firms. According to the Fed survey, most domestic and foreign banks expect delinquency and charge-off rates on loans to firms in the oil and natural gas drilling or extraction sector to deteriorate over the remainder of 2016. "A significant percentage of banks also reported enforcing material adverse change clauses or other covenants to limit draws on existing credit lines to firms in this sector, tightening lending policies on new loans or lines of credit to firms in other sectors, and hedging the risks arising from declines in energy prices through derivatives contracts," the survey said. Most domestic banks said loans to oil and gas firms account for less than 5% of their outstanding commercial and industrial loans. The majority of foreign banks said such loans account for more than 5%. More broadly, lenders tightened standards on loans to all businesses in the opening months of 2016, according to the Fed survey. Banks reported a tighter lending standards for commercial and industrial loans amid weaker demand from firms. Standards also tightened for commercial construction and land development loans as demand strengthened. Related Coverage * Laid-Off Oil Workers Struggle to Pay Loans, Credit Cards * Banks Start to Reveal Impact of Energy on Earnings * Banks Build Rainy-Day Funds Because of Energy Slump * Wells Fargo Profit Drops as Energy Pain Spreads Loan standards eased for consumers. Banks were more willing to issue mortgages and consumer installment loans such as credit cards. Auto loan standards were unchanged. Demand for mortgages and other consumer loans strengthened. The Fed's policy committee raised the central bank's benchmark interest rate in December for the first time in nearly a decade. But officials haven't budged since, citing uncertainty caused by financial market tumult and slower economic growth. While they initially expected to raise interest rates by a full percentage point this year, officials have since downgraded their expectations to just half a percentage point. Write to Jeffrey Sparshott at jeffrey.sparshott@wsj.com Credit: By Jeffrey Sparshott
Subject: Banking industry; Standards; Interest rates; Loans; Natural gas; Lines of credit; Crude oil prices
Location: United States--US
Company / organization: Name: Wells Fargo & Co; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785782504
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785782504?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Banks Dodge One Oil-Patch Risk; In an encouraging sign for banks, oil companies took limited drawdowns of open lines of credit in the first quarter
Author: Back, Aaron
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
At the four big, U.S. banks--J.P. Morgan Chase, Bank of America, Citigroup and Wells Fargo--unfunded exposure at the end of last year was actually bigger than total funded exposure, at $117 billion.
Full text: Banks have provided further evidence that they are weathering the oil-price bust so far. Going into first-quarter earnings season, one of the biggest worries hanging over banks had to do with their "unfunded" energy exposures . These are lines of credit to oil-and-gas companies that haven't yet been tapped. At the four big, U.S. banks--J.P. Morgan Chase, Bank of America, Citigroup and Wells Fargo--unfunded exposure at the end of last year was actually bigger than total funded exposure, at $117 billion. The risk was that as companies in the oil patch hit trouble, they would rush to draw on their lines of credit. That could expose banks to far greater losses. The bad news for banks is that some drawdowns did indeed occur in the first quarter. The good news is that they were limited. Take J.P. Morgan, which on Friday filed its quarterly report with the Securities and Exchange Commission. Its funded energy exposure rose by 6.5% from the end of last year to March, hitting $15.3 billion. But this still represents just 1.8% of total loans, manageable for the bank. At the big four, funded exposure rose by an average of 4.7% sequentially in the first quarter. The biggest jump was at Citi, which saw a 7.2% increase. It could have been much worse, given the confluence of factors driving drawdowns in the first quarter. Oil prices sank below $30 a barrel in February. And oil companies had reason to expect their credit lines would be cut during the spring redetermination season, when banks reassess the value of the companies' collateral . That provided a powerful incentive to tap credit lines while they were still available. If big drawdowns were to occur, 2016's first quarter would likely have been the time for it. That they didn't is good news for banks. Credit: By Aaron Back
Subject: Acquisitions & mergers; Lines of credit; Natural gas utilities; Banking industry
Location: United States--US
Company / organization: Name: Securities & Exchange Commission; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785782508
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785782508?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Anadarko's Loss Narrows on Cost Cuts; Oil and gas producer improved its cost structure by $800 million by reducing its dividend and staffing
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
Anadarko Petroleum Corp. on Monday posted weaker-than-expected sales for its latest quarter as the rout in the oil sector continued, though its quarterly loss wasn't as bad as analysts had forecast.
Full text: Anadarko Petroleum Corp. on Monday posted weaker-than-expected sales for its latest quarter as the rout in the oil sector continued, though its quarterly loss wasn't as bad as analysts had forecast. Shares of Anadarko, down about 45% in the past year, fell 2.8% to $50.50 in after-hours trading. The company, one of the largest independent oil and gas producers in the U.S., along with the broader sector, has been pressured by collapsing energy prices . Some analysts expect oil prices to hover between $20 and $40 a barrel until the second half of the year, with crude prices remaining highly volatile. The company, like many energy-related firms, has worked to cut costs amid the downturn. On Monday, Anadarko said it improved its cost structure by $800 million by reducing its dividend and staffing. Total costs and expenses plunged 61% to $2.54 billion. For the latest quarter, Anadarko posted a loss of $1.03 billion, or $2.03 a share, compared with a loss of $3.26 billion, or $6.45 a share, a year earlier . Excluding certain items, the company posted a loss of $1.12 a share, compared with a year-earlier loss of 72 cents a share. Revenue fell 28% to $1.67 billion. Analysts polled by Thomson Reuters expected a loss of $1.16 on revenue of $1.81 billion. Write to Ezequiel Minaya at ezequiel.minaya@wsj.com Credit: By Ezequiel Minaya
Subject: Financial performance; Losses
Location: United States--US
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Anadarko Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785846485
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785846485?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Statoil Sells Marcellus Assets to EQT for $407 Million; Sale consists of 62,500 acres with production of about 9,300 barrels of oil equivalent a day
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
The current natural gas production in the acquired area was about 50 million cubic feet a day, and its resource potential was estimated at 9.2 trillion cubic feet, EQT said.
Full text: Statoil ASA said it has agreed to sell some of its assets in the Marcellus Shale formation in West Virginia to EQT Corp. for $407 million in cash. The Norwegian oil and gas producer said Monday the divestment includes 62,500 acres of operated properties in West Virginia with a production of about 9,300 barrels of oil equivalent a day in the first quarter. Statoil said it would retain its operated properties in the state of Ohio and its non-operated Marcellus positions. The company entered Marcellus and the U.S. shale industry through a 2008 joint venture with Chesapeake Energy Corp. and in 2012 became an operator in the area through the acquisition of additional acreage in a liquids-rich part of the formation. EQT said the acquired assets, primarily located in West Virginia's Wetzel, Tyler and Harrison counties, would add a sizable amount of acreage within the company's core development area and complement its adjacent operations in Wetzel County. The acquisition would boost EQT's core undeveloped Marcellus acreage by 29%, it said. The current natural gas production in the acquired area was about 50 million cubic feet a day, and its resource potential was estimated at 9.2 trillion cubic feet, EQT said. Statoil said it expected the transaction to close in July, subject to certain conditions being met. It didn't specify which conditions. Statoil in 2014 divested parts of its non-operated assets in the southern Marcellus to Southwestern Energy for $394 million. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Exploration & development expenses; Acquisitions & mergers
Location: United States--US Ohio West Virginia
Company / organization: Name: Chesapeake Energy Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785846540
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785846540?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Companies Ultra Petroleum, Midstates File for Bankruptcy; Companies join other oil and gas companies experiencing financial distress
Author: Rizzo, Lillian; Gleason, Stephanie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 May 2016: n/a.
Abstract:
Ultra, which has some $3.8 billion in debt--all of it unsecured--filed for bankruptcy Friday after failing to reach a debt-restructuring deal with its lenders and bondholders, according to an affidavit filed by Chief Financial Officer Garland R. Shaw.
Full text: Two more publicly traded oil and natural gas companies, with combined debts of more than $5.8 billion, filed for chapter 11 bankruptcy protection in Texas as the industry continues to suffer amid stubbornly low prices. Houston's Ultra Petroleum Corp. and Oklahoma-based Midstates Petroleum Co. separately filed for court protection in U.S. Bankruptcy Court in Houston. Ultra, which has some $3.8 billion in debt--all of it unsecured--filed for bankruptcy Friday after failing to reach a debt-restructuring deal with its lenders and bondholders, according to an affidavit filed by Chief Financial Officer Garland R. Shaw. Like many of its peers, a heavy debt load and falling commodities prices pushed Ultra into bankruptcy protection, Mr. Shaw said. While the bulk of Ultra's bonds were issued "under favorable and supportive market conditions," the collapse in oil and gas prices since late 2014 made the debt load too much to bear for the oil and gas company, he said. Ultra, with 159 full-time employees, operates mainly in Wyoming's Pinedale Field, which produces natural gas. The company also owns properties in Utah, which produce primarily crude oil, and Pennsylvania, which produce natural gas. Midstates, meanwhile, filed for bankruptcy Saturday after reaching a preliminary deal with its lenders and bondholders on the terms of a $2 billion debt-for-equity swap. The company plans to reduce its funded debt load 90% by handing more than 96% ownership of the company to junior bondholders owed $625 million, in exchange for forgiveness of that debt. That group of junior bondholders also will be entitled to as much as $60 million in cash. Lenders owed $249.2 million are being paid $82 million in cash and have agreed to provide a $170 million exit facility to Midstates. Lower ranking debtholders are slated to have their debts wiped away and be paid with the remaining small equity stakes. The agreement already has broad support from these creditor groups. Midstates was founded in 1993 as an onshore Gulf Coast driller and now focuses on hydraulic fracturing of natural gas formations. Leading up to its bankruptcy filing, Midstates attempted to increase liquidity with fresh debt offerings and bond exchanges, but it wasn't enough to allow the company to weather these commodity prices. Last month, Midstates skipped a payment to its bondholders, triggering negotiations with its lenders and bondholders that resulted in its bankruptcy filing. Both companies, in court filings, pointed to persistently low commodity prices as the reason for their financial woes. Natural gas prices have been depressed for years and prices for crude have undergone a similarly steep decline, according to Nelson M. Haight, Midstates' financial chief. Although benchmark U.S. oil prices have rebounded to around $46 a barrel since hitting a 13-year low in February, they're still well below the $100 per barrel producers were getting as recently as the summer of 2014. Midstates and Ultra join a host of other oil and gas companies experiencing financial distress. Many have already filed for bankruptcy , and more are expected to this year. Sixty-seven oil and gas exploration and production companies filed bankruptcy proceedings last year, a 380% increase from 2014, according to consulting firm Gavin/Solmonese. Patrick Fitzgerald contributed to this article. Write to Lillian Rizzo at Lillian.Rizzo@wsj.com and Stephanie Gleason at stephanie.gleason@wsj.com Credit: By Lillian Rizzo and Stephanie Gleason
Subject: Bankruptcy reorganization; Bankruptcy; Energy economics; Natural gas prices
Location: Texas
Company / organization: Name: Ultra Petroleum Corp; NAICS: 211111; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 2, 2016
Section: ABC
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785846575
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785846575?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dai's Take: One Firm Addresses Low Oil Prices By 'Doubling Down'
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
Mr. Ayres said he expects the strategy, which is focused on the Permian basin, to yield a 20% internal rate of return on an unlevered basis with oil trading at $40 a barrel.
Full text: Welcome to the new WSJ Pro PE Check out our new website, http://www.wsj.com.ezproxy.uta.edu/pro/privateequity , for data, infographics and a 10-year archive of stories. One Firm Addresses Low Oil Prices By 'Doubling Down' Investors in the oil patch aren't out of the woods yet, despite a recent rally in crude prices. Last Friday alone, two more energy companies filed for bankruptcy, Ultra Petroleum Corp. and Midstates Petroleum Co. Inc. Both companies are publicly traded, and Midstates counts First Reserve Corp. and Riverstone Holdings among its largest shareholders. However, one energy investor remains undeterred by the gloomy statistics. During our inaugural WSJ Pro Private Equity event on Friday, Charlie Ayres, chairman of Trilantic North America, said that his firm plans to "double down" on energy deals. "Our view is that $35 oil is not sustainable in the world in a middle-term equilibrium here," said Mr. Ayres. "Can it go back down to touch $27? Absolutely, but you will have no American oil and gas...if you [had] two years of $30 oil." One approach Trilantic has taken is to invest "at the well level," buying working interests ranging from 15% to 20% in oil and gas wells on a non-operating basis. Mr. Ayres said he expects the strategy, which is focused on the Permian basin, to yield a 20% internal rate of return on an unlevered basis with oil trading at $40 a barrel. Trilantic also made a separate, natural-gas investment in the Haynesville shale, a carbon-rich rock formation that underlies parts of southwestern Arkansas, northwest Louisiana, and eastern Texas. Mr. Ayres didn't discuss details of that investment. Trilantic, which traces its roots to Lehman Brothers' merchant banking arm, has plenty of capital for energy deals. In addition to a $2.2 billion main buyout fund closed in 2013, Trilantic also manages a $388 million energy-focused fund. All told, the firm has more than $1 billion of capital available to invest in the sector. Trilantic recently beefed up its industry expertise by forming an energy advisory board. However, the firm's new investments aren't without risk. Some firms that moved early into energy to take advantage of the distress got burned. Others levered their deals with too much debt now find certain portfolio companies facing liquidity constraints. Trilantic's Mr. Ayres said his firm isn't timing the market. "We're not in the distress game...That's not what we do," he said. When the firm buys oil and gas assets, it uses little to no debt, according to Mr. Ayres. "We're not levering this play at all," he said. "You're going to be able to weather any storm, because there is no one knocking on your door saying, 'I'm going to take the keys from you.'" Write to Shasha Dai at shasha.dai@wsj.com. TUESDAY, MAY 3 -- Kentucky Retirement Systems WEDNESDAY, MAY 4 -- Kern County Employees' Retirement Association THURSDAY, MAY 5 -- San Bernardino County Employees Retirement Association Send us your tips, suggestions and feedback. Write to: Yolanda Bobeldijk; Laura Cooper ; Chris Cumming ; Shasha Dai ; Braden Kelner ; Laura Kreutzer ; Dawn Lim ; William Louch ; Mike Lucas ; Amy Or ; Becky Pritchard ; David Smagalla ; Chitra Vemuri . Follow us on Twitter: @YEBobeldijk , @LCooperReports , @ShashaDai1 , @bradenkelner , @LauraKreutzer , @dawnlim , @william_louch , @Lucastoons , @beckspritchard , @DSmagall_DJ
Subject: Natural gas; Energy industry
Company / organization: Name: First Reserve Corp; NAICS: 523920; Name: Ultra Petroleum Corp; NAICS: 211111; Name: Lehman Brothers Holdings Inc; NAICS: 523110, 551112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785855920
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785855920?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Futures Stabilize in Asia Trading in Wake of Rout; July Brent crude rose 25 cents to $46.08 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
Gasoline demand in the U.S. has been on the rise as prices have declined, and "that increased demand brings hope that the U.S. economic recovery will light up in the summer months along with the U.S. driving season," Mr. Ive said.
Full text: Crude-oil futures edged higher in Asian trading hours Tuesday, stabilizing following their biggest drop in weeks. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $45.06 a barrel, up 28 cents, or 0.6%, in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose 25 cents to $46.08 a barrel. The gains follow a steep drop in oil prices during the U.S. session, which saw Brent crude tumble 3.3%, its biggest slide in percentage terms since April 1. Data showing a rise in U.S. oil stockpiles and firming production among the Organization of the Petroleum Exporting Countries touched off the losses. A sliding dollar lent some stability to prices in Asian trading, though the recent upward trend remained in place, said Stuart Ive, private client manager at OM Financial in New Zealand. "The weak U.S. dollar is probably helping to keep prices somewhat elevated--that adds to the mix for sure," he said. "The overall trend in the market remains upward for the time being." The WSJ Dollar Index, which tracks the greenback against a basket of foreign currencies, lost 0.1% recently. A weaker dollar tends to lift oil prices by making the dollar-denominated commodity cheaper for buyers in other currencies. The weakening dollar has lent stability to the oil market in recent weeks. The WSJ Dollar Index has lost more than 6% this year. At the same time, Brent crude has advanced more than 20% in that time, helped by the weaker greenback, production outages at OPEC countries and a pullback in U.S. output. Analysts say prices could continue to climb as the U.S. summer driving season gets underway. Gasoline demand in the U.S. has been on the rise as prices have declined, and "that increased demand brings hope that the U.S. economic recovery will light up in the summer months along with the U.S. driving season," Mr. Ive said. In refined-product markets, Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 59 points to $1.5569 a gallon, while June diesel traded at $1.3614 a gallon, 59 points higher. ICE gasoil for May changed hands at $404.75 a metric ton, down $5.50 from Monday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Crude oil; Crude oil prices; Price increases
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785858339
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785858339?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Anadarko Petroleum Is the Latest to Feel the Bite of Oil-Market Rout
Author: Minaya, Ezequiel
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 May 2016: B.2.
Abstract:
Anadarko Petroleum Corp. on Monday posted weaker-than-expected sales for its latest quarter as the rout in the oil sector continued, though its quarterly loss wasn't as big as analysts had forecast.
Full text: Anadarko Petroleum Corp. on Monday posted weaker-than-expected sales for its latest quarter as the rout in the oil sector continued, though its quarterly loss wasn't as big as analysts had forecast. Anadarko shares, down about 45% in the past year, fell 1.3% to $51.25 in after-hours trading. The company, like many energy-related firms, has worked to cut costs amid the downturn. On Monday, Anadarko said it improved its cost structure by $800 million as it reduced its dividend and staffing. Total costs and expenses plunged 61% to $2.54 billion. For the latest quarter, Anadarko posted a loss of $1.03 billion, or $2.03 a share, compared with a loss of $3.26 billion, or $6.45 a share, a year earlier. Excluding certain items, the company posted a loss of $1.12 a share, compared with a year-earlier loss of 72 cents a share. Revenue fell 28% to $1.67 billion. Analysts polled by Thomson Reuters expected a loss of $1.16 on revenue of $1.81 billion. Credit: By Ezequiel Minaya
Subject: Financial performance; Losses
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Anadarko Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: May 3, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785928043
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785928043?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
IMF Sees Sub-Saharan Africa Growth at 16-Year Low; Record low oil and mineral prices weigh on region's major economies
Author: Stevis, Matina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
NAIROBI, Kenya--sub-Saharan African economies will grow at the slowest pace in 16 years and lower than the global average this year, reversing a trend that saw the region elevated to one of the fastest-expanding global frontiers in previous years, the International Monetary Fund said Tuesday.
Full text: NAIROBI, Kenya--sub-Saharan African economies will grow at the slowest pace in 16 years and lower than the global average this year, reversing a trend that saw the region elevated to one of the fastest-expanding global frontiers in previous years, the International Monetary Fund said Tuesday. The region will grow on average by 3% in 2016, below the 3.2% global average, extending diminished growth of 3.4% in 2015, as several of the continent's major economies struggle because of record low oil and mineral prices. The Fund dramatically slashed its 2016 forecast since its last report in October by 1.3 percentage points, as the slowdown in some of Africa's major economies is taking a deeper toll than previously anticipated. The IMF, in its twice-yearly Regional Economic Monitor for sub-Saharan Africa, issued its starkest warning yet to Africa's major oil exporters to radically change policies if they are to soon return to their strong growth trajectories. It said policies in oil exporters, among them the biggest economy on the continent, Nigeria, have so far been disappointing and have compounded the troubles caused by diminished trade and government revenue as a result of cheap oil. "For natural resource exporters, a robust and prompt policy response is needed given the prospect of an extended period of sharply lower commodity prices," the Washington, D.C.-based institution said. "To date, the policy response--particularly among oil exporters--to a terms-of-trade decline of historic magnitude has to a large extent been hesitant and insufficient," it added. The deteriorating trajectory for Nigeria, South Africa and a few other key African economies was starkly on display in the Fund's newest forecasts. Nigeria will grow by 2.3% this year, it said, slashing its earlier forecast by two full percentage points. South Africa, the continent's most advanced economy and second-largest, will slow down to a near halt this year at 0.6%, the Fund said; it had predicted slightly better performance in October. China's diminished demand for Africa' minerals has dramatically altered the trade balance between the two, with a major surplus for Africa swinging to a deficit. African exports to China, the region's biggest trade partner and source of investment, have declined sharply, whereas Chinese exports to Africa have lowered more moderately, exacerbating the reversal of the trade balance. "These trends are likely to remain a drag on growth over the medium term," the IMF predicted, although it said that overall Africa' medium-term growth prospects were "robust." Still, the IMF recorded the better performance of some oil importers such as Ivory Coast, which is set to grow by 7.6%. Kenya, East Africa's biggest economy and an important building block of the African economic ascent story, will grow less than previously anticipated but still, at 6% this year, at a very healthy pace. Write to Matina Stevis at matina.stevis@wsj.com Credit: By Matina Stevis
Subject: Supply & demand; Exports; International trade
Location: Kenya Nigeria South Africa
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspa pers
Language of publication: English
Document type: News
ProQuest document ID: 1785929339
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785929339?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Stocks Fall on Global Growth Fears; Declines follow a renewed fall in oil prices and a drop in Chinese manufacturing
Author: Driebusch, Corrie; Gold, Riva
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
"The market was appropriately conservative going into the quarter, but fortunately companies have been able to beat estimates," said John Bailer, portfolio manager at the Boston Company Asset Management. In the Markets * Oil Prices Slide on Increased OPEC Output * Dollar Reverses Losses as Oil Sinks, Jobs Loom * U.S. Government Bonds Higher * Gold Prices Lower * Australia, China Stock Markets Climb Write to Corrie Driebusch at corrie.driebusch@wsj.com and Riva Gold at riva.gold@wsj.\n
Full text: U.S. stocks fell Tuesday, wiping out Monday's gains in another sign that the nearly three-month rally could be on shaky ground. Major U.S. stock indexes have fallen three of the past four trading days, and the price of U.S. crude oil has declined for three consecutive sessions, losing more than 5% in that period. All S&P 500 sectors fell Tuesday. The index had bounced back quickly after losing 11% in the first roughly six weeks of the year. But gains have tapered off and investors have become wary, meaning any cracks in global economic growth can spur a pullback, analysts said. Tuesday's declines followed the fall in oil prices, a drop in Chinese manufacturing and a forecast that growth in Europe this year will be weaker than previously expected. "Our clients are very edgy, they're nervous. The market drops like a rock into mid-February and then rallies from there, two very quick moves in a short time," said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute. The Dow Jones Industrial Average lost 140.25 points, or 0.8%, to 17750.91. The S&P 500 fell 18.06 points, or 0.9%, to 2063.37, and the Nasdaq Composite dropped 54.37 points, or 1.1%, to 4763.22. Today's Highlights * The Hottest Metric in Finance: ROIC * Heard on the Street: What Will Make Apple's Stock Tick Again * Valeant, SunEdison: Is the Whole Stock Market Engaged in Unsustainable Financial Engineering? U.S.-traded crude fell 2.5% to $43.65 a barrel, weighing on energy stocks. Among the biggest decliners in the sector were Chesapeake Energy, which fell 79 cents, or 12%, to $5.80 and Marathon Oil, which dropped 76 cents, or 5.6%, to 12.79. The yield on the 10-year U.S. Treasury note fell to 1.800% from 1.865% on Monday. Yields have fallen four of the past five sessions as prices rose. "Nothing is adding confidence to the health of the global economy," said Kenny Polcari, director at brokerage O'Neil Securities. He added Tuesday's selling in the stock market represented a breather as shares have approached records. On Monday, U.S. stocks posted their biggest one-day advance in more than two weeks , putting the Dow industrials and the S&P 500 within 2.3% of their highest levels hit last May. "There's no real reason at the moment for the market to be making new highs," Mr. Polcari said. Indeed, questions remain about the endurance of the stock-market recovery. Last week a reading of first-quarter growth for the U.S. economy missed expectations. Corporate earnings have been lackluster. With more than 70% of companies in the S&P 500 reporting, corporate earnings are on track to fall 7.3% in the first quarter, according to FactSet. Projections show second-quarter earnings are also set to contract. On Tuesday, Halliburton's quarterly loss widened , sending shares down 1.61, or 3.8%, to 40.44. Quarterly results from Pfizer and CVS Health came in above forecasts . Shares of Pfizer gained 90 cents, or 2.7%, to 33.70, and CVS shares gained 2.47, or 2.4%, to 103.92. Apple shares gained 1.54, or 1.6%, to 95.18, snapping an eight-session losing streak, the iPhone-maker's longest since July 1998. "The market was appropriately conservative going into the quarter, but fortunately companies have been able to beat estimates," said John Bailer, portfolio manager at the Boston Company Asset Management. "What we need is earnings growth and earnings surprises," he said. Copper prices fell sharply after a private gauge of Chinese manufacturing showed a decline in April, adding to concerns over the health of the world's second-largest economy. The European Commission said Tuesday that growth in the eurozone and the wider European Union will be slightly weaker this year than previously forecast, citing the economic slowdown in China as well as geopolitical tensions and uncertainty. The Stoxx Europe 600 declined 1.7%. Mixed first-quarter earnings results weighed on shares of European banks. Shares in UBS fell 7.5% after the Swiss lender reported a sharp fall in first-quarter profit, while Germany's Commerzbank declined 9.6% after it missed consensus estimates and reduced its profit outlook for the full year. Shares in Hong Kong fell 1.9%. The Shanghai Composite Index gained 1.8% as the market reopened after a holiday , spurred by President Xi Jinping's recently stated support for the "healthy development" of the country's stock markets. Australia's S&P ASX 200 gained 2.1% after the country's central bank cut interest rates for the first time in a year. The Australian dollar fell sharply, weakening 2.3% against the dollar to $0.7488. Markets in Japan were closed for a holiday. In the Markets * Oil Prices Slide on Increased OPEC Output * Dollar Reverses Losses as Oil Sinks, Jobs Loom * U.S. Government Bonds Higher * Gold Prices Lower * Australia, China Stock Markets Climb Write to Corrie Driebusch at corrie.driebusch@wsj.com and Riva Gold at riva.gold@wsj.com Credit: By Corrie Driebusch and Riva Gold
Subject: Profits; Earnings; Financial performance; Securities markets; Dow Jones averages; Stock exchanges; Prices; Economic conditions
Location: United States--US
Company / organization: Name: Pfizer Inc; NAICS: 339113, 325412; Name: Marathon Oil Corp; NAICS: 486110, 324110, 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785945370
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785945370?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. News: Factories Steady as Oil, Dollar Hurdles Fade
Author: Leubsdorf, Ben
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 May 2016: A.2.
Abstract:
Oil prices have moved higher in recent months and the dollar has weakened against other major currencies as Federal Reserve policy makers signaled a willingness to move slowly on raising short-term interest rates, potentially offering some relief for American manufacturers.
Full text: The battered U.S. factory sector has stabilized, though it remains far from full health. The Institute for Supply Management on Monday said its index of manufacturing activity fell to 50.8 in April from 51.8 in March. For a second straight month, however, the measure remained above 50, the threshold that divides expansion from contraction. Before rebounding over the past few months, the factory sector was beset by low oil prices that squeezed the domestic energy sector while a strong dollar and weakness overseas depressed demand for U.S. exports. Now, the clouds seem to be lifting. Oil prices have moved higher in recent months and the dollar has weakened against other major currencies as Federal Reserve policy makers signaled a willingness to move slowly on raising short-term interest rates, potentially offering some relief for American manufacturers. "The worst is behind us," said Bradley Holcomb, who oversees the ISM survey. More sectors in April reported increased production and new orders, compared with March, Mr. Holcomb said, offering "a broader base of growth across more industries." The ISM's export index rose to its highest level since November 2014. Still, overall growth in both production and orders slowed in April, and the employment measure rose but remained in contractionary territory. "It's certainly nothing to write home about," Mr. Holcomb said. Worries persist about the health of the global economy, and readings on factory activity around the world have been mixed. Data provider Markit on Monday said its eurozone manufacturing gauge ticked higher in April, signaling continued, if lackluster, expansion in the heart of Europe. Meanwhile, growth slowed in India and Mexico, and factory conditions deteriorated sharply last month in Japan and Brazil. In the U.S., the industrial economy has sagged since late 2014. The ISM factory gauge fell to 50 last September and slipped into contractionary territory for the next five months. The Fed's industrial-production index fell 2% in March from a year earlier, reflecting sharp declines in mining and utility output; manufacturing production rose a modest 0.4% from March 2015. The tide may now be turning. The warm winter and a cool start to spring in parts of the country were a one-two punch for Ariens Co. in Brillion, Wis., which makes snow blowers and lawnmowers. "Our business is a little softer than we'd like," Chief Executive Dan Ariens said. But Mr. Ariens said he is hopeful going forward. Prices for steel and other commodities are low, and the U.S. housing market looks solid, which should bolster demand for mowers and other equipment. "We think that there's a nice runway ahead for housing," he said. "Now, we just need spring." Monday's ISM report showed most manufacturing sectors were paying more for raw materials in April, compared with the prior month. The overall price index jumped to its highest level since September 2014. Overall, the ISM reported growth across 11 of 18 manufacturing industries in April, led by wood products. Credit: By Ben Leubsdorf
Subject: Factories; Industrial production; Economic indicators; Manufacturing
Location: United States--US
Classification: 1110: Economic conditions & forecasts; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.2
Publication year: 2016
Publication date: May 3, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785964292
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785964292?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Saudi Binladin Group Slashes Jobs --- Construction giant lays off 50,000 workers as low oil prices squeeze its business
Author: Parasie, Nicolas
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 May 2016: B.3.
Abstract:
The Saudi Ministry of Labor wasn't immediately available to comment. Besides reducing the head count by a quarter, the company will also look at streamlining its operations and boosting its efficiency, the person said, declining to be more specific.
Full text: DUBAI -- Saudi Binladin Group laid off 50,000 people, according to a person briefed on the plans, as the construction giant attempts to turn around a business hammered by low oil prices. The scale of the retrenchment means the Jeddah, Saudi Arabia-based conglomerate cut nearly a quarter from its workforce of about 200,000. The people who were laid off, mostly construction-site workers from Asia, have been paid their outstanding salary and dues, according to the person familiar with the situation. "The people laid off are not thrown in the street without pay," this person said. "The Saudi Binladin Group is extremely careful in honoring its commitments." A spokesman for the Saudi Binladin Group, or SBG, confirmed the layoffs but declined to be more specific. He said the employees who were dismissed would receive full compensation and other entitlements. "Adjusting the size of our manpower is a normal routine especially whenever projects are completed or near completion," said the spokesman for SBG. "Most of the released jobs had initially been recruited for contracted projects with specific time frame and deliverables," he added. In the oil-rich nation's boom years, Saudi Binladin flourished as one of the government's preferred builders, tasked with multibillion-dollar projects, such as in the holy cities of Mecca and Medina. But governments across the oil-rich Persian Gulf, including Saudi Arabia, have slashed spending on large-scale projects to plug their widening budget deficits caused by the drop in crude prices. For the past half year, SBG has been grappling with the strained finances of its biggest client, the Saudi Arabian government, and the fallout of a deadly crane accident in the city of Mecca last year. That situation has left the construction conglomerate buried under billions of dollars of debt, bankers and financial advisers familiar with the matter said. The Persian Gulf's biggest construction firm has already defaulted on an unspecified number of debt repayments and been unable to pay a number of subcontractors and suppliers, bankers familiar with the company's finances previously said. Creditors and advisers to SBG have said that one of the main reasons behind the company's financial woes stem from the Saudi government's failure to pay for completed or ongoing construction work. SBG in recent years has completed work on multiple multibillion-dollar government projects, including hospitals, universities, highways and the extension of the holy mosque in Mecca. "There are many projects where payments haven't happened or where there has been a delay in paying the laborers," said the person familiar with knowledge of SBG's plans. "Some of these projects are coming to an end or running slow, so as a company you adjust and reduce the fixed costs among other things," the person said. The Saudi Ministry of Labor wasn't immediately available to comment. Besides reducing the head count by a quarter, the company will also look at streamlining its operations and boosting its efficiency, the person said, declining to be more specific. Credit: By Nicolas Parasie
Subject: Wages & salaries; Construction industry; Layoffs
Location: Saudi Arabia
Company / organization: Name: Saudi Binladen Group; NAICS: 551112
Classification: 6100: Human resource planning; 9178: Middle East; 8370: Construction & engineering industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: May 3, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785964310
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785964310?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibi ted without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Baker Hughes Retrenches --- After scuttled deal, with Halliburton, oil- services company plans cost cuts, buybacks
Author: Sider, Alison; Hufford, Austen
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 May 2016: B.1.
Abstract:
Baker Hughes had struggled in some areas even before oil prices plunged, and is now re-entering the market at an even more difficult moment, with too many players and not enough work to go around, said Bill Herbert, an analyst with Piper Jaffray Cos. On Monday, Baker Hughes said it was "taking immediate steps" to remove costs it couldn't previously eliminate due to merger, and was also "evaluating broader structural changes" to further reduce expenses and improve efficiency.
Full text: Baker Hughes Inc. said Monday that it is working to emerge from its failed merger with Halliburton Co. as a leaner, more focused oil-field services company, outlining plans to cut $500 million in costs while buying back $1.5 billion of shares and $1 billion of debt. A day after announcing that its merger with Halliburton, once valued at nearly $35 billion, was being called off after regulators claimed it would hurt competition, Baker Hughes said it would use a $3.5 billion breakup fee it got from Halliburton to repair its balance sheet and restructure its business. Baker Hughes has been tethered to Halliburton since the deal to combine the second- and third-largest oil-field services businesses after Schlumberger Ltd. was announced in November of 2014. That has kept it from cutting costs and making other changes in response to the oil price rout that reduced demand for work drilling wells and pumping oil and natural gas. Now that it is on its own, Baker Hughes says it will focus on its strengths and simplify its business. "Innovation is what we do best and what our customers need the most," Chief Executive Martin Craighead said. The companies had been working for roughly a year and a half to get the complex deal completed, and had been planning potentially to sell billions in assets to appease regulators. But the Justice Department sued to block the merger last month, arguing that the deal would eliminate head-to-head competition in markets for nearly two dozen products and services used for U.S. oil exploration and production. On Monday following the merger's collapse, Deputy Assistant Attorney General David Gelfand said the deal was "not fixable." "We heard extreme statements of concern from dozens of companies and over 100 individuals," he said Monday during a conference call with reporters. European Union antitrust authorities, who had opened a full investigation into the proposed merger in January, also said Monday that the deal had raised competition concerns and said that several customers had expressed issues with the merger. Halliburton Chief Executive David Lesar said Sunday that the company still believed the merger would have benefited customers and shareholders of both companies. But amid regulatory challenges and "general industry conditions that severely damaged deal economics," calling it off was the best course, he said. Shares of Baker Hughes fell 2% Monday in New York trading to $47.39. Halliburton shares rose 1.8% to $42.07. Some antitrust analysts, and even Baker Hughes itself, raised concerns from the outset that regulators would block the deal. While most mergers continue to receive government approval, U.S. antitrust enforcers in the Obama administration have increasingly pushed back against transactions they believe raise significant threats to competition. Last year, the Justice Department challenged several major deals, including General Electric Co.'s planned sale of its appliance business to Electrolux AB and Comcast Corp.'s planned acquisition of Time Warner Cable Inc. Both these deals also were abandoned. Matt Marietta, an analyst at Stephens Inc., said the severity of the downturn made divestitures harder. And regulators proved more staunchly opposed than the company anticipated. Citing its cash war chest, many oil-field services experts have suggested that Baker Hughes will be in a strong position to take advantage of a recovery as crude oil prices have started to tick back up toward $50 a barrel. But others noted that Baker Hughes will need to make up the ground it lost while the merger dragged on. Baker Hughes had struggled in some areas even before oil prices plunged, and is now re-entering the market at an even more difficult moment, with too many players and not enough work to go around, said Bill Herbert, an analyst with Piper Jaffray Cos. On Monday, Baker Hughes said it was "taking immediate steps" to remove costs it couldn't previously eliminate due to merger, and was also "evaluating broader structural changes" to further reduce expenses and improve efficiency. The company said it was assessing where it will provide its current full-service model and where it will scale back offerings. One business where Baker Hughes has struggled is fracking, which involves injecting water and other materials into a well to break apart rock formations to release oil and gas. Analysts have said the company stumbled as it tried to integrate BJ Services, a fracking firm it acquired in 2010, and has struggled to master the logistical challenges. Baker Hughes said Monday it would "retain a selective footprint" in the U.S. onshore pressure pumping business as it cited overcapacity, commoditized pricing and low barriers to entry. It also said it intends to refinance its $2.5 billion credit facility, which expires in September. Analysts said the collapse of the merger could spark a new round of deal making and reshuffling among oil-field services companies, which are grappling with the deep cuts being made by exploration and production companies. Credit: By Alison Sider and Austen Hufford
Subject: Oil service industry; Antitrust; Securities buybacks; Cost control; Acquisitions & mergers; Strategic planning
People: Craighead, Martin
Company / organization: Name: Halliburton Co; NAICS: 213112, 237990; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Classification: 8510: Petroleum industry; 9190: United States; 2310: Planning
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: May 3, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1785964433
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1785964433?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Slip Ahead of Inventory Data; U.S. crude inventories are expected to have reached a record high
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
Money managers including hedge funds still hold large net bets that oil prices will rise, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. If those traders decide to close out their bullish wagers, that could send prices tumbling lower, analysts say.\n
Full text: NEW YORK--Oil prices fell for a third straight session Tuesday on expectations that U.S. crude-oil inventories have hit a new record high. Renewed concerns about weaker Chinese demand and growing global supplies also weighed on the market. Prices have slid more than 5% since hitting 2016 highs last week as traders questioned whether the recent rally in oil prices has run too far. Prices surged to five-month highs in recent weeks due to production outages in some parts of the world and expectations of declining U.S. output. But recent production and inventory data have indicated still-high output around the world, damping some investors' optimism that the global glut of crude is due to shrink. Analysts also warn that if prices continue to rise producers in the U.S. might be able to increase their drilling activity, adding to the market oversupply. "As the market moves up, it still has to look over its shoulder with somewhat of a jaundiced eye at the overhang that hasn't gone away," said Andy Lebow, senior partner at Commodity Research Group. "The market can pull back further from these levels." Light, sweet crude for June delivery settled down $1.13, or 2.5%, to $43.65 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 86 cents, or 1.9%, to $44.97 a barrel on ICE Futures Europe. Inventories of crude oil remain high around the world, with U.S. stockpiles at their highest level in more than 80 years. The Energy Information Administration is due to report inventory levels as of April 29 on Wednesday. Analysts surveyed by The Wall Street Journal expect the EIA to report that crude stockpiles rose by 1.2 million barrels in the week, which would put them at a new weekly record high. Analysts also expect the EIA to report that gasoline inventories shrank and stockpiles of distillates, including diesel fuel and heating oil, were unchanged. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 1.3-million-barrel increase in crude supplies, a 1.2-million-barrel decline in gasoline stocks and a 2.6-million-barrel decrease in distillate inventories, according to market participants. In addition, a gauge of China's manufacturing industry reported Tuesday by Caixin Media Company Ltd. and Markit Economics fell in April, marking the 14th straight month of contraction. China is the No. 2 oil consumer after the U.S., and fears that slowing economic growth in China could reduce oil demand helped push oil prices to 13-year lows earlier this year. Adding to oversupply concerns, analysts expect that the Organization of the Petroleum Exporting Countries increased its production in April, according to forecasts and surveys released late last week. Large producing nations including OPEC members failed to reach an agreement to freeze their output at a meeting last month in Qatar. Without a production freeze, some countries could start pumping more as they compete for market share, analysts say. Russia announced April production of 10.84 million barrels a day on Monday, near the 30-year high of 10.91 million barrels a day reached in March. A strengthening dollar also weighed on oil prices. The WSJ Dollar Index recently rose 0.7%. A stronger dollar makes oil, which is traded in dollars, more expensive for foreign buyers. Money managers including hedge funds still hold large net bets that oil prices will rise, according to data from the Commodity Futures Trading Commission and Intercontinental Exchange Inc. If those traders decide to close out their bullish wagers, that could send prices tumbling lower, analysts say. "That certainly looks to be a bit of a crowded trade," said Eric Rosenfeldt, vice president of sales, supply and trading at fuel distributor PAPCO Inc. "It can get ugly pretty quick if they need to exit." Gasoline futures dropped 5.28 cents, or 3.4%, to $1.51 a gallon, posting their largest one-day decline since February. Diesel futures fell 2.21 cents, or 1.6%, to $1.3334 a gallon. Mark Magnier contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Inventory; Crude oil prices; Price increases; Supply & demand
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786079858
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786079858?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dai's Take: One Firm Addresses Low Oil Prices By 'Doubling Down'
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a. [Duplicate]
Abstract:
Mr. Ayres said he expects the strategy, which is focused on the Permian basin, to yield a 20% internal rate of return on an unlevered basis with oil trading at $40 a barrel.
Full text: Investors in the oil patch aren't out of the woods yet, despite a recent rally in crude prices. Last Friday alone, two more energy companies filed for bankruptcy, Ultra Petroleum Corp. and Midstates Petroleum Co. Inc. Both companies are publicly traded, and Midstates counts First Reserve Corp. and Riverstone Holdings among its largest shareholders. However, one energy investor remains undeterred by the gloomy statistics. During our inaugural WSJ Pro Private Equity event on Friday, Charlie Ayres, chairman of Trilantic North America, said that his firm plans to "double down" on energy deals. "Our view is that $35 oil is not sustainable in the world in a middle-term equilibrium here," said Mr. Ayres. "Can it go back down to touch $27? Absolutely, but you will have no American oil and gas...if you [had] two years of $30 oil." One approach Trilantic has taken is to invest "at the well level," buying working interests ranging from 15% to 20% in oil and gas wells on a non-operating basis. Mr. Ayres said he expects the strategy, which is focused on the Permian basin, to yield a 20% internal rate of return on an unlevered basis with oil trading at $40 a barrel. Trilantic also made a separate, natural-gas investment in the Haynesville shale, a carbon-rich rock formation that underlies parts of southwestern Arkansas, northwest Louisiana, and eastern Texas. Mr. Ayres didn't discuss details of that investment. Trilantic, which traces its roots to Lehman Brothers' merchant banking arm, has plenty of capital for energy deals. In addition to a $2.2 billion main buyout fund closed in 2013, Trilantic also manages a $388 million energy-focused fund. All told, the firm has more than $1 billion of capital available to invest in the sector. Trilantic recently beefed up its industry expertise by forming an energy advisory board. However, the firm's new investments aren't without risk. Some firms that moved early into energy to take advantage of the distress got burned. Others levered their deals with too much debt now find certain portfolio companies facing liquidity constraints. Trilantic's Mr. Ayres said his firm isn't timing the market. "We're not in the distress game...That's not what we do," he said. When the firm buys oil and gas assets, it uses little to no debt, according to Mr. Ayres. "We're not levering this play at all," he said. "You're going to be able to weather any storm, because there is no one knocking on your door saying, 'I'm going to take the keys from you.'" Write to Shasha Dai at shasha.dai@wsj.com. Credit: By Shasha Dai
Subject: Natural gas; Energy industry
Company / organization: Name: First Reserve Corp; NAICS: 523920; Name: Ultra Petroleum Corp; NAICS: 211111; Name: Lehman Brothers Holdings Inc; NAICS: 523110, 551112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786139449
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786139449?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Why Cheap Oil Is a Problem For Lufthansa; Times need to be tougher for the airline to make progress
Author: Wilmot, Stephen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
Chief executive Carsten Spohr reiterated his call for industry consolidation at Lufthansa's annual shareholder meeting last week.
Full text: Cheap oil isn't all it is cracked up to be for European airlines. Tuesday's first-quarter update from Deutsche Lufthansa gave investors further cause to worry that the sector will compete away the benefits of a low oil price. True, the German flag-carrier's operating losses for the winter quarter narrowed to [euro]53 million ($61.3 million) from [euro]167 million. But last year's figures included the impact of strikes and a dispute over currency repatriation in Venezuela. Strip these out and Lufthansa only lost [euro]12 million less than last year, despite a [euro]237 million tailwind from lower fuel costs. Lufthansa shares duly nose-dived. Pricing is the key problem: Lufthansa's fares were 6.3% lower than the previous year. Add to that the effect of slightly emptier planes and revenues per seat flown--the key industry measure of unit sales--fell 7.5% year-over-year. Such figures validate concerns that airlines are building more scale than subdued economic growth can absorb. Lufthansa's key capacity figure rose 6.6% year-over-year, led by growth on routes to Asia and the Americas. The terrorist attacks in Brussels in March have only made the seats harder to sell. The other problem with cheap oil is that it makes success elsewhere harder. Chief executive Carsten Spohr reiterated his call for industry consolidation at Lufthansa's annual shareholder meeting last week. Condor , an airline owned by tour operator Thomas Cook, Brussels Airlines (which Lufthansa already part-owns ) and Scandinavian leader SAS have all been rumored to be in Mr. Spohr's sights. But as long as the low oil price flatters profits, sellers seem likely to demand steep prices . Meanwhile, Lufthansa continues to battle it out with labor unions . These can easily point to management expectations of rising profits this year as evidence that cuts are unnecessary. Paradoxically, it is hard to see Europe's largest airline making much progress until the operating climate gets tougher. Write to Stephen Wilmot at stephen.wilmot@wsj.com Credit: By Stephen Wilmot
Subject: Airlines; Euro; Shareholder meetings
Location: Venezuela
Company / organization: Name: Brussels Airlines; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786139549
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786139549?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Dollar Reverses Losses as Oil Sinks, Jobs Loom; Traders take profits on bets against U.S. currency after it hits multimonth lows against euro, yen
Author: Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract: None available.
Full text: The dollar reversed losses Tuesday after hitting multimonth lows against the euro and the yen, as investors took profits on bets against the U.S. currency. The Wall Street Journal Dollar Index, which measures the greenback against a basket of 16 currencies, was recently up 0.8% at 85.29, boosted by gains against the euro, Australian dollar and emerging-market currencies. A sharp drop in oil prices is buoying the dollar against the currencies of commodity producing countries, including a broad swath of emerging markets. The dollar was recently up 1.5% against the Canadian dollar at 1.2717. It gained 1.9% against the Brazilian real, at 3.5653, and increased 1.9% against the Russian ruble, to 66.42. Light, sweet crude for June delivery recently fell $1.13, or 2.5%, to $43.65 a barrel on the New York Mercantile Exchange on renewed concerns about weaker Chinese demand and growing global supplies. The Australian dollar was recently down 2.4% at $0.7487 after the Reserve Bank of Australia cut its interest rate to a historic low. At the same time, some investors are eager to take profits on recent bets against the dollar ahead of Friday's U.S. employment report, a data point that has lately been a bright spot in the country's economy. "Dollar bears may have gotten a little ahead of themselves," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. "The tone of U.S. data hasn't been great, but it does not warrant the selloff in the dollar that we have seen." Investors have turned more bearish on the dollar in recent weeks, after the U.S. economy grew slower than expected in the first quarter and the Fed signaled that it is in no hurry to raise interest rates this year. Higher rates tend to boost the dollar, as they make the U.S. currency more attractive to yield-seeking investors. The dollar was recently up 0.2% at ¥106.65, reversing losses after hitting its lowest level against the Japanese currency since October 2014 earlier in the session. The euro was down 0.3% at $1.1503, after earlier hitting its highest level since August 2015. More * Dollar Bulls Are Bailing * Sterling Erases Year's Losses Traders are bracing for Friday's employment report, which many believe offers the clearest snapshot of how the U.S. economy is faring. "If the jobs report is lackluster, it would give the Fed even more pause regarding tightening policy," said Joe Manimbo, market analyst at Western Union. Aggregate positions in the dollar, which flipped not long ago from long bets on a stronger dollar to short bets on a decline in the U.S. currency, recently widened to their most bearish since May 2014, according to Scotiabank. Many bears say the latest round of economic data and decision-making by monetary policy makers has left little room for the dollar to rally. The first reading on gross domestic product growth for the first quarter was weaker than expected last Thursday. The Institute for Supply Management's manufacturing index also dipped, data showed Monday. The Fed gave no signals about when it will lift rates next, leaving traders in the Fed funds futures market to give a June rate increase a 13% probability, CME data showed Monday. Meanwhile, investors were disappointed by the Bank of Japan, which chose not to enact further stimulus measures last week. Ben Eisen contributed to this article. Write to Ira Iosebashvili at ira.iosebashvili@wsj.com Credit: By Ira Iosebashvili
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786239889
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786239889?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Fixed Rates Ballast Interest Rates and Commodity Prices; The price level in dollars is also affected by the total demand for dollars and for specific commodities (like crude oil) which are priced in dollars.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
Though Prof. Blohm doesn't seem to have tested the theory empirically, we can attest, having done so by forecasting for nearly three decades, that both secondary points are indeed helpful in forecasting commodity and financial asset prices, in both U.S. and foreign markets.
Full text: In his letter of April 28 Prof. Robert Blohm concedes the main point of our April 20 op-ed "Monetary Reform or Trade War ," noting that when it was suspended, the Bretton Woods gold-exchange system "was already unsustainable because of the 'duplicating credit' the authors mention." He raises two important secondary points: first, that under the world paper dollar system, the price level in dollars is also affected by the total demand for dollars and for specific commodities (like crude oil) which are priced in dollars; and second, that under floating exchange rates, commodity-price swings in dollars induce destabilizing swings in exchange rates for nonreserve countries. Though Prof. Blohm doesn't seem to have tested the theory empirically, we can attest, having done so by forecasting for nearly three decades, that both secondary points are indeed helpful in forecasting commodity and financial asset prices, in both U.S. and foreign markets. But these secondary concerns make little practical difference in setting economic policy. As Prof. Blohm rightly notes, "commodity prices and interest rates were all boringly stable before President Nixon ended the gold-convertibility of the U.S. dollar." Lewis E. Lehrman Greenwich, Conn. John D. Mueller Washington
Subject: Foreign exchange rates; Floating exchange rates; American dollar
Location: United States--US
People: Lehrman, Lewis E
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786254022
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786254022?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Golden Gate-Backed PetroChoice Acquires Oil Business From Pegasus-Backed Universal Lubricants; PetroChoice acquired Universal Lubricants' new oil business as well as laboratory and blending facilities. Universal Lubricants will operate as RS Used Oil Services Inc. and Midstate Environmental Services LP going forward.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
Universal Lubricants will operate as RS Used Oil Services Inc. and Midstate Environmental Services LP, both of which provide services for meeting regulatory requirements for used oil and other materials, according to the release.
Full text: PetroChoice, a lubricants maker backed by Golden Gate Capital, said it acquired the new oil business of Pegasus Capital Advisors LP-backed peer Universal Lubricants LLC. Universal Lubricants, of Wichita, Kan., sells lubricants for industrial, agricultural, construction, trucking, mass transit and passenger transportation applications. The company's new oil business consists of 15 distribution locations and about 215 employees, according to a news release. In addition to Universal Lubricants' distribution centers, PetroChoice acquired laboratory and blending facilities as part of the transaction. PetroChoice will own 45 facilities after the deal, according to the release. Universal Lubricants will operate as RS Used Oil Services Inc. and Midstate Environmental Services LP, both of which provide services for meeting regulatory requirements for used oil and other materials, according to the release. San Francisco firm Golden Gate Capital acquired PetroChoice from Greenbriar Equity Group LLC in late 2015. The firm, with more than $15 billion in capital under management, invests in sectors such as financial services, energy, business services, retail, consumer products and software. Pegasus invested in Universal Lubricants in 2006. The New York firm typically provides growth capital to midmarket companies in such areas as health and wellness, waste, energy and food.
Subject: Acquisitions & mergers
Location: San Francisco California
Company / organization: Name: Greenbriar Equity Group LLC; NAICS: 523910; Name: Pegasus Capital Advisors; NAICS: 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786270922
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786270922?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Main Street Leads Recapitalization of Gulf Publishing, Petroleum Economist; Oil and gas-focused Petroleum Economist will become a Gulf Publishing publication
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
Publicly traded business development company Main Street Capital Corp. said it led a $16.4 million investment to facilitate the management buyout of publishing company Gulf Publishing Co. and of oil and gas-focused journal Petroleum Economist Ltd. Main Street invested $13.1 million, consisting of first-lien senior secured debt and a direct equity investment, according to a news release.
Full text: Publicly traded business development company Main Street Capital Corp. said it led a $16.4 million investment to facilitate the management buyout of publishing company Gulf Publishing Co. and of oil and gas-focused journal Petroleum Economist Ltd. Main Street invested $13.1 million, consisting of first-lien senior secured debt and a direct equity investment, according to a news release. The firm said it completed the investment with Gulf Publishing President and Chief Executive John Royall, members of the company's management team and third party co-investors led by Houston investor Russell Denson. Gulf Publishing, of Houston, produces and distributes trade journals, including World Oil, Hydrocarbon Processing and Gas Processing, as well as industry research, databases and software for the energy industry. The company also organizes events and conferences. The company will add Petroleum Economist, based in London, to its list of offerings. Houston-based Main Street Capital invests in midmarket and lower midmarket companies. Its lower midmarket targets typically have annual revenue of $10 million to $150 million.
Subject: Appointments & personnel changes; Acquisitions & mergers; Publishing; Energy industry
Company / organization: Name: Gulf Publishing Co; NAICS: 511120, 511130, 511199
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786277608
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786277608?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Despite Shale Glut, U.S. Imports More Foreign Oil; Market disruptions and overseas storage that is at or near capacity have pushed crude imports up 20% from a year ago
Author: Berthelsen, Christian; Cook, Lynn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
A Wall Street Journal analysis of U.S. Energy Department numbers shows nearly 114 million barrels of foreign oil entered the U.S. between May 2015 and February and went to storage tanks.
Full text: The U.S. is importing more foreign crude than it has in years, becoming one of the last ports of call for many oil-producing nations despite a glut of crude from domestic companies. Oil imports this year have surged 20% to about eight million barrels a day since early May 2015, when they approached a 20-year low, according to federal data. Crude from the Republic of Congo, Russia and Brazil is arriving at U.S. ports, while Canada is sending a record amount of oil to the U.S., the data show. A series of market disruptions in recent months is one reason for the sharp rise in imports, even though U.S. production is close to a three-decade high at nearly nine million barrels a day. These changes include Iran's return to exporting crude after sanctions were lifted in January, a move that indirectly led to more U.S. imports even though Iran itself can't sell to the U.S. Another big driver: The rest of the world is running out of places to store oil. Facilities from Rotterdam to Cape Town already are near capacity, but the U.S. still has room to spare, said Brian Busch, director of oil markets for Genscape, a data firm that tracks energy shipments. The U.S. has filled about two-thirds of its total storage capacity and has room for roughly 100 million barrels more, Mr. Busch said. By comparison, major storage hubs in China and South Africa appear full, and Europe's main storage space centered in Rotterdam appears to be within 10% of its usable capacity, according to Mr. Busch. But with more crude heading to the U.S., the states are moving closer to full storage capacity, too, said Skip York, a vice president with Wood Mackenzie, an energy consultant. As U.S. tanks fill, "it will eventually have to put some downward pressure on U.S. prices," Mr. York said. Even before then, the raft of new supply from overseas could weigh on U.S. oil prices. On Tuesday, oil for June delivery fell $1.13, or 2.5%, to settle at $43.65 a barrel on the New York Mercantile Exchange, on expectations that U.S. crude inventories will keep climbing. Crude is up 67% from a 2016 low hit in February but down 28% from a year ago. Still, rising imports isn't bad news for everyone in the oil patch. Traders that can afford to hold oil and lock in higher sales through the futures market are big beneficiaries. Refiners like Phillips 66, major energy companies like BP PLC and international trading houses like Mercuria Energy Group are storing foreign crude in the U.S. so they can sell it for a profit later, according to federal data. Socking away oil in American storage can cost between 30 cents and 85 cents a barrel each month, which is well below the $1 a barrel or more it takes to keep crude floating in oil tankers, observers said. "That's precisely why some of these traders import it, to put it in storage," said Amrita Sen, co-founder of Energy Aspects, a London consulting firm. A Wall Street Journal analysis of U.S. Energy Department numbers shows nearly 114 million barrels of foreign oil entered the U.S. between May 2015 and February and went to storage tanks. The majority is parked in Oklahoma and Illinois. That figure is up 30% from less than 88 million barrels in the same period a year earlier. Meanwhile, wait times to deliver foreign crude into the U.S. have become so backlogged that more than 28 million barrels of oil are sitting idle on tankers in the Gulf of Mexico, according to ship-tracking firm ClipperData. That figure is more than double the normal level, ClipperData said. Storage space isn't the only reason for the U.S. import boom. Countries like Venezuela and Iraq are selling oil for low prices just to keep pumping, observers said, and Iran is ramping up exports. U.S. refiners still are prohibited from buying Iranian oil, but crude from the Persian Gulf country going to other destinations has unleashed a chain reaction that is causing more oil to flow into the U.S. Iran has been underpricing many of its competitors to win back market share. That means some countries that got cut out of business in Europe and Asia because of lower-priced Iranian crude are selling to the U.S. market, traders and analysts said. Countries like Angola, Albania and the U.K. recently delivered crude to New Jersey, California and Louisiana after Iran underpriced them, according to oil traders and analysts. These countries haven't had much U.S. business since the shale revolution until this year, according to ClipperData. Saudi Arabia also shipped 33% more crude to the U.S. at the start of 2016 than it did during the same period last year, boosting volumes into the country back over one million barrels a day, federal data show, as the kingdom seeks to increase its market share. Tom Cambridge, chief executive of Cambridge Production Inc. in Amarillo, Texas, said he has been concerned about the increase in imports and the downward pressure that it can exert on U.S. oil prices. He and a few other oil executives have been trying to drum up support among politicians to push for quotas on foreign oil imports, he said. "If you're filling up at a station in Texas, chances are you're running on Saudi gasoline," Mr. Cambridge said. Another factor influencing imports: The cost of shipping oil on U.S. trains is more expensive than importing foreign crude, a reflection of low oil prices and shifting transportation costs. Refineries in Washington state, which often process Alaskan crude, are importing more oil from Argentina and Brazil, according to federal records. New Jersey and Pennsylvania plants are importing from Azerbaijan, Chad and Gabon, crude that competes directly with the Bakken Shale. "It currently makes more sense to import a tanker of crude from Nigeria than to buy an oil train from North Dakota," said Stephen Wolfe, senior oil strategist in Houston at Trafigura Beheer BV, a commodities trading firm. Write to Christian Berthelsen at christian.berthelsen@wsj.com and Lynn Cook at lynn.cook@wsj.com Credit: By Christian Berthelsen And Lynn Cook
Subject: Energy industry
Location: Iran United States--US California Russia Brazil Europe
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Econ omics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786285016
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786285016?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Forest Fire Leads to Evacuation of Neighborhoods in Northern Alberta City; Firefighters seek to contain blaze threatening to engulf Fort McMurray, at heart of oil-sands patch
Author: George-Cosh, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
Fort McMurray is home to a group of Canadian oil-sands producers, including some of the world's biggest energy companies such as Suncor Energy Inc. and Exxon Mobil Corp.'s Imperial Oil Ltd. subsidiary.
Full text: Authorities evacuated several neighborhoods in Fort McMurray, the heart of Western Canada's oil-sands patch, as firefighters sought to contain a forest fire that threatens to engulf the northern Alberta city. A spokesman for the Regional Municipality of Wood Buffalo said 10 neighborhoods in Fort McMurray, including several streets in the town's downtown area, are under mandatory evacuation orders. There were no injuries, and the evacuations were precautionary, spokesman Robin Smith said. Southbound traffic on Highway 63, the city's main arterial road, was shut down, and homes have been burned down in one neighborhood, Mr. Smith said. Canadian Broadcasting Corp. reported a trailer park located in southern Fort McMurray was also ablaze. The fire was reported to have grown to about 2,600 hectares (about 6,425 acres) from 1,285 hectares Tuesday, according to a statement posted online by the Regional Municipality of Wood Buffalo. Unseasonably warm temperatures and dry weather conditions helped to ignite 35 wildfires throughout Alberta by midday Tuesday, and a provincewide fire ban is in place, according to the provincial government. Fort McMurray is home to a group of Canadian oil-sands producers, including some of the world's biggest energy companies such as Suncor Energy Inc. and Exxon Mobil Corp.'s Imperial Oil Ltd. subsidiary. Canada's total oil-sands production is around 2 million barrels a day, much of which is exported to the U.S. Write to David George-Cosh at david.george-cosh@wsj.com Credit: By David George-Cosh
Subject: Oil sands
Location: Western Canada
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Canadian Broadcasting Corp; NAICS: 515112, 515120; Name: Imperial Oil Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786291158
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786291158?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Price Upheaval Finally Hits Refiners; Last holdouts of energy bust post earnings down sharply from year earlier
Author: Olson, Bradley; Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
Since mid-2012, shortly after two companies spun out their fuel processing units into stand-alone companies, the four best-performing energy stocks on the S&P 500 index were refiners.
Full text: U.S. refiners, which posted robust profits the last 18 months even as other parts of the oil business were racked by low crude prices, finally saw their roll come to a halt in the first quarter. Many refining businesses reported earnings for the period that were down roughly by half from a year earlier. That decline helped sour results for oil giants such as Exxon Mobil Corp., which has counted on refining to offset profit declines in energy production, and for Valero Energy Corp., the world's largest stand-alone refiner by output, which on Tuesday reported its lowest first-quarter profit in four years. "The first quarter presented us with challenging markets, with gasoline and diesel margins under pressure," said Valero Chief Executive Joe Gorder. Related Reading * No Agreement on Oil Freeze at Doha Meeting * Despite Shale Glut, U.S. Imports More Foreign Oil * Shell, Saudi Aramco Plan to Break Up Motiva Partnership Two trends have helped upend the refining boom: U.S. crude is no longer trading at a steep discount compared with oil from other parts of the world. And American exports of gasoline and diesel are pushing into increasingly well-supplied foreign markets. For years, U.S. refiners benefited because a bounty of oil unlocked by shale exploration was essentially landlocked in the country due to a ban on most crude exports, creating a glut that pushed down prices compared with barrels in Africa and the Middle East. That allowed U.S. refiners to turn oil into gasoline, diesel and other products more cheaply than some competitors, and enhanced their ability to export the fuels to foreign markets. Between 2010 and 2015, U.S. exports of gasoline and other fuels rose 38% to 2.8 million barrels a day, helping to reduce the nation's trade imbalance. Now that U.S. oil production is falling and the country allows crude exports, that advantage has significantly diminished. Once as high as $25 a barrel in 2011, the difference between U.S. and international crude benchmark prices now sits at a little over $1 a barrel today. New pipelines also have further smoothed out regional price differences that had benefited some American refiners by giving them greater access to landlocked oil. While refiners largely still make money, and are in better shape than during the industry's most recent challenging times in 2009, the lower returns illustrate how the price crash is finally reaching a piece of the business that had been insulated. "When prices come down as they have, refining margins hold out for a period of time, but that works its way through the system and the pressure comes back on," said Richard Forrest, a partner at consulting firm A.T. Kearney. It is hard to overstate how good the refining business has been in recent years. Since mid-2012, shortly after two companies spun out their fuel processing units into stand-alone companies, the four best-performing energy stocks on the S&P 500 index were refiners. All four companies--including Valero, Tesoro Corp., Marathon Petroleum Corp. and Phillips 66--more than doubled in value. Last year, when average U.S. oil prices fell by almost half to about $45 a barrel, Valero shares rose 43%. Exxon's global network of refineries has been a critical bulwark against losses since oil prices began to tumble in the summer of 2014. That is the central rationale for the company's "integrated" structure of tapping wells, shipping crude and processing it into fuels and chemicals: When crude prices fall, refining will remain a lucrative business. Yet Exxon's profit from its refineries fell 46% to $906 million in the first quarter. Chevron's fell 48%. The totals were still enough to help keep Exxon profitable in the quarter, but Chevron posted its second-straight quarterly loss, the first time that has happened in at least two decades. On Tuesday, Valero disclosed its earnings dropped nearly 49%, to $495 million, from the first quarter of last year. Tesoro, which has large operations on the West Coast, reports on Wednesday. Along the Gulf Coast, home to more than half of the country's refining capacity, per-barrel profit margins shrank from $10.30 on average last year to $6.75 in the first three months of 2016, according to refining consultants Turner, Mason & Co. Some refiners in the Midwest cut production rates that quarter to work off extra inventory. Many analysts expect demand will come roaring back when U.S. drivers emerge from winter malaise and take to the road for summer trips. Refiners say they are already seeing signs of a coming strong driving season. The U.S. Energy Information Administration has predicted domestic gasoline demand will grow 1.4% this year after rising 2.7% last year. "Strong demand and too much crude is great for refiners," Wolfe Research LLC analyst Paul Sankey wrote in a research note last month. The caveat: "It has to be said we are dependent on driving season showing up in a big way," he added. But even if predictions for a profitable summer prove true, refining mightn't be able to keep propping up earnings for companies that both produce oil and consume it in plants that churn out gasoline and diesel. Drivers in the U.S. raced to buy gas-guzzling trucks and SUVs last year when fuel prices first started to fall, helping to push demand for gasoline up last year. But the average vehicle sold today is significantly more efficient than just a few years ago, according to the University of Michigan's Transportation Research Institute, which tracks fuel economy. For the past year and a half, low crude prices have encouraged refiners to buy oil and produce more fuel than the world needs, said Robert Campbell, head of oil products research at consultants Energy Aspects. That has led to a buildup of fuel inventory globally, which could cut into refining margins later this year as crude prices start to recover. "We'll go back to having an excess of refining capacity, which was the problem prior to the fall in oil prices," he said. Douglas Kobin contributed to this article. Write to Bradley Olson at Bradley.Olson@wsj.com and Alison Sider at alison.sider@wsj.com Credit: By Bradley Olson and Alison Sider
Subject: Profit margins; Crude oil prices; Petroleum production; US exports; Petroleum refineries
Location: United States--US
Company / organization: Name: Valero Energy Corp; NAICS: 486210, 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786291165
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786291165?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Pacific Exploration and Production Files for Bankruptcy in Colombia; The oil and gas producer, which filed for bankruptcy in Canada in April, filed for similar protection in Colombia on Tuesday, a day after the Colombian Superintendent of Companies initiated a "control proceeding" against the company. Meanwhile, EIG plans a fresh offer to Pacific's noteholders.
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
Pacific's restructuring has been complicated by most of the company's operations being in Colombia, but its corporate headquarters being in Toronto, and a large number of its bondholders in U.S. Pacific filed for bankruptcy in Canada in April amid a prolonged slump in oil and gas prices.
Full text: Pacific Exploration and Production Corp. filed for bankruptcy protection in Colombia on Tuesday, a day after the Colombian government took control of certain assets of the oil and gas producer. The bankruptcy filing in Colombia followed a similar filing by Pacific in Canada in April, and is the latest twist in a contested battle to control this energy company. The Colombian government's "control proceeding" was taken earlier this week by the Superintendent of Companies of Colombia against certain operations of Pacific, said people with knowledge of the matter. This was done in accordance with Article 85 of Law 222 of 1995, and enabled the superintendent to oversee Pacific's operations and demand enhanced communication from the company, said one person with knowledge of the situation. Without consulting with the superintendent, Pacific will now be unable to make any business decisions outside of the ordinary course of operations, the person said. Edgar Laiton, a spokesman for the superintendent, didn't confirm the proceeding. He did, however, say regulators from his office has visited Pacific's facilities and requested documents from the company as part of an "ongoing review of Pacific's finances" triggered by Pacific's bankruptcy filing in Canada. Pacific has complied with those requirements, said Mr. Laiton. Pacific, which was formerly known as Pacific Rubiales Energy, is one of Colombia's largest oil and gas producers and is an important contributor to the government revenue. The regulators want to make sure Pacific's operations remain unaffected by its restructuring, said Mr. Laiton. He declined to discuss the findings of the review, which he said aren't public. Pacific's restructuring has been complicated by most of the company's operations being in Colombia, but its corporate headquarters being in Toronto, and a large number of its bondholders in U.S. Pacific filed for bankruptcy in Canada in April amid a prolonged slump in oil and gas prices. The company has since signed a deal with Canadian private equity firm the Catalyst Capital Group Inc., which requires Catalyst to provide financing in support of Pacific's restructuring. Pacific said in an April 29 release that holders of 67.8% of the company's bonds support the plan. EIG Global Energy Partners, however, has contested Pacific's deal with Catalyst, calling it inferior to a prior offer from EIG. A person with knowledge of the situation said Washington, D.C.-based EIG plans to unveil a fresh offer to Pacific's noteholders by Friday. The new offer would mark the third attempt by EIG to make a play for Pacific. The firm first teamed with Mexican conglomerate Alfa SAB de CV in 2015 to acquire the stock of Pacific, then known as Pacific Rubiales, that wasn't already owned by Alfa. That deal fell through in July 2015 after a group of Pacific Rubiales shareholders opposed to the takeover. In January, EIG launched a second play, making an unsolicited tender offer for Pacific bonds. That effort failed after EIG didn't amass enough bonds. -Anatoly Kurmanaev contributed to the article. Write to Shasha Dai at shasha.dai@wsj.com; follow her on Twitter: @ShashaDai1 Credit: By Shasha Dai
Subject: Bankruptcy
Location: Colombia Canada
Company / organization: Name: Catalyst Capital Group Inc; NAICS: 523910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786291170
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786291170?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Pemex Chief: Mexico's Oil Giant on Track to Meet Spending-Cut Goals; José Antonio González Anaya says Pemex's financial position 'solid' in short term after government's capital injection
Author: Montes, Juan; Luhnow, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract: None available.
Full text: MEXICO CITY--On his second day as the head of state-oil giant Petróleos Mexicanos this past February, José Antonio González Anaya got an early glimpse of what his new job would be like: He canceled an expensive contract to buy 40,000 computers. "At large companies like Pemex, you don't buy computers, you lease them," said Mr. González Anaya in an interview on Tuesday at his office in Pemex's headquarters. "By canceling the contract, we saved $171 million." The soft-spoken Mr. González Anaya, who is about to complete his first 100 days as Pemex CEO, has probably the toughest job in Mexico's government: turning around an oil company that lost $30 billion last year, has seen oil output decline for 11 consecutive years, faces unfunded pension liabilities of $86 billion and is badly overstretched and overstaffed. Pemex's financial hole, worsened by low oil prices, prompted Mexico's government to bail out the company in mid-April by announcing a capital injection of $4.2 billion to pay overdue debts with suppliers. The support also included lowering Pemex's tax bill by $2.8 billion, savings that will reduce the company's financing needs for the year. The rescue package is conditional on Pemex cutting spending by $5.8 billion this year, around 19% of last year's total spending. Mr. Gonzalez Anaya said he was confident the company would hit the target, slashing everything from the cost of renting oil platforms to putting off investment in exploration. When oil prices started to fall in mid-2014, Pemex failed to react as quickly as oil majors in cutting spending, leading to a liquidity crisis. At one point this past January, Pemex's coffers were down to just $8 million in cash, according to a Pemex official. The company issued debt later that month to keep operating. Former CEO Emilio Lozoya was fired and Mr. González Anaya, a close friend of Finance Minister Luis Videgaray, was brought in. Mr. González Anaya had gained a reputation as an effective cost-cutter in his previous position at the head of Mexico's government health-care institute. "The 'bailout' will enforce fiscal discipline and rigor at the company that has never existed," said Jeremy Martin, an energy expert at the University of California at San Diego's Institute of the Americas. "That discipline and rigor will pay dividends in the medium and long term, particularly if the price of oil recovers." Mr. González Anaya said the announced government support may be enough for this year. "It gives us a solid financial position to keep going in the short-term," he said. Pemex is expecting to get an additional $7.7 billion from the government later this year to cover long-term unfunded pension-liabilities, Mr. González Anaya said, part of a deal last November that limited pension benefits and raised the retirement age for many of Pemex's 135,000 workers. Moody's recently lowered Pemex by two notches to Baa3, its lowest investment grade, and kept a negative outlook on the company, saying the goals of Pemex's new administration "will be challenged by the company's large size and complex operating and labor structures as well as the weak industry fundamentals." Pemex's output fell to 2.2 million barrels a day in March, down about 4.5% versus the year-ago period. The Pemex chief said output would end the year at 2.13 million barrels a day--well below the peak of 3.4 million it reached in 2004. Longer term, the key to getting Pemex on sounder footing is to rely far more than ever on the private sector, Mr. Gonzalez Anaya said. Thanks to Mexico's 2013 Constitutional change that opened the oil industry for the first time in seven decades, Pemex can partner with private oil firms in everything from exploration to refining. "Three years ago, it was illegal to invest with Pemex. A year and a half ago, it wasn't, but high oil prices meant Pemex didn't need to use private investment. Now, it's both legal and the low price...forces us to do it," he said. Pemex's declining fortunes could mean a major silver lining for international private oil firms. In the early months after the energy overhaul passed, Pemex claimed the lion's share of Mexico's existing oil fields for itself. But as prices have dropped, the company has come under greater pressure to "farm out" many of those fields to private hands in joint ventures. So far, Mexico has auctioned off oil-producing fields to private companies totaling some 500 million barrels of oil. But Pemex oversees a total of 25 billion barrels of oil in producing fields, meaning the potential for access for private firms is far greater, Mr. Gonzalez Anaya said. He said that in coming months, Pemex will develop a multiyear strategy to bring in partners for a portion of those fields. He declined to put a specific figure on just how much. Already, Pemex plans to save some $800 million this year by putting off investment in a large offshore field in the Gulf of Mexico until it can find a partner. It expects to get similar savings from paying less to rent oil platforms and other cost cuts. In some cases, exploration would be put off one year in the hopes of partnering with private firms in other fields. Mr. Gonzalez Anaya said Pemex may not have the first "farm outs" done by year end, but that the process would be well underway. Some observers are skeptical Pemex can easily get partners, particularly in refining, where some of Pemex's refineries employ more than 3,000 workers while a U.S. refinery employ on average about 700 people. The Pemex chief said two oil majors have said they aren't interested in refining in Mexico, but that others are taking a closer look, especially refining companies. "At least once a week, we hear from someone who is interested," he said. The company is studying selling some nonstrategic assets, such as fertilizing assets and petrochemical plants. The challenges are so overwhelming that Mr. González Anaya took a deep breath when asked if he will manage to straighten out Pemex. "No doubt we have a gigantic task ahead," he said. Write to Juan Montes at juan.montes@wsj.com and David Luhnow at david.luhnow@wsj.com Credit: By Juan Montes and David Luhnow
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest documentID: 1786291175
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786291175?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Libya's Eastern Government Moves to Block Oil Exports; Exports from the Marsa El-Hariga terminal in Tobruk represent the bulk of Libya's exports
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 May 2016: n/a.
Abstract:
The authorities that control the eastern half of Libya moved Tuesday to block oil exports from areas under their control, escalating a fight over petroleum revenue that threatens a fragile peace agreement.
Full text: The authorities that control the eastern half of Libya moved Tuesday to block oil exports from areas under their control, escalating a fight over petroleum revenue that threatens a fragile peace agreement. The eastern authorities said they would block vessels from loading oil at the Marsa El-Hariga terminal in Tobruk unless they conducted all exports via an oil company controlled by the country's east. An official at Libya's internationally recognized National Oil Co. in Tripoli confirmed that shipments were being blocked. The Marsa El-Hariga exports represent the bulk of Libya's exports--more than 150,000 barrels a day. The move comes after the eastern faction's attempts to export oil on its own were thwarted last week by the United Nations, which blacklisted a vessel that carried oil sold by the east. Libya has fractured along sectarian and geographic lines since the 2011 ouster and death of dictator Moammar Gadhafi, with the country splitting between two governments in the east and west that have sometimes been in violent conflict. A U.N.-backed unity government has taken power in the western capital of Tripoli, though the eastern government doesn't recognize it. By Libyan law, all oil sales must go through the National Oil Co. in Tripoli, a rule backed by the U.N. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Exports
Location: Libya
People: Qaddafi, Muammar El
Company / organization: Name: United Nations--UN; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786294213
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786294213?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Forest Fire Leads to Evacuation of Neighborhoods in Northern Alberta Town; Firefighters seek to contain blaze threatening to engulf Fort McMurray, at heart of oil-sands patch
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
Abstract:
Other major oil sands producers, such as Exxon Mobil Corp. subsidiary Imperial Oil Ltd., the Canadian unit of Royal Dutch Shell PLC and Canadian Natural Resources Ltd. said their operations haven't been affected, but they are assessing the impact on local staff.
Full text: CALGARY, Alberta--More than 80,000 people fell under a mandatory evacuation order as wildfires threatened a town in northern Alberta, forcing one of Canada's largest oil-sands companies to reduce production, local authorities said Tuesday. The uncontrolled blazes prompted an evacuation of downtown Fort McMurray, including the hospital, as more than 150 firefighters battled blazes, which officials said razed parts of several residential neighborhoods, entered the downtown district and threatened a key bridge connecting the northern and southern parts of town. "We will do everything that we can to assure everybody's safety," Alberta Premier Rachel Notley said at a news conference in the provincial capital of Edmonton. No casualties or injuries were reported, but a mandatory evacuation order was issued on Tuesday for all residents. Regional officials estimated 52,000 of the town's 81,948 permanent residents were accounted for among the evacuees. The Northern Lights Regional Health Centre, the local hospital, was successfully evacuated and the most critical patients were flown to other facilities via air strips at nearby oil sands operations, the officials said. No estimates were available on the number of homes and businesses damaged or destroyed as the town braced for an expected intensification of the fire on Wednesday due to shifting winds and a forecast for hot, dry conditions. "The worst of the fire is not over," Bernie Schmitte, wildfire manager for Alberta's agriculture and forestry ministry, said at a news conference late Tuesday evening. Suncor Energy Inc., Canada's largest oil producer, said late Tuesday it was "reducing production" at all of its oil sands operations in the region due to the evacuation order's impact on employees and their families. The company, which produces about 453,000 barrels a day from its oil sands sites in northern Alberta, didn't quantify the volume or timeline for the reduction in output. Other major oil sands producers, such as Exxon Mobil Corp. subsidiary Imperial Oil Ltd., the Canadian unit of Royal Dutch Shell PLC and Canadian Natural Resources Ltd. said their operations haven't been affected, but they are assessing the impact on local staff. Canada's total oil-sands production is around 2 million barrels a day, much of which is exported to the U.S. Oil sands producers opened worker camps north of Fort McMurray to about 17,000 evacuees and flew out employees not based in the area to make room for displaced residents, Mr. Schmitte told reporters. The fires, which started late Sunday, spread from a forested area southwest of Fort McMurray and crossed the Athabasca River bisecting the town Monday. They began to threaten residential neighborhoods by midday Tuesday, prompting evacuations. Firefighters were overwhelmed by the blaze and were unable to stop it despite aerial and ground-based efforts. "I don't believe there's anything [that] could have been done with respect to firefighting that would have saved any more property," said Darby Allen, Fort McMurray's regional fire chief. The town is located in a remote area of northern Alberta surrounded by boreal forests consisting largely of jack pine and other fir trees. Southbound traffic on Highway 63, the city's main arterial road, resumed late Tuesday after being shut down earlier in the day as a precautionary measure due to the wildfires. An estimated 18,000 evacuees used the road to flee to Edmonton, about 430 kilometers (267 miles) south of Fort McMurray. Fort McMurray's airport remained open, but several flights were canceled, according to a spokeswoman. Unseasonably warm temperatures and dry weather conditions helped to ignite 35 wildfires throughout Alberta by midday Tuesday, and a provincewide fire ban is in place, according to the provincial government. David George-Cosh contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Evacuations & rescues; Oil sands; Provinces; Weather; Forest & brush fires; Press conferences
Location: Canada
People: Notley, Rachel
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Imperial Oil Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786309958
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786309958?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Ease in Asia, Extending Slide Amid Supply Fears; July Brent crude fell nine cents to $44.88 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
Abstract:
Analysts at BMI Research in a Wednesday report upgraded their forecast for Brent and Nymex crude prices, citing the prospect of production cuts by U.S. shale producers as well as by countries in the Organization of the Petroleum Exporting Countries.
Full text: Oil futures slipped in early Asian trading Wednesday, extending a week-long pullback as investors assessed the scale of the global supply glut. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $43.57 a barrel, down eight cents in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell nine cents to $44.88 a barrel. The move puts oil prices on track for a fourth consecutive session of declines. Nymex and Brent crude are both down more than 5% from their highs of the year reached last week, amid signs of persistent high production around the world and lofty inventory levels in the U.S. Elevated U.S. stockpiles, a major contributor to the nearly two-year-long oil rout, are expected to continue creeping higher. Analysts expect a rise in U.S. stockpiles by 1.2 million barrels in key data for last week from the Department of Energy due Wednesday at 10:30 a.m. ET. The rise would bring stockpiles to a new weekly record. Data from an industry group released Tuesday showed inventories rose 1.3 million barrels last week. While crude retreated from recent highs, many analysts said that production cuts spurred by low prices are likely to keep a floor under the market in the near term. Analysts at BMI Research in a Wednesday report upgraded their forecast for Brent and Nymex crude prices, citing the prospect of production cuts by U.S. shale producers as well as by countries in the Organization of the Petroleum Exporting Countries. "We remain bullish on oil prices over the next three to six months as prices remain locked in a resilient uptrend and market oversupply will continue to rebalance," the analysts wrote. They now expect Brent crude to average $46.50 a barrel this year, up from $40 earlier. They expect Nymex crude to average $46 a barrel, up from $39.50. Prices are likely to remain capped at around $55 a barrel, calling it the breakeven price for a large portion of global production, the research firm said. Elsewhere, Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--rose 0.26 cents to $1.5126 a gallon, while June diesel traded at $1.3367, 0.33 cents higher. ICE gasoil for May changed hands at $397.25 a metric ton, up $3.25 from Tuesday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Crude oil; Crude oil prices; Price increases; Futures
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786315860
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786315860?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Most Asian Stock Markets Fall Amid Renewed Weakness in Oil; BHP Billiton's shares plunge in Australia over lawsuit demanding billions for cleanup related to dam disaster in Brazil
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
Abstract: None available.
Full text: Most shares in Asia were back in the red Wednesday, with Australia slipping back below the break-even point for the year as oil prices renewed their fall and shares of Anglo-Australian BHP Billiton Ltd. plunged. The S&P/ASX 200 closed down 1.5%, its sharpest fall in a month. The losses eroded the benchmark's 2.1% jump Tuesday after the country's central bank cut the key interest rate. The S&P ASX 200, which is heavy on energy shares, is now off 0.5% for the year. It broke into positive territory for the first time this year on Tuesday. BHP Billiton's 9.4% tumble in Sydney accounted for roughly a fourth of the point decline on the broader market. It was also the sharpest one-day percentage drop for BHP in more than seven years. This followed Brazilian federal prosecutors filing a civil lawsuit Tuesday that demands mining companies--BHP Billiton, Brazil's Vale SA, and their joint-venture Samarco Mineração--shell out up to $43.55 billion for cleanup and remediation related to a catastrophic dam failure last year. Losses elsewhere in Asia included a 0.7% decline in the Hang Seng Index, and a 0.5% decline in South Korea's Kospi. The Shanghai Composite Index slipped 0.1%. "The street is back again to focusing on low global growth and looking at the crude price as a barometer here," said Gavin Parry, managing director at Parry International Trading Ltd. The weakness reflects how shaky the region's rally has been since mid-February, as global growth fears simmer in the background. During Asian overnight hours, U.S. crude oil prices declined, bringing losses in three sessions to more than 5%. That sent U.S. stock indexes lower. By early Wednesday in Asia, the fall was also weighing here--energy shares fell 5.1% in Australia and 2.2% in Hong Kong. Shares of Rio Tinto Ltd. and Fortescue Metals Group Ltd. were 7.5% and 4.9% lower, respectively. Ric Spooner, CMC Markets chief market strategist, said that "traders are becoming concerned about the possibility that the next volatile market swing, in this case downward, may not be too far away." Losses in BHP in Sydney follow a 5% plunge for the firm's London listing overnight. Early in the day, the firm said it hadn't received formal notice of the claim and remained committed to helping Samarco rebuild the community and restore the environment. Meanwhile, Japan's stock market, which tumbled for two sessions before closing for a three-day holiday, reopens Friday. That market has been especially volatile, as investors try to gauge the next steps of the Bank of Japan, which last Thursday left monetary policy unchanged. Pressuring Japanese shares is the yen, which has been at its strongest levels since October 2014. A strong currency at home generally hurts exporting companies by making their goods less competitive and eroding their repatriated earnings. "Increasing [currency] volatility resulting from central bank policies is transmitting waves of uncertainty through global markets," said Margaret Yang, market strategist with CMC Markets. "A stronger yen will probably continue to blacken the outlook for Japanese equity markets." Paul Kiernan and Robb M. Stewart contributed to this article. Write to Chao Deng at Chao.Deng@wsj.com Credit: By Chao Deng
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786358438
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786358438?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
High Anxiety: Markets Get Roiled --- Stocks and oil fall, yen strengthens as China worries and Australia rate cut set the tone
Author: Iosebashvili, Ira; Zeng, Min; Eisen, Ben
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 May 2016: C.1.
Abstract:
The 10-year break-even rate, or the yield spread between the 10-year U.S. Treasury note and the 10-year inflation-protected Treasury note, fell by about 0.04 percentage point to 1.65 percentage point, down from this year's peak of 1.72 percentage point set last week. The yen was down fractionally on Tuesday, but it remains the market's best-performing major currency in 2016, even though Japan is in trying to stave off its second recession in two years and the Bank of Japan this year shocked markets by adopting negative interest rates.
Full text: Stocks and oil futures tumbled and Japan's yen hit its highest intraday level against the dollar since October 2014, as investors struggled to reconcile recent market gains with unease over the pace of global growth. The latest tumult erupted after the Reserve Bank of Australia on Tuesday cut its benchmark rate by one-quarter of a percentage point to 1.75%. The move reflects soft inflation and economic sluggishness driven in part by weak demand from China, the largest buyer of Australian exports. Adding to concerns were a drop in Chinese manufacturing and signals that eurozone growth is slowing more than forecast, traders said. Tuesday's developments reflect worries that have shadowed a surprising 2016 recovery in the prices of stocks and many commodities. Global growth has slowed this year, prompting major forecasters to cut their outlooks. Yet in recent months the decline of the U.S. dollar and easier policy from global central banks have helped fuel gains in many riskier assets, allowing the Dow industrials to recover from a decline of as much as 10% earlier this year. The action has vexed many portfolio managers and traders, who came into the year expecting the dollar to gain against the yen and euro as the Fed prepared to further tighten its policy and its peers loosened theirs. Instead, both currencies have surged against the dollar. The dollar fell as low as 105.53 yen during trading Tuesday before retracing to 106 yen later. The dollar traded at 120 yen at the start of the year, according to CQG. The gains threaten to add to economic turmoil in the world's third-largest economy while deepening investors' anxiety. "The financial markets are on edge," said Jack McIntyre, portfolio manager at Brandywine Global Investment Management, which had $71 billion in global assets under management at the end of March. "Economic growth is still hard to come by." On Tuesday the Dow dropped 140.25 points to 17750.91, putting it down 0.1% for May. Selling was more intense in Europe, where major stock indexes fell 1.9% in Germany and 1.6% in France. Nymex crude dropped $1.13 a barrel to $43.65, while gasoline futures in New York slid 3.4% in their biggest decline since February. Gold slipped $4 to $1,291.80 an ounce and silver, one of the markets' biggest gainers in recent weeks, dropped 1%. One victim of Tuesday's reversal: wagers on higher inflation, which had risen recently amid the rebound in crude oil and signs of strength in U.S. consumer and factory prices. The 10-year break-even rate, or the yield spread between the 10-year U.S. Treasury note and the 10-year inflation-protected Treasury note, fell by about 0.04 percentage point to 1.65 percentage point, down from this year's peak of 1.72 percentage point set last week. The yen was down fractionally on Tuesday, but it remains the market's best-performing major currency in 2016, even though Japan is in trying to stave off its second recession in two years and the Bank of Japan this year shocked markets by adopting negative interest rates. Negative rates have been embraced by central bankers seeking to bump up inflation and wary of currency appreciation, which tends to slow domestic economic growth by making exports costlier. But the BOJ's move in January had the opposite effect, in part due to the yen's long-standing role as a haven currency. "The yen has defied the traditional thought process that applies to currencies," said Alvise Marino, a strategist at Credit Suisse. "The market has struggled with this." The yen's surge is one more example of how the popular trades of the past few years have reversed. Other examples include gold, which rallied 16.5% to its best quarter in three decades after three consecutive down years, and oil, which has come roaring back with a 67% rally from its lows after a sharp drop in 2015. Emerging markets, another losing trade for years, also have climbed. Speculators pushed bullish bets on the yen to records in April, according to Scotiabank and Commodity Futures Trading Commission data. In the week ended April 26, bullish positions on the yen were worth $7.47 billion, the highest level among the nine currencies tracked by Scotiabank. The latest gains come in the wake of the BOJ's unexpected decision last month to hold policy steady, wrong-footing those who expected easier policy. The BOJ has warned of the risk of a strong yen in recent years in a bid to boost growth. Goldman Sachs analysts said last month the strong yen posed an "existential challenge" to the BOJ. Japan's currency has been tough to predict for other Wall Street banks. Analysts began the year forecasting that the dollar would rise about 5% to 126 yen by midyear, according to Thomson Reuters data. At the same time, much of the yen's recent strength comes at the hands of Japan's $1.2 trillion Government Pension Investment Fund and other giant domestic institutions, analysts said. Years of government policies geared toward a weaker yen had left Japanese institutions with big holdings of foreign assets. As the Japanese currency rallies, many are rushing to trim their exposure to foreign exchange and buy more yen, said Alan Ruskin, head of G-10 foreign-exchange strategy at Deutsche Bank. --- Chelsey Dulaney contributed to this article.
Credit: By Ira Iosebashvili, Min Zeng and Ben Eisen
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: May 4, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: En glish
Document type: News
ProQuest document ID: 1786415433
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786415433?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Price Upheaval Rocks The Largest U.S. Refiners
Author: Olson, Bradley; Sider, Alison
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 May 2016: A.1.
Abstract:
Since mid-2012, shortly after two companies spun out their fuel processing units into stand-alone companies, the four best-performing energy stocks on the S&P 500 index were refiners.
Full text: U.S. refiners, which posted robust profits the last 18 months even as other parts of the oil business were racked by low crude prices, finally saw their roll come to a halt in the first quarter. Many refining businesses reported earnings for the period that were down roughly by half from a year earlier. That decline helped sour results for oil giants such as Exxon Mobil Corp., which has counted on refining to offset profit declines in energy production, and for Valero Energy Corp., the world's largest stand-alone refiner by output,which on Tuesday reported its lowest first-quarter profit in four years. "The first quarter presented us with challenging markets, with gasoline and diesel margins under pressure," said Valero Chief Executive Joe Gorder. Two trends have helped upend the refining boom: U.S. crude is no longer trading at a steep discount compared with oil from other parts of the world. And American exports of gasoline and diesel are pushing into increasingly well-supplied foreign markets. For years, U.S. refiners benefited because a bounty of oil unlocked by shale exploration was essentially landlocked in the country due to a ban on most crude exports, creating a glut that pushed down prices compared with barrels in Africa and the Middle East. That allowed U.S. refiners to turn oil into gasoline, diesel and other products more cheaply than some competitors, and enhanced their ability to export the fuels to foreign markets. Between 2010 and 2015, U.S. exports of gasoline and other fuels rose 38% to 2.8 million barrels a day, helping to reduce the nation's trade imbalance. Now that U.S. oil production is falling and the country allows crude exports, that advantage has significantly diminished. Once as high as $25 a barrel in 2011, the difference between U.S. and international crude benchmark prices now sits at a little over $1 a barrel today. New pipelines also have further smoothed out regional price differences that had benefited some American refiners by giving them greater access to landlocked oil. While refiners largely still make money,and are in better shape thanduring the industry'smost recentchallenging times in 2009, the lower returns illustrate how the price crash is finally reaching a piece of the business that had been insulated. "When prices come down as they have, refining margins hold out for a period of time, but that works its way through the system and the pressure comes back on," said Richard Forrest, a partner at consulting firm A.T. Kearney. It is hard to overstate how good the refining business has been in recent years. Since mid-2012, shortly after two companies spun out their fuel processing units into stand-alone companies, the four best-performing energy stocks on the S&P 500 index were refiners. All four companies -- including Valero, Tesoro Corp., Marathon Petroleum Corp. and Phillips 66 -- more than doubled in value. Last year, when average U.S. oil prices fell by almost half to about $45 a barrel, Valero shares rose 43%. Exxon's global network of refineries has been a critical bulwark against losses since oil prices began to tumble in the summer of 2014. That is the central rationale for the company's "integrated" structure of tapping wells, shipping crude and processing it into fuels and chemicals: When crude prices fall, refining will remain a lucrative business. Yet Exxon's profit from its refineries fell 46% to $906 million in the first quarter. Chevron's fell 48%.The totals were still enough to help keep Exxon profitable in the quarter, but Chevron posted its second-straight quarterly loss, the first time that has happened in at least two decades. On Tuesday, Valero disclosed its earnings dropped nearly 49%, to $495 million, from the first quarter of last year. Tesoro, which has large operations on the West Coast, reports on Wednesday. Along the Gulf Coast, home to more than half of the country's refining capacity, per-barrel profit margins shrank from $10.30 on average last year to $6.75 in the first three months of 2016, according to refining consultants Turner, Mason & Co. Some refiners in the Midwest cut production rates that quarter to work off extra inventory. Many analysts expect demand will come roaring back when U.S. drivers emerge from winter malaise and take to the road for summer trips. Refiners say they are already seeing signs of a coming strong driving season.The U.S. Energy Information Administration has predicted domestic gasoline demand will grow 1.4% this year after rising 2.7% last year. "Strong demand and too much crude is great for refiners," Wolfe Research LLC analyst Paul Sankey wrote in a research note last month. The caveat: "It has to be said we are dependent on driving season showing up in a big way," he added. But even if predictions for a profitable summer prove true, refining mightn't be able to keep propping up earnings for companies that both produce oil and consume it in plants that churn out gasoline and diesel. Drivers in the U.S. raced to buy gas-guzzling trucks and SUVs last year when fuel prices first started to fall, helping to push demand for gasoline up last year. But the average vehicle sold today is significantly more efficient than just a few years ago, according to the University of Michigan's Transportation Research Institute, which tracks fuel economy. For the past year and a half, low crude prices have encouraged refiners to buy oil and produce more fuel than the world needs, said Robert Campbell, head of oil products research at consultants Energy Aspects. That has led to a buildup of fuel inventory globally, which could cut into refining margins later this year as crude prices start to recover. "We'll go back to having an excess of refining capacity, which was the problem prior to the fall in oil prices," he said. --- Douglas Kobin contributed to this article.
Credit: By Bradley Olson and Alison Sider
Subject: Crude oil prices; Petroleum industry; Company reports
Location: United States--US
Company / organization: Name: Valero Energy Corp; NAICS: 486210, 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Classification: 8510: Petroleum industry; 3100: Capital & debt management; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: May 4, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786422365
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786422365?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Halliburton, Baker Strategies Differ --- The two oil-field services providers diverge in wake of terminated merger
Author: Sider, Alison; Steele, Anne
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 May 2016: B.3.
Abstract:
Though he said he didn't hear the comments by the chief executive of the company he had planned to combine with, now a rival, Mr. Lesar said he believes the best way to prepare for a rebound in oil-field activity is to work in every shale formation, offering a full suite of services.
Full text: Halliburton Co. and Baker Hughes Inc. are taking sharply divergent paths after recently calling off a merger, once valued at $35 billion, due to regulatory opposition. Halliburton Chief Executive Dave Lesar said Tuesday in his first live remarks since the failed merger was announced Sunday that his company still wants to be a one-stop-shop for exploration and production companies, and said it would seek other ways to grow and increase its reach worldwide. "If we had been successful, adding the Baker Hughes assets would have given us that scale quickly," Mr. Lesar said in a conference call. "But our strategy has not changed." That was in contrast to remarks Tuesday from Baker Hughes Chief Executive Martin Craighead, who said his company plans a more specialized business model, pulling back from some markets and services such as fracking in the U.S., to focus on developing and selling new technologies. "There are certain markets where certain product lines frankly aren't earning their right to play," he said. Halliburton and Baker Hughes called off their merger after the deal encountered regulatory pressure on several continents. The second and third largest oil-field services providers had hoped to join forces to challenge Schlumberger Ltd., their largest rival. Mr. Lesar said the companies knew they would face scrutiny from regulators and believed that trying to acquire Baker Hughes was worth the risk. Obtaining U.S. antitrust approval for large, complex transactions in any industry has become more difficult in recent years, he said. And the sudden, sharp drop in oil prices made it hard to divest businesses and eroded the potential benefit from the deal. "The unprecedented deterioration of the oil and gas industry decimated the economics of the deal," Mr. Lesar said. On Tuesday, Halliburton reported a loss of $2.41 billion, or $2.81 a share, for the first three months of the year. The company's quarterly loss widened from $643 million, or 76 cents a share, a year earlier, because of drastically lower revenue from its North American business and charges from the failed Baker Hughes tie-up. Excluding special items, adjusted earnings from continuing operations were 7 cents a share. Total revenue slid 40% to $4.2 billion. The company said it recorded Baker Hughes acquisition-related costs of $378 million, or 44 cents a share, in the quarter. Halliburton previously had said it recorded companywide charges related to asset impairments and severance costs of about $2.1 billion, or $2.39 a share, in the first quarter. Baker Hughes on Monday said it would use its $3.5 billion break-up fee to shore up its balance sheet, buying back stock and debt. The company plans to scale back on hydraulic fracturing work in the U.S., which Mr. Craighead said has become commoditized, with customers unwilling to pay for better service or technology. Baker Hughes also said it would step up its work selling equipment and technology to other companies, particularly in international markets. "We will be more selective and creative as we look at opportunities for our product lines globally," Mr. Craighead said. Though he said he didn't hear the comments by the chief executive of the company he had planned to combine with, now a rival, Mr. Lesar said he believes the best way to prepare for a rebound in oil-field activity is to work in every shale formation, offering a full suite of services. "If you are an integrated company, you essentially can't pick and choose where you provide, who you provide it to, where you operate and what customers you work for," Mr. Lesar said. Credit: By Alison Sider and Anne Steele
Subject: Hydraulic fracturing; Oil service industry
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: May 4, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786422450
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786422450?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
What It Takes for Royal Dutch Shell to Break Even; Higher debt will only mean more jitters if oil's recent rally starts to fade
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
Abstract:
First-quarter cash flow, at about $4.6 billion adjusted for working capital movements, was weak.
Full text: Royal Dutch Shell sees itself as the Mario Draghi of oil companies. While rivals set themselves specific goals for navigating around low oil prices, Shell will simply do "whatever it takes," as finance boss Simon Henry said Wednesday, to balance the books. Rather like Mr. Draghi , Shell may find it needs to do more, for longer than expected. With oil averaging $34 a barrel in the first quarter, Shell's earnings were unsurprisingly ugly. But there were nuggets of good news: the company is managing to integrate BG quickly , without a meaningful increase in its cost base. It should see cost savings more quickly, keep operating expenses "lower forever" at $40 billion this year, and expects reduced investment of $30 billion this year. But there is a long way to go from this starting point before Shell can cover its investment and dividends through operating cash flow, the Holy Grail of the sector. First-quarter cash flow, at about $4.6 billion adjusted for working capital movements, was weak. It fell well short of covering $6.1 billion in capital expenditure, excluding outlays on the BG deal. And that spending was 20% below the run-rate implied by Shell's full-year guidance. Big picture: investment spending looks set to rise in subsequent quarters, while some cash flow uplift (although helped by growth from BG) rests on vast, problematic projects like Gorgon and Kashagan finally starting to produce later this year. Price would be the biggest aid, but a quarterly average at today's Brent crude price would mean an extra $1 billion in cash flow, compared with the first quarter, not enough to bridge the gap. Shell's definition of balance seems a little shaky. It put its cash flow break-even price at $55 a barrel last year. But leaving aside help from asset sales, it would have been closer to $70 a barrel. With sale proceeds now explicitly earmarked for debt reduction , Shell can't really count on that to help balance its $30 billion planned investment and $15 billion in total dividends. And reduce debt it must. Net debt to total capital jumped to a higher-than-expected 26% after the BG deal. True, about 3 percentage points of that was unexpected accounting changes and a one-off payment. But it leaves Shell with an uglier headline number, which is set to rise this year before it starts to fall. Higher debt will only mean more jitters if oil's recent rally starts to fade. Like Mr. Draghi's pledge, Shell's aspiration is laudable. The reality still just looks like hard work. Write to Helen Thomas at helen.thomas@wsj.com Credit: By Helen Thomas
Subject: Investments; Cost control; Debt management
People: Henry, Simon
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786513093
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786513093?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Dollar Extends Rally Despite Mixed Data; U.S. currency strengthens on drop in oil prices
Author: Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
Abstract: None available.
Full text: The dollar extended its rally for a second day Wednesday despite mixed economic data. The WSJ Dollar Index, which measures the buck against a basket of 16 currencies, rose 0.4% to 85.70 after falling to a one-year low earlier in the week. The dollar rose 0.4% to ¥107.03. The dollar rose 1.2% against the Canadian dollar to C$1.2881. The dollar began to rally Tuesday, boosted by a sharp drop in oil prices . Analysts also said investors are moving to cover their short bets on the buck, pushing the dollar higher. Investors have become increasingly bearish on the dollar in recent weeks amid slower-than-expected first quarter economic growth and the Federal Reserve's continued cautiousness to raise interest rates. Higher rates make the dollar more attractive to yield-seeking investors. Brian Daingerfield, a currency strategist at RBS Securities, said he doesn't think the dollar's rally will stick until economic data is consistently strong and the Fed sounds a more upbeat tone on the economy. "Since we haven't seen that I'm hesitant to say this is a turning point for the dollar," he said. Economic data Wednesday painted a mixed picture of the U.S. economy. A report from Automatic Data Processing Inc. showed private payrolls across the U.S. rose by 156,000 last month , below the 196,000 jobs economists surveyed by The Wall Street Journal had expected. Another report showed that the U.S. service sector saw stronger growth in April, signaling momentum in the broader economy. The reports come ahead of Friday's closely watched nonfarm payrolls report. Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com Credit: By Chelsey Dulaney
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786543752
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786543752?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canada Wildfires Force Evacuation, Hampering Oil-Sands Operations; Rapid spread of Alberta blaze prompts evacuation of Fort McMurray, hub of country's oil-sands industry
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
Abstract:
CALGARY, Alberta--Raging forest fires in Canada's oil-rich province of Alberta forced the evacuation of nearly 80,000 people, devastating the remote town at the hub of the country's oil-sands industry and threatening to further burden a sector already plagued by low energy prices. Royal Dutch Shell PLC's Canadian unit halted its oil-sands mining operations, which produce about 250,000 barrels a day, to speed evacuations of people who fled to the site, which is about 60 miles north of the fires.
Full text: CALGARY, Alberta--Raging forest fires in Canada's oil-rich province of Alberta forced the evacuation of nearly 80,000 people, devastating the remote town at the hub of the country's oil-sands industry and threatening to further burden a sector already plagued by low energy prices. Some 76,000 people evacuated from Fort McMurray, 270 miles north of Alberta's capital Edmonton, to shelters hundreds of miles north and south of the town, officials said, revising an earlier estimate of 88,000. "We had a devastating day yesterday and we're preparing for a bad day today," said Darby Allen, the town's regional fire chief, at a news briefing Wednesday. He said there were no known casualties or injuries. The uncontrolled blaze shut down one major oil-sands mining operation on Wednesday and forced another to curtail production. Other operators have evacuated nonessential personnel to make room for thousands of evacuees who fled the disaster and sought refuge in camps designed to house temporary workers. Firefighters working through Tuesday night extinguished all building fires by early morning, but local officials said nearly 25,000 acres around Fort McMurray were ablaze and that the downtown remains at risk for new fires. "This is a very complex fire with multiple fronts and explosive conditions," said Bernie Schmitte, wildfire manager for Alberta's agriculture and forestry ministry. Officials said the cause of the fire, which they are calling Horse Creek, is being investigated to determine whether any human role or some other cause, such as lightning, triggered the blaze. Most residents were informed about the mandatory evacuation on Tuesday afternoon and had only 30 minutes to prepare. "Residents were advised to grab what they could and go," said Mr. Darby, the fire chief. "We didn't factor in people taking family heirlooms." Provincial officials said about 1,600 buildings have been damaged by the fire, which burned parts of several housing subdivisions and some structures in the town center. The town of Fort McMurray became the symbol of Canada's oil boom the last decade, attracting some of the world's biggest energy producers amid a rush to build megaprojects to extract nearby oil sands. Thanks to the influx of investment from producers such as Shell and Exxon Mobil, thousands flocked to "Fort McMoney" as the city spent millions building heated bus shelters, schools, bridges and hockey arenas to accommodate its rapidly growing and affluent population. Thanks to the oil boom, Fort McMurray's average household income hit C$186,782 (about $148,500) in 2013, the highest of any Canadian city. But since then, thousands of workers have been laid off due to the oil-price slump and according to the national statistics agency the town's unemployment rate hit 9.8% in March, double the rate of five years ago. Now, the town faces the grim task of rebuilding at a time when its biggest industry has been challenged by high extraction costs and low oil prices. The premier of Alberta, Rachel Notley, on Wednesday expressed hope that Fort McMurray would rebound from the damage. "Our province is strong and we will get through this. Albertans have proven time and time again that when disaster strikes, we come together and we find the solutions and we get through it," she said. Like some 10,000 other displaced residents, the mayor of Fort McMurray, Melissa Blake, stayed overnight Tuesday at an oil-sands camp with her husband and another family, sharing a room with a single bed. "The reality is setting in about how significant and serious the loss is," Ms. Blake told reporters. "We have been a community fighting an uphill battle for a long time in terms of the rate of changing growth that we've been experiencing." The evacuation is the largest in Alberta's history, forcing residents in more than 12 northern communities including Fort McMurray to leave their homes, according to the Canadian Red Cross. The Red Cross set up a toll-free number to help evacuees connect with family members. Across the province, many private citizens opened their homes to those fleeing the fires, officials said. The rapid spread of the blaze has started to affect operations at major oil-sands productions sites. The oil-sands facilities aren't directly threatened by the uncontrolled forest fires, but mandatory evacuations of workers have brought some operations to a halt. Royal Dutch Shell PLC's Canadian unit halted its oil-sands mining operations, which produce about 250,000 barrels a day, to speed evacuations of people who fled to the site, which is about 60 miles north of the fires. A spokesman didn't provide an estimate for how long the shutdown is expected to last. Suncor Energy Inc., Canada's largest oil producer, said late Tuesday that it reduced production at all of its oil-sands operations due to the forced evacuations. It also said that none of its operations were in the path of the forest fires. Exxon Mobil Corp.'s Canadian unit, Imperial Oil Ltd., said it was evacuating nonessential employees but that production hasn't been affected "at this time," according to a spokeswoman. Inter Pipeline said it partially closed its 540,000 barrel-a-day Polaris pipeline system and its 346,000 barrel-a-day Corridor system. Related to Inter Pipeline's moves, producer Husky Energy Inc. said it cut output at its Sunrise oil- sands plant by two-thirds, to 10,000 barrels a day. Western Canadian Select, the benchmark Canadian heavy crude oil, traded Wednesday at $12.84 a barrel below the benchmark U.S. price, according to FactSet. That is the highest price relative to the U.S. price since March 1, with the price difference between the two contracts is 73 cents narrower than Tuesday. Canada's total oil sands production is around 2 million barrels a day, much of which is exported to the U.S. The fires, which started late Sunday, spread from a forested area southwest of Fort McMurray and crossed the Athabasca River bisecting the town Monday. They began to threaten residential neighborhoods by midday Tuesday, prompting evacuations. Officials said the town has been vacated by all but firefighting and public safety personnel, but first responders continued to check housing subdivisions and public buildings downtown for any remaining people, using door knocks, bullhorns and patrols by emergency vehicles. Dozens of pets left behind by their owners were taken to a local community center awaiting their owners, they said. Southbound traffic on Highway 63, the city's main arterial road, resumed late Tuesday after being shut down earlier in the day as a precautionary measure due to the wildfires. An estimated 18,000 evacuees used the road to flee to Edmonton. David George-Cosh and Paul Vieira contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil sands; Forest & brush fires; Northern communities
Location: Canada
People: Trudeau, Justin
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786589855
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786589855?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Photos: Alberta Wildfires Force Evacuation of Canada Oil Sands Hub
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
Abstract:
Smoke fills the air Tuesday in Fort McMurray, located in a remote area of northern Alberta surrounded by boreal forests consisting largely of jack pine and other fir trees.
Full text: Town of Fort McMurray, Alberta, evacuated Tuesday as uncontrolled forest fires spread through oil-sands region Flames from an uncontrolled, and rapidly spreading, wildfire as seen from Highway 63 outside Fort McMurray, Alberta, on Tuesday. Flames rise Tuesday in south of Fort McMurray, a remote community in Alberta that serves as the gateway to Canada's oil sands region. The fires, as seen outside Fort McMurray on Tuesday, started late Sunday and spread from a forested area southwest of the town. They began to threaten residential neighborhoods by midday Tuesday, prompting a forced evacuation of the entire town. Smoke fills the air Tuesday in Fort McMurray, located in a remote area of northern Alberta surrounded by boreal forests consisting largely of jack pine and other fir trees. A wildfire burns Tuesday along Highway 63 in Fort McMurray, which is about 430 kilometers (267 miles) north of Edmonton, Alberta. 'The worst of the fire is not over,' Bernie Schmitte, wildfire manager for Alberta's agriculture and forestry ministry, said at a news conference late Tuesday. The entire town of Fort McMurray, Alberta, has been under a mandatory evacuation order since Tuesday, forcing some 80,000 residents from their homes. Long traffic lines formed Tuesday outside Fort McMurray, Alberta, as residents were forced to leave. Crystal Maltais prepares her family to leave Conklin, Alberta, for Lac La Biche after evacuating their home in Fort McMurray on Tuesday. Evacuees from Fort McMurray line up to register at an evacuee reception center in Anzac, Alberta, on Wednesday. [Interactive content available online]
Subject: Provinces; Oil sands
Location: Canada Edmonton Alberta Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
Section: Interactives
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786622687
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786622687?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Price Drop Vanquishes Cutting-Edge Projects; Complex and expensive ideas once held out as industry's future fall to cost-cutting pressures
Author: Kent, Sarah; Stewart, Robb M
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
Abstract: None available.
Full text: The world's largest energy companies are sidelining big ideas that they touted just a couple of years ago as the future of the industry. From Australia to the U.S. Gulf Coast, the casualties include ultra-deep-water drilling projects, huge boats that serve as floating liquefied natural gas factories and technology that could drastically reduce emissions from burning fossil fuels. Royal Dutch Shell PLC, Chevron Corp. and Australia's Woodside Petroleum Ltd. are among the big companies to pull back or delay ambitious projects. Shell hammered home the message on Wednesday after reporting first-quarter profits that were down 83% from the same period a year before. The Anglo-Dutch oil giant said it would cut its capital spending budget another 10%, to $30 billion this year. "To be brutally honest, any large new greenfield investment whether floating LNG, deepwater or elsewhere is under very strict critical review for cost levels and return simply because of where the industry is," Shell Chief Financial Officer Simon Henry said in a conference call. As of March, the oil industry has deferred or canceled $270 billion in projects since crude prices began crashing nearly two years ago, according to estimates from Norway-based consultancy Rystad Energy. The bulk of those spending cuts have involved high-tech projects once seen as crucial to sustaining global energy supplies. Related Reading * Shell Targets Spending as Profit Plunges 83% * Oil Price Upheaval Finally Hits Refiners * Schlumberger Cuts Another 2,000 Jobs As Profit Fell 49% It is a dramatic turnaround from the last decade when surging demand for oil and dwindling resources sent crude prices soaring and big energy companies pushing into new frontiers regardless of the cost. According to information and analytics firm IHS Inc., the oil-and-gas industry spent about 15% less on research and development in 2015, when crude oil prices averaged roughly $50 a barrel, compared with 2014, when prices averaged close to $100 a barrel. "We see a pullback from customers on really complex projects," said Kishore Sundararajan, chief technology officer at GE Oil & Gas, General Electric Co.'s energy industry services division. Efforts to re-create the U.S. shale boom abroad have also suffered. The volumes unleashed by the technique of hydraulic fracturing are largely to blame for the current market downturn, but exporting the technique abroad have been stalled by political, geological and technical reasons, compounded by slumping energy prices. Now, the focus increasingly is on technologies that can reduce costs and improve efficiency as the world's biggest oil companies continue to slash billions from their budgets and cut thousands of jobs. ConocoPhillips last week said it would reduce spending by a further $700 million this year, drawing about half the savings from a decision to forgo deep-water drilling in the Gulf of Mexico. In March, Exxon Mobil Corp. announced plans to cut its capital spending 25% in 2016 and said it would be "highly selective" about investments. BP last month raised the prospect that it could pull back spending further if the oil market remains under pressure next year. Prices have risen to their highest levels this year, with Brent crude, the international benchmark, reaching $48.50 a barrel at the end of April. Even so, companies remain cautious on returning to complex and expensive new areas. "We wouldn't be looking to significantly ramp up [even] if we see oil prices come back up to $60 a barrel," BP CFO Brian Gilvary told analysts in April. "We're really looking at what we can do around the margins of the existing portfolio." Among the most high profile victims of the price crash are floating LNG plants--huge ships that are essentially seafaring factories built to exploit remote gas fields. Natural gas was long transported only by pipeline; LNG plants turn the gas to a liquid, allowing for shipment to markets around the world. Woodside Petroleum last month shelved plans for a floating operation at its Browse field off Australia's western coast that analysts estimated would have cost about $40 billion. The company says it still favors floating LNG, but it isn't going to happen in the current market environment. Work on such floating gas factories has been under way since the early 1990s, but there still isn't one in operation. Slumping prices and a looming oversupply of natural gas is gradually killing off nascent plans for further projects. "Big heavy capital projects at the moment are not in favor and so putting huge amounts of money into that at the moment is probably not the wisest thing to do," Woodside Chief Executive Peter Coleman said in April. Costly efforts to make the oil sector more environmentally friendly through carbon capture and storage also are vulnerable to the oil price slump. Known as CCS, the projects grab carbon dioxide released from industrial processes and funnel it underground. Such CCS projects are seen by many energy-sector analysts as crucial to preventing catastrophic climate change, and many in the industry have also been vociferous advocates of the technology. Shell and Chevron are leading ambitious projects in Canada and offshore of Australia, respectively. But follow-on projects in the oil sector have been slow to get off the ground. CCS remains expensive and often dependent on government subsidies. Shell last year scrapped a proposal for a plant in the U.K. after the government withdrew £1 billion in support. The low oil price puts additional pressure on any new project. "It is still early days for these types of projects and they are costly," Chevron CEO John Watson said in Perth last month. In the deep waters of the Gulf of Mexico, oil companies are examining new opportunities warily. Chevron wrote off $500 million last year after it canceled its Buckskin-Moccasin development project in the region. BP has yet to make a final decision on whether to proceed with the much-delayed second phase of a project that taps oil and gas reserves at depths of 4,500 feet. Of course, not every big project is being put off. But those getting the go-ahead are taking cost cuts. For instance, BP has said it still expects to go ahead with its so-called Mad Dog project in the Gulf but believes more savings are possible. It has already squeezed around 50% from the cost of early plans that involved a customized design and came in at around $20 billion. Shell opted to move ahead with its Appomattox project, targeting production of 175,00 barrels of oil equivalent a day from a depth of 7,200 feet in the Gulf of Mexico--one of a handful of developments to get approval last year--after bringing down costs by 20%. The company's giant Prelude floating LNG tanker, currently under construction, will likely be one of the first to test the technology. The project offshore Australia is expected to be in production by 2018. Write to Sarah Kent at sarah.kent@wsj.com and Robb M. Stewart at robb.stewart@wsj.com Credit: By Sarah Kent and Robb M. Stewart
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786660024
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786660024?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Williams Cos. Swings to Loss, Discloses Job Cuts; Pending acquisition by Energy Transfer grows more contentious amid challenges posed by oil slump
Author: Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 May 2016: n/a.
Abstract:
Williams Cos. swung to a first-quarter loss and the pipeline company's chief executive disclosed additional cost cuts, including reducing its workforce by 10%.
Full text: Williams Cos. swung to a first-quarter loss and the pipeline company's chief executive disclosed additional cost cuts, including reducing its workforce by 10%. The Tulsa, Okla., company is in the process of being acquired in a $32.6 billion deal by Energy Transfer Equity LP, which along with affiliate Energy Transfer Partners LP posted lower revenue for the three-month period ended in March. Williams Chief Executive Alan Armstrong said in prepared remarks that the company made additional cost-cutting decisions at the end of the first quarter to help offset a commodities rout that has reduced demand from energy producers. The pending deal between Energy Transfer and Williams, which has been contentious from the start, has become more challenging as low oil prices have made it difficult for pipeline companies to raise money. Most recently, the companies are in a legal dispute over private shares that the buyer in the deal, Energy Transfer Equity, issued to help finance the merger. Last month, Williams sued Energy Transfer Equity over the offering of convertible units. Energy Transfer, which previously said Williams had breached the merger agreement, disclosed a countersuit against Williams in a regulatory filing earlier Wednesday. Energy Transfer accused Williams of a material breach of the deal, citing Williams's attempt to block the convertible units offering as well as Williams's related suit against Energy Transfer Chief Executive Kelcy Warren in a Texas court. In its first-quarter release, Williams said its board is unanimously committed to enforcing its rights under the merger deal, while Energy Transfer didn't comment on the pending deal in its earnings report. Over all, Williams Cos. reported a loss of $65 million, or 9 cents a share, compared with a year-earlier profit of $70 million, or 9 cents a share. Excluding one-time items, per-share earnings from continuing operations fell to 3 cents from 16 cents. Analysts polled by Thomson Reuters expected per-share profit of 22 cents Energy Transfer Equity reported a profit of $312 million, or 30 cents a common unit, up from $284 million, or 26 cents a unit, a year earlier. The latest period included a tax benefit of $55 million. Revenue decreased 23% to $7.98 billion. Analysts polled by Thomson Reuters expected per-unit profit of 29 cents and revenue of $10.28 billion. Energy Transfer Partners reported a profit of $311 million, up from $281 million a year earlier. On a per-unit basis, which reflects general partner interests, the per-unit loss was 15 cents, compared with a year-earlier per-unit loss of 17 cents. Revenue slumped 56% to $4.48 billion. Analysts expected per-unit profit of 26 cents and revenue of $7.58 billion. Write to Tess Stynes at tess.stynes@wsj.com Credit: By Tess Stynes
Subject: Financial performance; Earnings; Corporate profits; Equity
People: Warren, Kelcy
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Williams Cos Inc; NAICS: 486910, 517110, 523130, 325312, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 4, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786684462
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786684462?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Photos: Alberta Wildfires Force Evacuation of Oil-Sands Hub
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
Forest fires continued to rage in the oil-rich province as a mandatory evacuation order for areas near the hub of the country's oil-sands industry widened and key transportation routes remained closed.
Full text: Town of Fort McMurray, Alberta, evacuated as uncontrolled forest fires spread through oil-sands region A Royal Canadian Mounted Police officer surveys the damage on a street in Fort McMurray, Alberta, on Wednesday. Forest fires continued to rage in the oil-rich province as a mandatory evacuation order for areas near the hub of the country's oil-sands industry widened and key transportation routes remained closed. Royal Canadian Mounted Police officers wear masks to protect themselves from smoke from nearby wildfires while directing traffic at a roadblock near Fort McMurray. Wildfires burn near neighborhoods in Fort McMurray in this aerial photo provided by the Canadian Armed Forces. Officers look on near Fort McMurray as smoke from the wildfires billows into the air on Wednesday. Flames rise in Fort McMurray. Nearly 80,000 people in the area have been evacuated to shelters. Strathcona County, Alberta firefighters take a break in Fort McMurray in this photo posted on Twitter on Thursday. Evacuees from the Fort McMurray wildfires use the sleeping room at the "Bold Center" in Lac la Biche, Alberta, on Thursday. An evacuee puts gas in his car on his way out of Fort McMurray. Alberta Premier Rachel Notley speaks to the media after visiting residents of Fort McMurray who had assembled in a community center in Anzac. A helicopter, left, flies past thick smoke while battling a forest fire outside of Fort McMurray. Volunteers help carry food into a community center in Anzac. A wildfire moves towards the town of Anzac from Fort McMurray on Wednesday. Alberta declared a state of emergency Wednesday as crews frantically held back wind-whipped wildfires. Long traffic lines formed Tuesday outside Fort McMurray as residents were forced to leave. Crystal Maltais prepares her family to leave Conklin, Alberta, for Lac La Biche after evacuating their home in Fort McMurray on Tuesday. [Interactive content available online]
Subject: Oil sands; Provinces; Mounted police
Location: Canada
People: Notley, Rachel
Company / organization: Name: Canadian Forces; NAICS: 928110; Name: Royal Canadian Mounted Police; NAICS: 922120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Interactives
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786725291
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786725291?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Futures Rally in Asia, Shrugging off Inventory Rise; July Brent crude rose $0.70, or 1.6%, to $45.32 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
[...]coordinated supply cuts by members of the Organization of the Petroleum Exporting Countries have been elusive, and much of the world remains awash in oil.
Full text: Oil futures rallied in early Asia trading Thursday, shrugging off a rise in U.S. crude stockpiles and focusing on the prospect of tightening supply. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June gained $0.86, or 2%, to $44.64 a barrel in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose $0.70, or 1.6%, to $45.32 a barrel. The rebound followed a quiet session in New York that registered a modest move in crude prices despite a government report showing another hefty increase in U.S. crude-oil stockpiles. The report underscored the persistence of supply glut in the world's biggest oil consumer. Analysts attributed Thursday's rally in part to production outages in Canada, where wildfires in northern Alberta forced oil-sands companies to shut down or slow operations. "Some big names have made announcements that they will be halting operations," said Nelson Wang, oil and gas analyst at brokerage CLSA in Hong Kong. He said the outages could force refiners in the U.S. who import Canadian oil to turn elsewhere for crude. "If [supplies] to the U.S. are reduced, that means the U.S. has to import more ... It does have an impact on global supply and demand." Thursdays gains extends a months-long rally in oil prices, which are up by more than half from their lows earlier in the year. Expectations that major producers, from shale drillers in the U.S. to big exporters like Saudi Arabia, would curb production have pulled oil prices out of their early-year doldrums. But coordinated supply cuts by members of the Organization of the Petroleum Exporting Countries have been elusive, and much of the world remains awash in oil. Last week, U.S. oil stockpiles rose 2.8 million barrels, more than double the rise forecast by analysts in a survey by The Wall Street Journal. Gasoline stockpiles also rose unexpectedly, sending combined oil and fuel stockpiles to a record high of 1.37 billion barrels, according to the U.S. Energy Information Administration. In refined product markets, Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--rose 2.18 cents to $1.5084 a gallon, while June diesel traded at $1.3473, 1.91 cents higher. ICE gasoil for May changed hands at $400.25 a metric ton, up $6.00 from Wednesday's settlement. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Supply & demand; Gasoline; Crude oil prices; Price increases
Location: United States--US Asia Canada New York
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786730923
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786730923?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
What It Takes for Royal Dutch Shell to Break Even; Higher debt will only mean more jitters if oil's recent rally starts to fade
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
First-quarter cash flow, at about $4.6 billion adjusted for working capital movements, was weak.
Full text: Royal Dutch Shell sees itself as the Mario Draghi of oil companies. While rivals set themselves specific goals for navigating around low oil prices, Shell will simply do "whatever it takes," as finance boss Simon Henry said Wednesday, to balance the books. Rather like Mr. Draghi , Shell may find it needs to do more, for longer than expected. With oil averaging $34 a barrel in the first quarter, Shell's earnings were unsurprisingly ugly. But there were nuggets of good news: the company is managing to integrate BG quickly , without a meaningful increase in its cost base. It should see cost savings more quickly, keep operating expenses "lower forever" at $40 billion this year, and expects reduced investment of $30 billion this year. But there is a long way to go from this starting point before Shell can cover its investment and dividends through operating cash flow, the Holy Grail of the sector. First-quarter cash flow, at about $4.6 billion adjusted for working capital movements, was weak. It fell well short of covering $6.1 billion in capital expenditure, excluding outlays on the BG deal. And that spending was 20% below the run-rate implied by Shell's full-year guidance. Big picture: investment spending looks set to rise in subsequent quarters, while some cash flow uplift (although helped by growth from BG) rests on vast, problematic projects like Gorgon and Kashagan finally starting to produce later this year. Price would be the biggest aid, but a quarterly average at today's Brent crude price would mean an extra $1 billion in cash flow, compared with the first quarter, not enough to bridge the gap. Shell's definition of balance seems a little shaky. It put its cash flow break-even price at $55 a barrel last year. But leaving aside help from asset sales, it would have been closer to $70 a barrel. With sale proceeds now explicitly earmarked for debt reduction , Shell can't really count on that to help balance its $30 billion planned investment and $15 billion in total dividends. And reduce debt it must. Net debt to total capital jumped to a higher-than-expected 26% after the BG deal. True, about 3 percentage points of that was unexpected accounting changes and a one-off payment. But it leaves Shell with an uglier headline number, which is set to rise this year before it starts to fall. Higher debt will only mean more jitters if oil's recent rally starts to fade. Like Mr. Draghi's pledge, Shell's aspiration is laudable. The reality still just looks like hard work. Write to Helen Thomas at helen.thomas@wsj.com Credit: By Helen Thomas
Subject: Investments; Cost control; Debt management
People: Henry, Simon
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786759857
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786759857?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Fading Oil Rally Keeps a Lid on U.S. Stocks; Investors have been cautious on risky assets for most of the week
Author: Josephs, Leslie; Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
First-quarter profits for S&P 500 companies are on track to fall 7.1% in the first quarter from a year earlier, according to FactSet.
Full text: Energy shares rallied Thursday, but major U.S. stock indexes were little changed ahead of a key reading on U.S. employment. Investors have been cautious for most of the week, questioning the strength of a recent rally amid a gloomy earnings season and tepid global growth. One sign of investors' trepidation about the market and economy is that haven assets have remained strong. Gold prices, for example, are up 20% this year, while the yield on the 10-year Treasury note is off 0.5 percentage point so far this year. On Thursday, the yield on the 10-year note fell to 1.756%, from 1.786% on Wednesday. Bond prices rise as yields fall. The monthly U.S. jobs report, which is due Friday, will give investors an update on the U.S. economy and could shape expectations about the Federal Reserve's interest-rate policy outlook. Meanwhile, energy shares in the S&P 500 gained 0.7% Thursday as oil prices climbed . U.S. crude oil breached $46 a barrel, the fourth session in which it has risen above that level this year, but the rally faded throughout the afternoon and prices settled up 1.2% at $44.32 a barrel. The gains came amid threats to output in Libya, where there is political infighting, and Canada, where several oil-sands companies are shutting down or slowing operations because of fires in Alberta. However, analysts still caution that the rally might not be sustainable, with oil stockpiles hovering around record highs world-wide. The rise in energy shares wasn't enough to counter weakness elsewhere, such as in consumer-discretionary companies in the S&P 500, which fell 0.6%. Today's Highlights * Proposed Rule Would Allow Consumers to Sue Banks * In Puerto Rico's Debt Crisis, Shades of Argentina * Is Taxing Harvard, Yale and Stanford the Answer to Rising College Costs? "There's nothing good [today] other than the fact that oil prices are higher," said Ilya Feygin, managing director at broker WallachBeth. The S&P 500 fell 0.49 point to 2050.63. The Dow Jones Industrial Average rose 9.45 points, or 0.1%, to 17660.71, its smallest gain since November. The Nasdaq Composite fell for a third session in a row, losing 8.55, or 0.2%, to 4717.09. "Conviction on anything is very low," said David Hussey, a managing director at Manulife Asset Management. L Brands was the biggest laggard in the S&P 500, dropping $9.65, or 12%, to $70.53. Shares of the Victoria's Secret parent posted their biggest one-day percentage drop since February 2009, after the company reported lower-than-expected sales growth . Tesla Motors fell 11.03, or 5%, to 211.53 after the electric-car maker late Wednesday said its first-quarter loss nearly doubled from a year ago . Kraft Heinz gained 2.99, or 3.7%, to 82.97 after the packaged-food company reported a higher quarterly profit . Merck lost 72 cents, or 1.3%, to 54.09 after the pharmaceutical company posted a decline in quarterly revenue . First-quarter profits for S&P 500 companies are on track to fall 7.1% in the first quarter from a year earlier, according to FactSet. It would be the fourth-consecutive decline. That slump could boost stocks later in the year because companies will have a lower bar to compare their results against, said Rob Sharps, a portfolio manager at T. Rowe Price Group. But stocks could fall in the near term amid continued concerns about the global economy and weak corporate profits, he said. "I don't think we're up and away from here," Mr. Sharps said. The Stoxx Europe 600 index rose 0.3% to 332.86. Optimism over oil's early rally outweighed news of a slowdown in growth in China's services sector. Riva Gold contributed to this article. In the Markets * Oil Rallies on Output Threats in Canada, Libya * Asian Shares Mostly Lower After China Services Data * Dollar Rises Ahead of U.S. Jobs Report * U.S. Government Bonds Rebound * Gold Gives Up Gains * Copper Prices Fall on China Concerns Write to Leslie Josephs at leslie.josephs@wsj.com and Timothy Puko at tim.puko@wsj.com Credit: By Leslie Josephs and Timothy Puko
Subject: Financial performance; Corporate profits; Prices; Investments
Location: United States--US
Company / organization: Name: L Brands Inc; NAICS: 424210, 448120; Name: Tesla Motors Inc; NAICS: 336999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786762102
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786762102?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Pulls Back After Approaching 2016 Highs; Fires in Canada and reports of fresh tension in Libya outweigh rise in U.S. stockpiles
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
More * Rally in Crude Boosts Markets This year's forest fires forced the evacuation of nearly 80,000 people, devastating the remote town at the hub of the country's oil-sands industry.
Full text: U.S. oil briefly reached some of its highest prices of the year Thursday as Canadian wildfires threatened a major oil producer, but the rally faded throughout the day with traders still confident of heavy stockpiles. U.S. oil breached $46 a barrel for only the fourth time in 2016 and the day's gains have rivaled some of the largest in the last month. The jolt helped revive a rally that has brought oil's sharpest gains in years, but analysts and traders kept up their warnings of oversupply that has tugged that rally back throughout the week. Light, sweet crude for June delivery settled up 54 cents, or 1.2%, to $44.32 a barrel on the New York Mercantile Exchange, down from gains that had reached 5.2% in morning trade. Brent, the global benchmark, gained 39 cents, or 0.9%, to $45.01 a barrel on ICE Futures Europe, down from earlier gains of 4.8%. The gains came primarily from fear of outages in two parts of the world. Political infighting between factions in the east and west of Libya could destroy the U.N.-created government there and threaten its crude output. And several Canadian oil-sands companies are shutting down or slowing operations because of fires in Alberta. "Production outages are piling up," said Michael Tran, commodity strategist at RBC Capital Markets. The fires "escalated fast" and are "very front and center" in the minds of traders. The Canadian Crude Index rose even faster than global benchmarks, up 3% for the day at $32.05 a barrel, according to its creator, Auspice Capital Advisors Ltd. Its discount to U.S. oil has narrowed to nearly $14, the narrowest spread in about a year, since fires last spread through Alberta , the heart of the country's oil industry. More * Rally in Crude Boosts Markets This year's forest fires forced the evacuation of nearly 80,000 people, devastating the remote town at the hub of the country's oil-sands industry. Canada produces around 4.5 million barrels a day of oil, of which 2.3 million barrels a day comes from oil sands. Among several oil and pipeline companies to slow or halt their work, Royal Dutch Shell PLC's Canadian unit shut down its oil-sands mining, which produces about 250,000 barrels a day. Production is already down about 500,000 barrels total with the potential to reach 1 million, according to Tim Pickering, president at Auspice, which manages $300 million and an exchange-traded fund based on the Canadian Crude Index. That puts U.S. supplies at risk and would be enough to nearly wipe out the world's oversupply, he added. "This is the most important issue in oil today," Mr. Pickering said. "That will put the system back in check really quick." In Libya, disagreements over petroleum revenue have inflamed the country's political crisis. The authorities that control the eastern half of Libya moved this week to block oil exports , including from the Marsa El-Hariga terminal, which represents the bulk of Libya's exports -- more than 150,000 barrels a day. Output there is dwindling compared with the 1.4 million barrels a day that came before the country's war, said Michael Poulsen, oil analyst at Global Risk Management. While many of these developments unfolded earlier in the week, traders are still digesting the information, especially new updates from Canada, brokers, analysts and traders said. There is a lot of uncertainty about how long they last, which can inject fear into the market, they said. Speculators have also been a growing force in oil recently, priming the market for violent swings even on seemingly little new information, analysts have said. Speculators "don't want to be caught out," said Stephen Thornber, a global equity income manager who oversees $2.2 billion in assets at Columbia Threadneedle Investments in London. "Any tiny bit of positive news is amplified and exaggerated in the price move." Thursday's rally extended a months-long recovery in oil prices, which are up by more than half from their lows earlier in the year. However, analysts still caution that the gains might not be sustainable, with oil stockpiles continuing to grow around the world . Several analysts, including the energy-consulting firm Wood Mackenzie, said the cuts from Canada are likely to be short-lived. The U.S. also has record high oil stocks to draw from if its refineries don't have access to the 3.5 million barrels a day of crude that the U.S. imports on average from Canada. "We are talking at most about some small delays, and indeed there is plenty of heavy sour crude on the global seas to accommodate any buying sprees," said Tom Kloza, global head of energy analysis for the Oil Price Information Service, a repository of fuel data. Gasoline futures settled up 0.48 cents, or 0.3%, at $1.4914 a gallon. Diesel futures rose 0.05 cent, or 0.04%, to $1.3287 a gallon. Georgi Kantchev, Chester Dawson and Miriam Malek contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Oil sands; Forest & brush fires
Location: United States--US Canada Libya
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: New York Mercantile Exchange; NAICS: 523210; Name: RBC Capital Markets; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786775012
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786775012?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Giants Shelve Billions in Projects --- Depressed crude prices prompt firms to retrench on spending around the globe
Author: Kent, Sarah; Stewart, Robb M
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 May 2016: B.1.
Abstract:
According to information and analytics firm IHS Inc., the oil-and-gas industry spent about 15% less on research and development in 2015, when crude oil prices averaged roughly $50 a barrel, compared with 2014, when prices averaged close to $100 a barrel.
Full text: The world's largest energy companies are sidelining big ideas that they touted just a couple of years ago as the future of the industry. From Australia to the U.S. Gulf Coast, the casualties include ultra-deep-water drilling projects, huge boats that serve as floating liquefied natural gas factories and technology that could drastically reduce emissions from burning fossil fuels. Royal Dutch Shell PLC, Chevron Corp. and Australia's Woodside Petroleum Ltd. are among the big companies to pull back or delay ambitious projects. Shell hammered home the message on Wednesday after reporting first-quarter profits that were down 83% from the same period a year before. The Anglo-Dutch oil giant said it would cut its capital spending budget another 10%, to $30 billion this year. "To be brutally honest, any large new greenfield investment whether floating LNG, deepwater or elsewhere is under very strict critical review for cost levels and return simply because of where the industry is," Shell Chief Financial Officer Simon Henry said in a conference call. As of March, the oil industry has deferred or canceled $270 billion in projects since crude prices began crashing nearly two years ago, according to estimates from Norway-based consultancy Rystad Energy. The bulk of those spending cuts have involved high-tech projects once seen as crucial to sustaining global energy supplies. It is a dramatic turnaround from the last decade when surging demand for oil and dwindling resources sent crude prices soaring and big energy companies pushing into new frontiers regardless of the cost. According to information and analytics firm IHS Inc., the oil-and-gas industry spent about 15% less on research and development in 2015, when crude oil prices averaged roughly $50 a barrel, compared with 2014, when prices averaged close to $100 a barrel. "We see a pullback from customers on really complex projects," said Kishore Sundararajan, technology chief at GE Oil & Gas, General Electric Co.'s energy industry services division. Efforts to re-create the U.S. shale boom abroad have also suffered. The volumes unleashed by the technique of hydraulic fracturing are largely to blame for the current market downturn, but exporting the technique abroad has been stalled for political, geological and technical reasons, compounded by slumping energy prices. Now, the focus increasingly is on technologies that can reduce costs and improve efficiency as the world's biggest oil companies continue to slash billions from their budgets and cut thousands of jobs. ConocoPhillips last week said it would reduce spending by a further $700 million this year, drawing about half the savings from a decision to forgo deep-water drilling in the Gulf of Mexico. In March, Exxon Mobil Corp. said it would cut its capital spending 25% in 2016 and said it would be "highly selective" about investments. BP last month raised the prospect that it could rein in spending further if the oil market remains under pressure next year. Prices have risen to their highest levels this year, with Brent crude, the international benchmark, reaching $48.50 a barrel at the end of April. Even so, companies remain cautious on returning to complex and expensive new areas. "We wouldn't be looking to significantly ramp up [even] if we see oil prices come back up to $60 a barrel," BP CFO Brian Gilvary told analysts in April. "We're really looking at what we can do around the margins of the existing portfolio." Among the most high profile victims of the price crash are floating LNG plants -- huge ships that are essentially seafaring factories built to exploit remote gas fields. Natural gas was long transported only by pipeline; LNG plants turn the gas to a liquid, allowing for shipment to markets around the world. Woodside Petroleum last month shelved plans for a floating operation at its Browse field off Australia's western coast that analysts estimated would have cost about $40 billion. The company says it still favors floating LNG, but it isn't going to happen in the current market environment. Work on such floating gas factories has been under way since the early 1990s, but there still isn't one in operation. Slumping prices and a looming oversupply of natural gas is gradually killing off nascent plans for further projects. "Big heavy capital projects at the moment are not in favor, and so putting huge amounts of money into that at the moment is probably not the wisest thing to do," Woodside Chief Executive Peter Coleman said in April. Costly efforts to make the industry more environmentally friendly through carbon capture and storage also are vulnerable to the oil price slump. Known as CCS, the projects grab carbon dioxide released by industrial processes and funnel it underground. Such CCS projects are seen by many energy-sector analysts as crucial to preventing catastrophic climate change, and many in the industry have also been vociferous advocates of the technology. Shell and Chevron are leading ambitious projects in Canada and offshore of Australia, respectively. But follow-on projects in the oil sector have been slow to get off the ground. CCS remains expensive and often dependent on government subsidies. Shell last year scrapped a proposal for a plant in the U.K. after the government withdrew GBP 1 billion in support. The low oil price puts additional pressure on any new project. "It is still early days for these types of projects and they are costly," Chevron CEO John Watson said in Perth last month. In the deep waters of the Gulf of Mexico, oil companies are examining new opportunities warily. Chevron wrote off $500 million last year after it canceled its Buckskin-Moccasin development project in the region. BP has yet to make a final decision on whether to proceed with the much-delayed second phase of a project to tap oil and gas reserves at depths of 4,500 feet. Of course, not every big project is being put off. But those getting the go-ahead are taking cost cuts. For instance, BP has said it still expects to go ahead with its so-called Mad Dog project in the Gulf but believes more savings are possible. It has already squeezed around 50% from the cost of early plans that involved a customized design and came in at around $20 billion. Shell opted to move ahead with its Appomattox project, targeting production of 175,00 barrels of oil equivalent a day from a depth of 7,200 feet in the Gulf of Mexico -- one of a handful of developments to get approval last year -- after bringing down costs by 20%. And its Prelude LNG tanker, currently under construction, will likely be one of the first to test the technology. The project offshore Australia is expected to be in production by 2018. Credit: By Sarah Kent and Robb M. Stewart
Subject: Natural gas; Crude oil prices; LNG; Cost control; Energy industry; Petroleum industry
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Woodside Petroleum Ltd; NAICS: 211111; Name: Chevron Corp; NAICS: 211111, 324110
Classification: 8510: Petroleum industry; 1510: Energy resources; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: May 5, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786775443
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786775443?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Manulife Financial's Profit Climbs 45%; Net earnings got a lift from market-related gains, which more than offset depressed oil and gas prices
Author: Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
[...]during the January-to-March quarter, higher interest rates and realized gains on the sale of available-for-sale bonds bolstered Manulife's bottom line, more than offsetting charges related to souring investments.
Full text: Manulife Financial Corp., Canada's largest insurance company by assets, posted a first-quarter profit on Thursday that was up 45% from a year ago as interest-rate movements blunted the impact of lower energy prices. The commodity price rout has taken a toll on many global financial institutions in recent quarters. In Manulife's case, lower energy prices have diminished the value of the company's oil and gas investments, pinching profits. But during the January-to-March quarter, higher interest rates and realized gains on the sale of available-for-sale bonds bolstered Manulife's bottom line, more than offsetting charges related to souring investments. "The rebound in net income serves as a useful reminder that markets will fluctuate both in our favor and against us," Chief Executive Donald Guloien said on an afternoon conference call with analysts. Toronto-based Manulife's net earnings rose to 1.05 billion Canadian dollars ($816 million), or 51 Canadian cents a share. That compared with a year-earlier profit of C$723 million or 36 Canadian cents a share. During the quarter, the company recorded a C$474 million gain from "market-related impacts," including interest-rate changes. That provided a counterweight to C$340 million in investment-related charges for the period, roughly half being related to energy investments, said Chief Financial Officer Steve Roder. Core earnings, which exclude one-time items, rose to 44 Canadian cents a share from 39 Canadian cents a year earlier. Analysts polled by Thomson Reuters had expected a profit of 43 Canadian cents a share for the quarter. Manulife said overall insurance sales climbed 14% to C$954 million, with sales in Asia up 36%. Insurance sales dropped 28% in Canada and edged up 4% in the U.S. The company left its quarterly dividend unchanged at 18.5 Canadian cents a share. "While the underlying trends in these results were very good, notwithstanding a certain level of noise that is par for the course on this name, we note a number of issues that will continue to keep investors nervous," wrote Meny Grauman, an analyst with Cormark Securities Inc., in a note to clients. "These include the fact that investment-related experience losses remain very elevated, as well as the fact that credit experience has finally turned negative due to oil and gas." Manulife also held its annual meeting of shareholders on Thursday, during which 77% of investors cast a ballot endorsing the company's approach to executive compensation in a so-called "say-on-pay" vote. Although the resolution passed, Chairman Richard DeWolfe said the level of 23% opposition means "we have missed the mark somewhere. It's disappointing." The vote reflects in part concerns about the company's stock price performance since the financial crisis. Manulife's shares closed at C$18.26, up 1%, on the Toronto Stock Exchange. They had a peak of C$44.19 in October of 2007. Manulife is the first of Canada's major insurers to report first-quarter results. Smaller rival Sun Life Financial Inc. is expected to report results and hold its annual meeting on May 11. Write to Rita Trichur at rita.trichur@wsj.com. Credit: By Rita Trichur
Subject: Shareholder meetings; Financial performance; Earnings; Corporate profits; International finance; Investments; Sales; Executive compensation
Location: Canada
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Manulife Financial Corp; NAICS: 523920, 524113
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786784124
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786784124?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Occidental Petroleum Posts Profit Amid Cost Cutting; The oil and gas exploration company is continuing to reduce its exposure to the Middle East and North Africa
Author: Hufford, Austen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
Occidental Petroleum Corp. posted a profit in its latest quarter, helped by a hefty tax benefit, as the company continues to cut costs amid a low-energy-price environment.
Full text: Occidental Petroleum Corp. posted a profit in its latest quarter, helped by a hefty tax benefit, as the company continues to cut costs amid a low-energy-price environment. Houston-based Occidental, an oil and gas exploration and production company, has been hurt by the sustained tumble in energy prices. Oil and gas cash operating costs fell 23% in the first quarter compared with the same quarter last year even as its realized crude oil price fell 39% to $29.42 per barrel. Still, Occidental hasn't significantly cut back production lately. In the latest quarter, production climbed 11% from a year earlier to 590,000 barrels of oil equivalent a day. That is down 1.2% from the prior quarter. Occidental said it is continuing to reduce its exposure to the Middle East and North Africa region, including in Bahrain, Iraq and Yemen. Production there fell 41%. Occidental reported a profit of $78 million, or 10 cents a share, compared with a loss of $218 million, or 28 cents a share, a year prior. The company posted a $203 million income-tax benefit in the latest quarter, compared with $19 million a year earlier, and income from discontinued operations of $438 million, compared with a $3 million loss from discontinued operations in the year-earlier period. Excluding discontinued operations and other items, Occidental posted a loss of 56 cents a share, while analysts polled by Thomson Reuters had forecast a loss of 40 cents a share. Total sales from fell 26% to $2.28 billion with declines across all three of its segments. Write to Austen Hufford at austen.hufford@wsj.com Credit: By Austen Hufford
Subject: Financial performance; Corporate profits; Energy economics; Crude oil prices
Location: Iraq Yemen Bahrain Middle East North Africa
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Occidental Petroleum Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786798433
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786798433?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Canada's National Bank to Book Oil Loan-Related Provisions; Canadian lenders have warned provisions for lower oil prices could rise as they brace for soured energy loans
Author: McKinnon, Judy; Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
In March, The Wall Street Journal reported that Canada's banking regulator was urging the country's major banks to review their accounting practices to ensure they have sufficient reserves to absorb souring energy loans.
Full text: National Bank of Canada on Thursday said it would book fiscal second-quarter provisions totaling nearly 200 million Canadian dollars ($155 million) for oil-sector loans that have taken a hit from the continuing commodity-price rout. The bank, Canada's sixth-largest by assets, said it would record specific provisions of C$12 million, plus a C$183 million so-called sectoral provision for oil-and-gas-related loans which it believes are at a higher risk of loss. Canadian lenders have largely shrugged off the effects of lower oil prices in recent quarters, but have warned that provisions could start to rise as they brace for more soured energy loans. National Bank's oil and gas exposure is worth around C$3.2 billion, or 2.7%, of its total loans. The bank's customer base includes small- and medium-size firms in Canada's oil patch, which have been forced to scale back spending and staffing levels amid low oil prices. The bank said its planned sectoral provision will reduce earnings by about 54 Canadian cents a share in the second quarter, and will lower its common equity tier 1 ratio--a key measure of balance sheet strength--by about 16 basis points. It said it now expects that ratio to be about 9.7% at the end of its fiscal second quarter. National Bank said it has also lowered its annual credit-loss guidance, but said the credit performance of its overall loan portfolio, excluding oil-related loans, remains within expectations. The bank is scheduled to report results for the fiscal second quarter, which ended in April, on June 1. "Far from being placated by this announcement, we believe that investors will treat the news today with a very skeptical eye going forward," Meny Grauman, an analyst with Cormark Securities Inc., wrote in a research note to clients. "This is probably not the last shoe to drop for the sector," he added, noting Bank of Nova Scotia is "particularly vulnerable in this context." Scotiabank, Canada's third-largest bank, has the biggest direct oil and gas exposure at 3.6% of total loans. Earlier this week, smaller rival Canadian Western Bank said it would record roughly C$33 million in provisions for credit losses for oil and gas loans. Total provisions for the quarter are expected to be about C$40 million, the bank said in a release. "Although all of the banks have continued to emphasize just how small these direct exposures are, we are now seeing clear evidence of how small exposures can lead to big spikes in loan losses," said Mr. Grauman. In March, The Wall Street Journal reported that Canada's banking regulator was urging the country's major banks to review their accounting practices to ensure they have sufficient reserves to absorb souring energy loans. In particular, the Office of the Superintendent of Financial Institutions asked lenders to scrutinize their collective allowances, reserve funds that act as cushions to absorb potential future loan losses. Write to Judy McKinnon at judy.mckinnon@wsj.com and Rita Trichur at rita.trichur@wsj.com Credit: By Judy McKinnon and Rita Trichur
Subject: Loans; Provisions; National banks; Banking industry; Loan losses
Location: Canada
Company / organization: Name: National Bank of Canada; NAICS: 522110; Name: Canadian Western Bank; NAICS: 522110; Name: Bank of Nova Scotia; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786798947
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786798947?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Canadian Natural Posts Loss Amid Lower Oil Prices; Slumping crude-oil pries contributed to a 52% drop in cash flow.
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
Canadian Natural Resources Ltd. on Thursday posted a smaller-than-expected first-quarter loss even as slumping crude-oil prices contributed to a 52% drop in cash flow.
Full text: Canadian Natural Resources Ltd. on Thursday posted a smaller-than-expected first-quarter loss even as slumping crude-oil prices contributed to a 52% drop in cash flow. The Calgary, Alberta-based oil and gas producer said production volumes met its guidance in the first three months of the year and operating costs fell, while West Texas Intermediate benchmark prices were at their lowest level for any quarter since the start of 2004. Canadian Natural reported a net loss of 105 million Canadian dollars (about $82 million), or 10 Canadian cents a share, in its quarter ended March 31. A year earlier, it lost C$252 million, or 23 Canadian cents a share. Adjusted to exclude certain items, Canadian Natural lost C$543 million, or 50 Canadian cents a share. Analysts polled by Thomson Reuters were expecting a loss of 57 Canadian cents a share. Cash flow slumped to C$657 million from C$1.37 billion a year earlier, largely due to lower benchmark pricing and lower sales volumes. WTI benchmark prices fell 31% to just over $33 a barrel, it noted. The company, which has slashed it capital-spending budget several times since early 2015, said its overall operating costs fell 14% from a year earlier. Capital spending in its latest quarter totaled C$1.04 billion, down from C$1.41 billion a year earlier. Its budget for 2016 is estimated at between C$3.5 billion and C$3.9 billion. Production volumes for the quarter averaged 844,531 barrels of oil equivalent a day, which the company said was in line with fourth-quarter levels and within its previously guided range of between of 829,000 barrels and 860,000 barrels a day. Write to Judy McKinnon at judy.mckinnon@wsj.com Credit: By Judy McKinnon
Subject: Net losses; Financial performance; Operating costs; Capital expenditures
Location: Calgary Alberta Canada
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786808466
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786808466?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Canada Wildfires Force Evacuation, Hampering Oil-Sands Operations; Rapid spread of Alberta blaze prompts evacuation of Fort McMurray, hub of country's oil-sands industry
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
CALGARY, Alberta--Raging forest fires in Canada's oil-rich province of Alberta forced the evacuation of nearly 80,000 people, devastating the remote town at the hub of the country's oil-sands industry and threatening to further burden a sector already plagued by low energy prices. Royal Dutch Shell PLC's Canadian unit halted its oil-sands mining operations, which produce about 250,000 barrels a day, to speed evacuations of people who fled to the site, which is about 60 miles north of the fires.
Full text: CALGARY, Alberta--Raging forest fires in Canada's oil-rich province of Alberta forced the evacuation of nearly 80,000 people, devastating the remote town at the hub of the country's oil-sands industry and threatening to further burden a sector already plagued by low energy prices. Some 76,000 people evacuated from Fort McMurray, 270 miles north of Alberta's capital Edmonton, to shelters hundreds of miles north and south of the town, officials said, revising an earlier estimate of 88,000. "We had a devastating day yesterday and we're preparing for a bad day today," said Darby Allen, the town's regional fire chief, at a news briefing Wednesday. He said there were no known casualties or injuries. The uncontrolled blaze shut down one major oil-sands mining operation on Wednesday and forced another to curtail production. Other operators have evacuated nonessential personnel to make room for thousands of evacuees who fled the disaster and sought refuge in camps designed to house temporary workers. Firefighters working through Tuesday night extinguished all building fires by early morning, but local officials said nearly 25,000 acres around Fort McMurray were ablaze and that the downtown remains at risk for new fires. "This is a very complex fire with multiple fronts and explosive conditions," said Bernie Schmitte, wildfire manager for Alberta's agriculture and forestry ministry. Officials said the cause of the fire, which they are calling Horse Creek, is being investigated to determine whether any human role or some other cause, such as lightning, triggered the blaze. Most residents were informed about the mandatory evacuation on Tuesday afternoon and had only 30 minutes to prepare. "Residents were advised to grab what they could and go," said Mr. Darby, the fire chief. "We didn't factor in people taking family heirlooms." Provincial officials said about 1,600 buildings have been damaged by the fire, which burned parts of several housing subdivisions and some structures in the town center. The town of Fort McMurray became the symbol of Canada's oil boom the last decade, attracting some of the world's biggest energy producers amid a rush to build megaprojects to extract nearby oil sands. Thanks to the influx of investment from producers such as Shell and Exxon Mobil, thousands flocked to "Fort McMoney" as the city spent millions building heated bus shelters, schools, bridges and hockey arenas to accommodate its rapidly growing and affluent population. Thanks to the oil boom, Fort McMurray's average household income hit C$186,782 (about $148,500) in 2013, the highest of any Canadian city. But since then, thousands of workers have been laid off due to the oil-price slump and according to the national statistics agency the town's unemployment rate hit 9.8% in March, double the rate of five years ago. Now, the town faces the grim task of rebuilding at a time when its biggest industry has been challenged by high extraction costs and low oil prices. The premier of Alberta, Rachel Notley, on Wednesday expressed hope that Fort McMurray would rebound from the damage. "Our province is strong and we will get through this. Albertans have proven time and time again that when disaster strikes, we come together and we find the solutions and we get through it," she said. Like some 10,000 other displaced residents, the mayor of Fort McMurray, Melissa Blake, stayed overnight Tuesday at an oil-sands camp with her husband and another family, sharing a room with a single bed. "The reality is setting in about how significant and serious the loss is," Ms. Blake told reporters. "We have been a community fighting an uphill battle for a long time in terms of the rate of changing growth that we've been experiencing." The evacuation is the largest in Alberta's history, forcing residents in more than 12 northern communities including Fort McMurray to leave their homes, according to the Canadian Red Cross. The Red Cross set up a toll-free number to help evacuees connect with family members. Across the province, many private citizens opened their homes to those fleeing the fires, officials said. The rapid spread of the blaze has started to affect operations at major oil-sands productions sites. The oil-sands facilities aren't directly threatened by the uncontrolled forest fires, but mandatory evacuations of workers have brought some operations to a halt. Royal Dutch Shell PLC's Canadian unit halted its oil-sands mining operations, which produce about 250,000 barrels a day, to speed evacuations of people who fled to the site, which is about 60 miles north of the fires. A spokesman didn't provide an estimate for how long the shutdown is expected to last. Suncor Energy Inc., Canada's largest oil producer, said late Tuesday that it reduced production at all of its oil-sands operations due to the forced evacuations. It also said that none of its operations were in the path of the forest fires. Exxon Mobil Corp.'s Canadian unit, Imperial Oil Ltd., said it was evacuating nonessential employees but that production hasn't been affected "at this time," according to a spokeswoman. Inter Pipeline said it partially closed its 540,000 barrel-a-day Polaris pipeline system and its 346,000 barrel-a-day Corridor system. Related to Inter Pipeline's moves, producer Husky Energy Inc. said it cut output at its Sunrise oil- sands plant by two-thirds, to 10,000 barrels a day. Western Canadian Select, the benchmark Canadian heavy crude oil, traded Wednesday at $12.84 a barrel below the benchmark U.S. price, according to FactSet. That is the highest price relative to the U.S. price since March 1, with the price difference between the two contracts is 73 cents narrower than Tuesday. Canada's total oil sands production is around 2 million barrels a day, much of which is exported to the U.S. The fires, which started late Sunday, spread from a forested area southwest of Fort McMurray and crossed the Athabasca River bisecting the town Monday. They began to threaten residential neighborhoods by midday Tuesday, prompting evacuations. Officials said the town has been vacated by all but firefighting and public safety personnel, but first responders continued to check housing subdivisions and public buildings downtown for any remaining people, using door knocks, bullhorns and patrols by emergency vehicles. Dozens of pets left behind by their owners were taken to a local community center awaiting their owners, they said. Southbound traffic on Highway 63, the city's main arterial road, resumed late Tuesday after being shut down earlier in the day as a precautionary measure due to the wildfires. An estimated 18,000 evacuees used the road to flee to Edmonton. David George-Cosh and Paul Vieira contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil sands; Forest & brush fires; Northern communities
Location: Canada
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786837385
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786837385?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Canada Wildfires Spread in Oil-Sands Region; Evacuations extended to a number of communities around Alberta's Fort McMurray
Author: George-Cosh, David; Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
CALGARY, Alberta--Forest fires continued to rage in Canada's oil-rich province of Alberta on Thursday as a mandatory evacuation order for areas near the hub of the country's oil-sands industry widened and key transportation routes remained closed.
Full text: CALGARY, Alberta--Forest fires continued to rage in Canada's oil-rich province of Alberta on Thursday as a mandatory evacuation order for areas near the hub of the country's oil-sands industry widened and key transportation routes remained closed. The fires and resulting evacuations , which have sent nearly 80,000 people to shelters hundreds of miles north and south of Fort McMurray, have crimped oil-sands production and threaten to weigh on the country's economic output. Officials late Wednesday extended evacuation orders to a number of areas surrounding Fort McMurray, including a First Nations reserve south of the town. The wildfires have spread to the oil-sands hub's airport and several buildings near the main terminal have been destroyed, officials said. Flights in and out of the airport remain canceled and the main highway route through the town remains closed to the public. More than 1,100 firefighters, 145 helicopters and 22 air tankers are helping fight the fires, which have grown nearly 10-fold to cover 210,000 acres, or about the size of Calgary, over the past day, officials said. Conditions remain "extreme" with a total of 49 wildfires continuing to burn, Alberta Premier Rachel Notley said Thursday. Seven of those fires are described as "out of control," Ms. Notley added. Cooler temperatures are expected to help control the fires on Thursday, but lower humidity and gusting winds of up to 25 miles an hour could complicate firefighters' efforts, officials said. "We have a difficult road ahead with a lot of uncertainty as the fires continue to burn." But whatever roads faced, "we will face them together," Ms. Notley said during a news conference Thursday. The fires have resulted in a reduction of around 500,000 barrels of crude-oil production a day, according to Charles St-Arnaud, North American economist at Nomura Securities. The crimped production is contributing to a jump in oil prices on Thursday to some of their highest levels of the year. Brent crude, the global benchmark, was recently up 2.3% at $45.66. Mr. St-Arnaud said Canada's oil-sands producers account for about 2.4% of the country's economy, and the current stoppage in oil production reduces gross domestic product by about 0.12 percentage points for each week of reduced supply. Economists at Bank of Nova Scotia said the wildfires raise the risk of "very little," if any, GDP growth occurring in Canada this quarter. Several oil-sands producers, including Royal Dutch Shell PLC's Canadian unit, Suncor Energy Inc. and Husky Energy Inc. have reduced their crude production as a result of the wildfires. The oil-sands facilities aren't directly threatened by the uncontrolled forest fires, but mandatory evacuations of workers have affected some operations. Canada's total oil-sands production is around 2 million barrels a day, much of which is exported to the U.S. Canada Public Safety Minister Ralph Goodale said Thursday afternoon that the immediate priority is fighting the fires and keeping people safe. But he said the federal government is also beginning to work on its medium-term response to the fires, including income support for people who have lost their livelihoods, infrastructure requirements and housing and health issues. Ottawa will also look at calculating how much money it will provide as part of the federal government's disaster-assistance arrangement. The fires, which started late Sunday, spread from a forested area southwest of Fort McMurray and crossed the Athabasca River bisecting the town Monday. They began to threaten residential neighborhoods by midday Tuesday, prompting evacuations. The town of Fort McMurray became the symbol of Canada's oil boom the last decade, attracting some of the world's biggest energy producers amid a rush to build megaprojects to extract nearby oil sands. Thanks to the influx of investment from producers such as Shell and Exxon Mobil, thousands flocked to "Fort McMoney" as the city spent millions building heated bus shelters, schools, bridges and hockey arenas to accommodate its rapidly growing and affluent population. The evacuation is the largest in Alberta's history, forcing residents in more than 12 northern communities including Fort McMurray to leave their homes, according to the Canadian Red Cross. The Red Cross set up a toll-free number to help evacuees connect with family members. Kim Mackrael contributed to this article. Write to David George-Cosh at david.george-cosh@wsj.com and Chester Dawson at chester.dawson@wsj.com Credit: By David George-Cosh and Chester Dawson
Subject: Oil sands; Evacuations & rescues; Forest & brush fires; Petroleum production; Gross Domestic Product--GDP
Location: Canada
Company / organization: Name: Husky Energy Inc; NAICS: 213111; Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Bank of Nova Scotia; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786893170
Document URL: https://login.ezproxy.uta.edu/login?url=htt ps://search.proquest.com/docview/1786893170?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
BP to Open Iran Office in Summer, Iranian Oil Firm Says; BP seeks to transfer technology after lifting of sanctions, according to Iranian official
Author: Malek, Miriam; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
Other Western oil companies that have made moves to return to Iran include Austria's OMV and France's Total SA. OMV earlier this week announced that it signed a memorandum of understanding with the National Iranian Oil Company, giving it the opportunity to pursue a number of potential oil and gas projects in the country.
Full text: LONDON--British oil giant BP will open an office in Iran this summer, according to Rokneddin Javadi, chairman of the National Iranian Oil Company. Quoted on the state-owned oil news service Shana, Mr. Javadi said BP is looking to transfer technology and capital to Iran. BP declined to comment. The Islamic Republic once enjoyed major investments from a bevy of the world's largest energy companies, but Western sanctions over its nuclear program forced the major oil companies out. Though many have shown interest in returning, uncertainty over the terms of working in the country and the legal restrictions still related to sanctions remain a major stumbling block. Read More * European Oil Companies Steal a March on U.S. Peers in Iran * Tehran Presents New Model for Oil-Development Contracts * Iran to Sign Oil Deal With France's Total BP's CEO Bob Dudley previously has been cautious on investing in the country. Speaking earlier this year, he said his company would choose opportunities carefully. Other Western oil companies that have made moves to return to Iran include Austria's OMV and France's Total SA. OMV earlier this week announced that it signed a memorandum of understanding with the National Iranian Oil Company, giving it the opportunity to pursue a number of potential oil and gas projects in the country. BP's history in Iran is complicated. The company was expelled from Iran in the 1950s when it was operating under the name Anglo-Persian Oil Company and Iran decided to nationalize its oil and gas industry. After the company ceased its production activities, BP held a trading relationship with Iran during the presanctions era. Write to Miriam Malek at miriam.malek@wsj.com and Sarah Kent at sarah.kent@wsj.com Credit: By Miriam Malek and Sarah Kent
Subject: Foreign investment; Acquisitions & mergers; Energy industry
Location: France Iran
People: Dudley, Bob
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786893203
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786893203?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Intervale Invests in Oil and Gas Services Company Dynacorp
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract: None available.
Full text: Intervale Capital said it made a growth equity investment in Dynacorp Fabricators Inc., a Canadian company that makes sand-filtration, well-testing and production-processing equipment for operators and service providers in the oil and gas industry. Justin Morin, Dynacorp's co-founder and chief executive, sought the investment as part of a "broad recapitalization of the company," according to a news release. Financial terms of the deal weren't disclosed. Dynacorp, based in Calgary, Alberta, has a manufacturing facility in Grand Prairie, Alberta. Intervale, of Cambridge, Mass., targets midmarket energy services and manufacturing companies with annual earnings before interest, taxes, depreciation and amortization of $8 million to $50 million for buyout transactions. The firm said it is investing from Intervale Capital Fund III LP, which closed on $495 million in 2014.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786893223
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786893223?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fires Cause Drop in Canadian Oil Output; Alberta oil-sands operations cut production due to evacuations or as a precaution
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
Related Reading * Canadian Wildfires Spread in Oil-Sands Region * Wildfires Force Evacuation, Hampering Oil-Sands Operations * Oil Pulls Back After Approaching 2016 Highs Analysts say the global market is less oversupplied than it was even a few months ago at a time when producers' capacity to ramp up production has been reduced.
Full text: CALGARY, Alberta--Raging forest fires in the heart of Canada's oil-sands region curbed production and helped drive up global prices on Thursday as some worried enough oil was threatened to nearly wipe out the world's oversupply. Many companies evacuated staff and cut production because of pipeline outages and the risk from encroaching blazes. No oil operations reported fire damage, but their efforts to protect themselves led to a reduction of at least 475,000 barrels a day, or almost one-fifth of Canada's 2.5 million barrels in total oil sands production. Much of that output is sent to refineries in the U.S. The outages are widely expected to be temporary, but they drove up the price of typically heavily discounted Canadian crude in recent trading. Prices for the U.S. benchmark crude rose 1.2% to $44.32 a barrel Thursday, and the global benchmark gained about 1%--with worries about lower supplies from Libya and Nigeria also affecting trading. If oil production now threatened by the Canadian fires were halted, it would be enough to nearly wipe out the world's oversupply , said Tim Pickering, chief investment officer of Calgary-based Auspice Capital Advisors Ltd., which manages $300 million and an exchange-traded fund based on the Canadian Crude Index. "This is the most important issue in oil today," Mr. Pickering said. "That will put the system back in check really quick." Oil prices have been pressured for almost two years by excess supplies. But production has started to fall in the U.S. and elsewhere following massive spending cuts by energy companies . Meanwhile, demand continues to grow. Related Reading * Canadian Wildfires Spread in Oil-Sands Region * Wildfires Force Evacuation, Hampering Oil-Sands Operations * Oil Pulls Back After Approaching 2016 Highs Analysts say the global market is less oversupplied than it was even a few months ago at a time when producers' capacity to ramp up production has been reduced. That makes the oil market more vulnerable to a shortage if production is halted in any part of the world. In addition to Canada, oil traders are currently worried about lower supplies from Libya due to political unrest and from Nigeria due to a pipeline outage. Some analysts also warn that Venezuela's oil production could fall amid the country's struggling economy and power shortages . The longer-term impact of the Alberta fire remains unclear. Some officials say production will likely bounce back once the fire threat recedes; others say damage to infrastructure and from displaced workers could hamper efforts to ramp up output once the fires are put out. "I expect we'll recover fairly quickly, but it's too early to say how much damage has been done to equipment and operations in the town of Fort McMurray," Steve Laut, president of Canadian Natural Resources Ltd., said on a conference call with analysts. Mr. Laut said that oil sands output at his company, a major oil and gas producer, hasn't been affected by the disaster. But the Bank of Nova Scotia said the destruction of property and loss of production at other oil sands operations could cast a long shadow. The forest fire fallout could mean "very little" GDP growth for the overall Canadian economy in the second quarter and that the damage to infrastructure will slow the recovery in the country's oil patch, the bank said in a report. In the latest of a series of plant closures, Exxon Mobil Corp.'s Imperial Oil and ConocoPhillips on Thursday shut some production. Exxon cut output at its 194,000 barrel-a-day mine, citing "uncertainties." Conoco halted a 50,000 barrel-a-day mine and evacuated all staff due to a fire near the town of Anzac. They followed a move Wednesday by Nexen Energy ULC, a subsidiary of China's Cnooc Ltd. ConocoPhillips began evacuating people at its Surmont site before dawn Thursday, including 196 local residents who had been offered shelter, in what it called a "precautionary measure." Two of the biggest oil-sands producers already reduced or halted production by at least 385,000 barrels a day. Suncor Energy Inc., Canada's largest producer, late on Wednesday shut its base mine operation. That operation's two mines have a combined capacity of 350,000 barrels a day, though they had been running closer to 130,000 barrels a day as a result of routine maintenance. Suncor also cut output at its 350,000 barrel-a-day Syncrude mining operation and 203,000 barrel-a-day Firebag well site, but didn't specify by how much. The Canadian unit of Royal Dutch Shell PLC shut down its oil sands mines producing 255,000 barrels a day. "That's largely being done to allow folks to focus on rendering aid to the community and emergency response," Lee Tillman, CEO of Marathon Oil Corp., which holds a stake in the mines, said on a conference call. "The mines themselves are not under any direct or immediate threat." Nicole Friedman, Timothy Puko and Erin Ailworth contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil sands; Evacuations & rescues; Prices; Forest & brush fires; Petroleum production; Pipelines; Energy industry
Location: Canada Nigeria United States--US Libya
Company / organization: Name: Canadian Natural Resources Ltd; NAICS: 211111, 213112
Publication title: Wall S treet Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786965948
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786965948?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
When America Ran on Empty; Farmers, wildcatters, truck drivers, pipeline operators and oil companies all prospered by using energy policy to their advantage.
Author: Levinson, Marc
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 May 2016: n/a.
Abstract:
"Just as ambitious New Dealers used the Great Depression as an opportunity to carry out a Keynesian revolution, so did these reformers use the oil crisis as an occasion to advance the ideology of their intellectual heroes like Friedrich von Hayek, Ayn Rand, and Milton Friedman," Mr. Jacobs writes. Behind the fog of rhetoric about "energy independence" and "free markets," various players--farmers, wildcatters, multinational oil companies, pipeline operators, truck drivers, electric generators, industrial users of natural gas and dozens of other constituencies--all prospered by using the regulatory structure to their advantage.
Full text: The annals of regulation hold no shortage of oddities, but there may be none as bizarre as the Brownsville Loop. The Loop was an outgrowth of U.S. quotas on petroleum imports that had been crafted in the 1950s to keep domestic oil production profitable. When our Canadian neighbors objected, the Eisenhower administration crafted an exemption for oil arriving by land. But soon, tankers of Mexican crude were steaming to Brownsville, Texas, where the oil was off-loaded into tanker trucks, driven a few miles across the Rio Grande into Mexico, and then hauled back to the Brownsville dock. After taking the energy-wasting detour, this waterborne oil, 30,000 barrels of it a day, was deemed to have arrived in the United States by land, exempting it from the quotas. The Brownsville Loop, which was eliminated in 1971, was just one of many monuments to American ingenuity created by federal energy policy. There was also concubinage--a practice involving intimate relations between big refineries that desperately wanted cheap foreign oil and small ones, which Congress had favored with extra import quotas. There were rules to ensure cheap heating oil in the Northeast--and a lively black market that siphoned those supposedly vital supplies to the Midwest. And, of course, there were bureaucracies, both in Washington and in the states, charged with deciding what oil and natural gas should cost and how they should be allocated. Such intricacies of regulation don't get much attention in Meg Jacobs's book, "Panic at the Pump." Ms. Jacobs, a Princeton historian, has written a history of the political battles over energy that wracked the United States in the years following the Arab oil embargo in 1973. The energy crisis, she contends, transformed American politics, decimating liberalism and bringing anti-government conservatives to power. "Just as ambitious New Dealers used the Great Depression as an opportunity to carry out a Keynesian revolution, so did these reformers use the oil crisis as an occasion to advance the ideology of their intellectual heroes like Friedrich von Hayek, Ayn Rand, and Milton Friedman," Mr. Jacobs writes. There's an element of truth to her claim. Jimmy Carter's anguished presidency would surely have been a happier one had oil not been in short supply. Block-long gasoline lines and strikes by truckers angry at the high cost of diesel fuel indisputably darkened the nation's mood. Any number of think-tankers and ideologues did use the energy crisis as a wedge to promote their agenda of smaller government and less regulation. Contrary to Ms. Jacobs's depiction, though, the endless political battles over energy had less to do with partisan politics than with rent-seeking. Behind the fog of rhetoric about "energy independence" and "free markets," various players--farmers, wildcatters, multinational oil companies, pipeline operators, truck drivers, electric generators, industrial users of natural gas and dozens of other constituencies--all prospered by using the regulatory structure to their advantage. It was hardly the case that business in general, or energy businesses in particular, wanted regulations lifted; had that occurred, certain oil refineries would have lost their cost advantage over others, and some oil wells would have become unprofitable. Many other manufacturers would have been stuck with commitments to buy natural gas at prices well above the market. This is why energy deregulation proved so devilishly difficult to enact: Any change that benefited one interested party was likely, at least in the short term, to be harmful to others. Nor is it clear, as Ms. Jacobs contends, that energy was the dominant political concern of the 1970s. In reality Americans, along with the citizens of almost every other wealthy country, had ample cause to be unhappy. Productivity growth had fallen sharply everywhere for reasons largely unrelated to higher energy costs, and this weakness translated directly into sluggish income growth and stagnant living standards. Taxpayers who had cheered the expansion of the welfare state during the robust economy of the postwar period began to see it as a burden when times grew tougher. Inflation raged around the world as politicians and central bankers tried to make their economies grow faster than fundamental conditions would allow. Americans saw the purchasing power of the dollar fall by more than half within a decade. The energy crisis was unpleasant, but it does not explain why politics turned right, in the United States or anywhere else. Ms. Jacobs tells her story largely by stringing together pronouncements by politicians and anecdotes from the media. In a single 11-line paragraph, to take but one example, she manages to quote Sen. Abraham Ribicoff, the Associated Press, an unnamed North Carolina man, Newsweek, and Senator Lowell Weicker. The book thus brims with cardboard characters--"liberals," "conservatives," "environmentalists," "the industry." Republicans are depicted as favoring the "free market," although "what they meant by a free market was no government interference unless it benefited the industry," Ms. Jacobs explains. Democrats are shown fighting deregulation to protect consumers and preserve the environment, except when they seek to spend vast sums on boondoggles like synthetic fuels. The extraordinary complexity of unwinding decades of government intervention in energy markets goes missing amid the stereotypes. Mr. Levinson, author of "The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger," is completing an economic history of the 1970s. Credit: By Marc Levinson
Subject: Natural gas; Electric utilities; Politics; Regulation; Petroleum production; Petroleum refineries
Location: United States--US
People: Friedman, Milton Rand, Ayn (1905-82) Carter, Jimmy
Company / organization: Name: Congress; NAICS: 921120
Publication title: Wall Street Journal (Onlin e); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 5, 2016
Section: Arts
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786970206
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786970206?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Wildfires Ravage Canada's Oil-Sands Region; A police officer surveyed the ruins of a neighborhood on Wednesday in Fort McMurray, where nearly 80,000 were evacuated.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract: None available.
Full text: A police officer surveyed the ruins of a neighborhood on Wednesday in Fort McMurray, where nearly 80,000 were evacuated.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786986936
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786986936?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Canada Wildfires Spread in Oil-Sands Region; Evacuations extended to a number of communities around Alberta's Fort McMurray
Author: George-Cosh, David; Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
CALGARY, Alberta--Forest fires continued to rage in Canada's oil-rich province of Alberta on Thursday as a mandatory evacuation order for areas near the hub of the country's oil-sands industry widened and key transportation routes remained closed.
Full text: CALGARY, Alberta--Forest fires continued to rage in Canada's oil-rich province of Alberta on Thursday as a mandatory evacuation order for areas near the hub of the country's oil-sands industry widened and key transportation routes remained closed. The fires and resulting evacuations , which have sent nearly 80,000 people to shelters hundreds of miles north and south of Fort McMurray, have crimped oil-sands production and threaten to weigh on the country's economic output. Officials late Wednesday extended evacuation orders to a number of areas surrounding Fort McMurray, including a First Nations reserve south of the town. The wildfires have spread to the oil-sands hub's airport and several buildings near the main terminal have been destroyed, officials said. Flights in and out of the airport remain canceled and the main highway route through the town remains closed to the public. More than 1,100 firefighters, 145 helicopters and 22 air tankers are helping fight the fires, which have grown nearly 10-fold to cover 210,000 acres, or about the size of Calgary, over the past day, officials said. Conditions remain "extreme" with a total of 49 wildfires continuing to burn, Alberta Premier Rachel Notley said Thursday. Seven of those fires are described as "out of control," Ms. Notley added. Cooler temperatures are expected to help control the fires on Thursday, but lower humidity and gusting winds of up to 25 miles an hour could complicate firefighters' efforts, officials said. "We have a difficult road ahead with a lot of uncertainty as the fires continue to burn." But whatever roads faced, "we will face them together," Ms. Notley said during a news conference Thursday. The fires have resulted in a reduction of around 500,000 barrels of crude-oil production a day, according to Charles St-Arnaud, North American economist at Nomura Securities. The crimped production is contributing to a jump in oil prices on Thursday to some of their highest levels of the year. Brent crude, the global benchmark, was recently up 2.3% at $45.66. Mr. St-Arnaud said Canada's oil-sands producers account for about 2.4% of the country's economy, and the current stoppage in oil production reduces gross domestic product by about 0.12 percentage points for each week of reduced supply. Economists at Bank of Nova Scotia said the wildfires raise the risk of "very little," if any, GDP growth occurring in Canada this quarter. Several oil-sands producers, including Royal Dutch Shell PLC's Canadian unit, Suncor Energy Inc. and Husky Energy Inc. have reduced their crude production as a result of the wildfires. The oil-sands facilities aren't directly threatened by the uncontrolled forest fires, but mandatory evacuations of workers have affected some operations. Canada's total oil-sands production is around 2 million barrels a day, much of which is exported to the U.S. Canada Public Safety Minister Ralph Goodale said Thursday afternoon that the immediate priority is fighting the fires and keeping people safe. But he said the federal government is also beginning to work on its medium-term response to the fires, including income support for people who have lost their livelihoods, infrastructure requirements and housing and health issues. Ottawa will also look at calculating how much money it will provide as part of the federal government's disaster-assistance arrangement. The fires, which started late Sunday, spread from a forested area southwest of Fort McMurray and crossed the Athabasca River bisecting the town Monday. They began to threaten residential neighborhoods by midday Tuesday, prompting evacuations. The town of Fort McMurray became the symbol of Canada's oil boom the last decade, attracting some of the world's biggest energy producers amid a rush to build megaprojects to extract nearby oil sands. Thanks to the influx of investment from producers such as Shell and Exxon Mobil, thousands flocked to "Fort McMoney" as the city spent millions building heated bus shelters, schools, bridges and hockey arenas to accommodate its rapidly growing and affluent population. The evacuation is the largest in Alberta's history, forcing residents in more than 12 northern communities including Fort McMurray to leave their homes, according to the Canadian Red Cross. The Red Cross set up a toll-free number to help evacuees connect with family members. Kim Mackrael contributed to this article. Write to David George-Cosh at david.george-cosh@wsj.com and Chester Dawson at chester.dawson@wsj.com Credit: By David George-Cosh and Chester Dawson
Subject: Oil sands; Evacuations & rescues; Forest & brush fires; Petroleum production; Gross Domestic Product--GDP
Location: Canada
Company / organization: Name: Husky Energy Inc; NAICS: 213111; Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Bank of Nova Scotia; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786995329
Document URL: https://login.ezproxy.uta.edu/login?url=htt ps://search.proquest.com/docview/1786995329?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Futures Ease in Asia as Traders Weigh Supply Disruptions; July Brent crude fell 20 cents, or 0.4%, to $44.81 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
In refined fuel markets, Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 0.33 cents to $1.4881 a gallon, while June diesel traded at $1.3268, 0.19 cents lower.
Full text: Oil futures eased in early Asian trade Friday as traders continued to weigh the scale of recent supply disruptions. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June fell 22 cents, or 0.5%, to $44.10 a barrel in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell 20 cents, or 0.4%, to $44.81 a barrel. The pullback follows a volatile session in New York, which saw oil prices closing with a modest gain amid threats to supply in Canada and Libya. In Alberta's oil sands region, wildfires prompted several producers to shut down or slow their operations. And political infighting in Libya threatened production in the northern African country. "A key development in the past week has been the wildfires in Canada," said Virendra Chauhan, oil analyst at research firm Energy Aspects. He said the outages come at an especially inopportune time when output appears to be under pressure in many places around the world, from Venezuela to Nigeria. "It's really a supply-driven market at the moment," he said. Oil prices have rallied sharply in recent months, up by more than half from their lows earlier in the year. The prospect of tightening supplies worldwide, following nearly unabated production gains in North America, has helped lift crude prices from their lows below $30 a barrel hit as recently as February. Later Friday, traders are likely to turn their attention to data on monthly jobs growth in the U.S. The data offers a window into the pace of economic growth by the world's biggest oil consumer. Economists surveyed by The Wall Street Journal expect 205,000 new jobs were added in April. In refined fuel markets, Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 0.33 cents to $1.4881 a gallon, while June diesel traded at $1.3268, 0.19 cents lower. ICE gasoil for May changed hands at $394.25 a metric ton, down $4.50 from Thursday's settlement. Credit: By Dan Strumpf
Subject: Crude oil prices; Price increases
Location: Libya Canada New York
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1786995345
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1786995345?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Canadian Fire Spreads Across Oil Sands --- Shut pipelines and skeleton crews at some mines in Alberta push up global prices
Author: Dawson, Chester
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 May 2016: A.6.
Abstract:
If oil production now threatened by the Canadian fires were halted, it would be enough to nearly wipe out the world's oversupply, said Tim Pickering, chief investment officer of Calgary-based Auspice Capital Advisors Ltd., which manages $300 million and an exchange-traded fund based on the Canadian Crude Index.
Full text: CALGARY, Alberta -- Raging forest fires in the heart of Canada's oil-sands region curbed production and helped drive up global prices on Thursday as some worried enough oil was threatened to nearly wipe out the world's oversupply. Many companies evacuated staff and cut production because of pipeline outages and the risk from encroaching blazes. No oil operations reported fire damage, but their efforts to protect themselves led to a reduction of at least 475,000 barrels a day, or almost one-fifth of Canada's 2.5 million barrels in total oil sands production. Much of that output is sent to refineries in the U.S. The outages are widely expected to be temporary, but they drove up the price of typically heavily discounted Canadian crude in recent trading. Prices for the U.S. benchmark crude rose 1.2% to $44.32 a barrel Thursday, and the global benchmark gained about 1% -- with worries about lower supplies from Libya and Nigeria also affecting trading. If oil production now threatened by the Canadian fires were halted, it would be enough to nearly wipe out the world's oversupply, said Tim Pickering, chief investment officer of Calgary-based Auspice Capital Advisors Ltd., which manages $300 million and an exchange-traded fund based on the Canadian Crude Index. "This is the most important issue in oil today," Mr. Pickering said. "That will put the system back in check really quick." Oil prices have been pressured for almost two years by excess supplies. But production has started to fall in the U.S. and elsewhere following massive spending cuts by energy companies. Meanwhile, demand continues to grow. Analysts say the global market is less oversupplied than it was even a few months ago at a time when producers' capacity to ramp up production has been reduced. That makes the oil market more vulnerable to a shortage if production is halted in any part of the world. In addition to Canada, oil traders are currently worried about lower supplies from Libya due to political unrest and from Nigeria due to a pipeline outage. Some analysts also warn that Venezuela's oil production could fall amid the country's struggling economy and power shortages. The longer-term impact of the Alberta fire remains unclear. Some officials say production will likely bounce back once the fire threat recedes; others say damage to infrastructure and from displaced workers could hamper efforts to ramp up output once the fires are put out. "I expect we'll recover fairly quickly, but it's too early to say how much damage has been done to equipment and operations in the town of Fort McMurray," Steve Laut, president of Canadian Natural Resources Ltd., said on a conference call with analysts. Mr. Laut said that oil sands output at his company, a major oil and gas producer, hasn't been affected by the disaster. But the Bank of Nova Scotia said the destruction of property and loss of production at other oil sands operations could cast a long shadow. The forest fire fallout could mean "very little" GDP growth for the overall Canadian economy in the second quarter and that the damage to infrastructure will slow the recovery in the country's oil patch, the bank said in a report. In the latest of a series of plant closures, Exxon Mobil Corp.'s Imperial Oil and ConocoPhillips on Thursday shut some production. Exxon cut output at its 194,000 barrel-a-day mine, citing "uncertainties." Conoco halted a 50,000 barrel-a-day mine and evacuated all staff due to a fire near the town of Anzac. They followed a move Wednesday by Nexen Energy ULC, a subsidiary of China's Cnooc Ltd. ConocoPhillips began evacuating people at its Surmont site before dawn Thursday, including 196 local residents who had been offered shelter, in what it called a "precautionary measure." Two of the biggest oil-sands producers already reduced or halted production by at least 385,000 barrels a day. Suncor Energy Inc., Canada's largest producer, late on Wednesday shut its base mine operation. That operation's two mines have a combined capacity of 350,000 barrels a day, though they had been running closer to 130,000 barrels a day as a result of routine maintenance. Suncor also cut output at its 350,000 barrel-a-day Syncrude mining operation and 203,000 barrel-a-day Firebag well site, but didn't specify by how much. --- Nicole Friedman, Timothy Puko and Erin Ailworth contributed to this article. (See related article: "Officials try to contain blazes near Fort McMurray; 'we have a difficult road ahead'" -- WSJ May 6, 2016) Credit: By Chester Dawson
Subject: Pipelines; Energy industry; Oil sands; Forest & brush fires; Crude oil prices
Location: Canada
Classification: 8510: Petroleum industry; 9172: Canada
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.6
Publication year: 2016
Publication date: May 6, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787026868
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787026868?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Canadian Fire Spreads Across Oil Sands --- Officials try to contain blazes near Fort McMurray; 'we have a difficult road ahead'
Author: George-Cosh, David; Dawson, Chester
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 May 2016: A.6.
Abstract:
Officials late Wednesday extended evacuation orders to a number of areas surrounding the town of Fort McMurray, including a reserve that is home to the First Nations people.
Full text: CALGARY, Alberta -- Canadian officials moved to contain rapidly spreading wildfires near an oil town in the province of Alberta on Thursday and kept key transportation routes closed. Officials late Wednesday extended evacuation orders to a number of areas surrounding the town of Fort McMurray, including a reserve that is home to the First Nations people. More than 80,000 people have taken to shelters hundreds of miles north and south of the town, the largest evacuation in Alberta's history. The wildfires on Thursday had spread to the Fort McMurray airport, where several buildings near the main terminal were destroyed, officials said. Flights in and out of the airport were canceled, and the main highway route through the town remained closed to the public. More than 1,100 firefighters, 145 helicopters and 22 air tankers as of midday Thursday were helping fight the blazes, which grew nearly 10-fold to cover 210,000 acres, or about the size of the city of Calgary, over the past day, officials said. Conditions remained "extreme," Alberta Premier Rachel Notley said. A total of 49 wildfires were burning Thursday, she said. Seven were described as "out of control," Ms. Notley added. Cooler temperatures were expected to help contain the blazes, officials said, but lower humidity and gusting winds of up to 25 miles an hour could complicate firefighters' efforts, they said. "We have a difficult road ahead with a lot of uncertainty as the fires continue to burn," Ms. Notley said at a news conference. But whatever roads residents faced, "we will face them together," she said. Canada Public Safety Minister Ralph Goodale said Thursday afternoon that the immediate priority was to fight the fires and keep people safe. He said the federal government was also beginning to work on its medium-term response to the fires, including providing income support for people who have lost their livelihoods, as well as infrastructure requirements and housing and health issues. Ottawa will also look at calculating how much money it will provide as part of the federal government's disaster-assistance arrangement, which offers financial help to regional governments after a large natural disaster. The fires, which started late Sunday, spread from a forested area southwest of Fort McMurray and crossed the Athabasca River bisecting the town Monday. They began to threaten residential neighborhoods midday Tuesday, prompting evacuations. Fort McMurray became the symbol of Canada's oil boom in the last decade, attracting some of the world's biggest energy producers amid a rush to build megaprojects to extract nearby oil sands. Thanks to the influx of investment from producers such as Shell and Exxon Mobil, thousands flocked to "Fort McMoney" as the city spent millions building heated bus shelters, schools, bridges and hockey arenas to accommodate its rapidly growing and affluent population. The evacuation has forced residents in more than 12 northern communities including Fort McMurray to leave their homes, according to the Canadian Red Cross. --- Kim Mackrael contributed to this article. (See related article: "Shut pipelines and skeleton crews at some mines in Alberta push up global prices" -- WSJ May 6, 2016) Credit: By David George-Cosh and Chester Dawson
Subject: Northern communities; Evacuations & rescues; Forest & brush fires
Location: Canada
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.6
Publication year: 2016
Publication date: May 6, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787027088
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787027088?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Forest Fires Cut Into Canadian Oil Production; Alberta oil-sands companies reduce output, evacuate staff due to risk from encroaching blazes
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
Related Reading * Canadian Wildfires Spread in Oil-Sands Region * Wildfires Force Evacuation, Hampering Oil-Sands Operations * Oil Pulls Back After Approaching 2016 Highs Analysts say the global market is less oversupplied than it was even a few months ago at a time when producers' capacity to ramp up production has been reduced.
Full text: CALGARY, Alberta--Raging forest fires in the heart of Canada's oil-sands region curbed production and helped drive up global prices on Thursday as some worried enough oil was threatened to nearly wipe out the world's oversupply. Many companies evacuated staff and cut production because of pipeline outages and the risk from encroaching blazes. No oil operations reported fire damage, but their efforts to protect themselves led to a reduction of at least 645,000 barrels a day, or almost one-quarter of Canada's 2.5 million barrels in total oil sands production. Much of that output is sent to refineries in the U.S. The outages are widely expected to be temporary, but they drove up the price of typically heavily discounted Canadian crude in recent trading. Prices for the U.S. benchmark crude rose 1.2% to $44.32 a barrel Thursday, and the global benchmark gained about 1%--with worries about lower supplies from Libya and Nigeria also affecting trading. If oil production now threatened by the Canadian fires were halted, it would be enough to nearly wipe out the world's oversupply , said Tim Pickering, chief investment officer of Calgary-based Auspice Capital Advisors Ltd., which manages $300 million and an exchange-traded fund based on the Canadian Crude Index. "This is the most important issue in oil today," Mr. Pickering said. "That will put the system back in check really quick." Oil prices have been pressured for almost two years by excess supplies. But production has started to fall in the U.S. and elsewhere following massive spending cuts by energy companies . Meanwhile, demand continues to grow. Related Reading * Canadian Wildfires Spread in Oil-Sands Region * Wildfires Force Evacuation, Hampering Oil-Sands Operations * Oil Pulls Back After Approaching 2016 Highs Analysts say the global market is less oversupplied than it was even a few months ago at a time when producers' capacity to ramp up production has been reduced. That makes the oil market more vulnerable to a shortage if production is halted in any part of the world. In addition to Canada, oil traders are currently worried about lower supplies from Libya because of political unrest and from Nigeria due to a pipeline outage. Some analysts also warn that Venezuela's oil production could fall amid the country's struggling economy and power shortages . The longer-term impact of the Alberta fire remains unclear. Some officials say production will likely bounce back once the fire threat recedes; others say damage to infrastructure and from displaced workers could hamper efforts to ramp up output once the fires are put out. "I expect we'll recover fairly quickly, but it's too early to say how much damage has been done to equipment and operations in the town of Fort McMurray," Steve Laut, president of Canadian Natural Resources Ltd., said on a conference call with analysts. Mr. Laut said that oil sands output at his company, a major oil and gas producer, hasn't been affected by the disaster. But the Bank of Nova Scotia said the destruction of property and loss of production at other oil sands operations could cast a long shadow. The forest fire fallout could mean "very little" GDP growth for the overall Canadian economy in the second quarter and that the damage to infrastructure will slow the recovery in the country's oil patch, the bank said in a report. In the latest of a series of plant closures, Suncor Energy Inc., Canada's largest producer, late Thursday shut down all of its wholly owned oil sands assets, including two mines and a pair of well sites, which had been producing a total of 300,000 barrels a day. It had previously reduced output at another mining operation called Syncrude, in which it owns a controlling stake. Exxon Mobil Corp.'s Imperial Oil and ConocoPhillips also shut some production earlier Thursday. Exxon cut output by an undisclosed amount at its 194,000 barrel-a-day mine, citing "uncertainties." Conoco halted a 50,000 barrel-a-day mine and evacuated all staff due to a fire near the town of Anzac. They followed a move Wednesday by Nexen Energy ULC, a subsidiary of China's Cnooc Ltd. On Wednesday, the Canadian unit of Royal Dutch Shell PLC shut down two oil-sands mines, which produce 255,000 barrels a day, that it owns in partnership with Chevron Corp. and Marathon Oil Corp. "That's largely being done to allow folks to focus on rendering aid to the community and emergency response," Lee Tillman, chief executive of Marathon Oil said on a conference call. "The mines themselves are not under any direct or immediate threat." Nicole Friedman, Timothy Puko and Erin Ailworth contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil sands; Evacuations & rescues; Prices; Forest & brush fires; Petroleum production; Pipelines; Energy industry
Location: Canada Nigeria United States--US Libya
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787039759
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787039759?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fading Oil Rally Keeps a Lid On U.S. Stocks
Author: Josephs, Leslie; Puko, Timothy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 May 2016: C.4.
Abstract:
First-quarter profits for S&P 500 companies are on track to fall 7.1% in the first quarter from a year earlier, according to FactSet.
Full text: Energy shares rallied, but major U.S. stock indexes were little changed ahead of a key reading on U.S. employment. Investors have been cautious for most of the week, questioning the strength of a recent rally amid a gloomy earnings season and tepid global growth. One sign of investors' trepidation about the market and economy is that haven assets have remained strong. Gold prices, for example, are up 20% this year, while the yield on the 10-year Treasury note is off 0.5 percentage point so far this year. On Thursday, the yield on the 10-year note fell to 1.756%, from 1.786% on Wednesday. Bond prices rise as yields fall. The monthly U.S. jobs report, which is due Friday, will give investors an update on the U.S. economy and could shape expectations about the Federal Reserve's interest-rate policy outlook. Meanwhile, energy shares in the S&P 500 gained 0.7% Thursday as oil prices climbed. U.S. crude oil breached $46 a barrel, the fourth session in which it has risen above that level this year, but the rally faded throughout the afternoon and prices settled up 1.2% at $44.32 a barrel. The gains came amid threats to output in Libya, where there is political infighting, and Canada, where several oil-sands companies are shutting down or slowing operations because of fires in Alberta. However, analysts still caution that the rally might not be sustainable, with oil stockpiles hovering around record highs world-wide. The rise in energy shares wasn't enough to counter weakness elsewhere, such as in consumer-discretionary companies in the S&P 500, which fell 0.6%. "There's nothing good [today] other than the fact that oil prices are higher," said Ilya Feygin, managing director at broker WallachBeth. The S&P 500 fell 0.49 point to 2050.63. The Dow Jones Industrial Average rose 9.45 points, or 0.1%, to 17660.71, its smallest gain since November. The Nasdaq Composite fell for a third session in a row, losing 8.55, or 0.2%, to 4717.09. "Conviction on anything is very low," said David Hussey, a managing director at Manulife Asset Management. L Brands was the biggest laggard in the S&P 500, dropping $9.65, or 12%, to $70.53. Shares of the Victoria's Secret parent posted their biggest one-day percentage drop since February 2009, after the company reported lower-than-expected sales growth. Tesla Motors fell 11.03, or 5%, to 211.53 after the electric-car maker late Wednesday said its first-quarter loss nearly doubled from a year ago. Kraft Heinz gained 2.99, or 3.7%, to 82.97 after the packaged-food company reported a higher quarterly profit. Merck lost 72 cents, or 1.3%, to 54.09 after the pharmaceutical company posted a decline in quarterly revenue. First-quarter profits for S&P 500 companies are on track to fall 7.1% in the first quarter from a year earlier, according to FactSet. It would be the fourth-consecutive decline. That slump could boost stocks later in the year because companies will have a lower bar to compare their results against, said Rob Sharps, a portfolio manager at T. Rowe Price Group. But stocks could fall in the near term amid continued concerns about the global economy and weak corporate profits, he said. "I don't think we're up and away from here," Mr. Sharps said. The Stoxx Europe 600 index rose 0.3% to 332.86. In Asia early Friday, Japan's Nikkei was down 0.6%, while Hong Kong's Hang Seng Index was down 0.7%. Credit: By Leslie Josephs and Timothy Puko
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: May 6, 2016
column: Thursday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787051313
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787051313?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil's Rally Takes a Breather; Investors see Canadian wildfires, attack on Nigerian facility hampering crude output
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
[...]a militant attack on a Chevron Corp. platform off the coast of Nigeria crimped production there, and Baker Hughes Inc. said Friday that the number of rigs drilling for oil in the U.S. continued to decline, by four last week to 328, down 80% from their 2014 peak.
Full text: U.S. and global oil benchmarks posted their first losing week after four straight weeks of gains, as investors put the brakes on a months-long rally that saw prices rise more than 70%. Analysts said the market rally has run ahead of improvements in supply-and-demand conditions, as investors positioned for gains in the expectation that global production will come under control, and were pausing after such a strong surge. Both contracts pulled back from 2016 highs set last week, with the U.S. benchmark now down 3% and the global Brent benchmark down 5.8% from its peak this year. The halt in gains "could be interpreted as a sign of sense," Commerzbank said in a note. "This marks a shift in sentiment on the oil market which could also weigh further on prices in the near future." Despite oil's sharp rally this year, global oil stocks still increased by 1.95 million barrels a day in the first quarter of the year and will continue to do so in the second, according to Stephen Brennock, analyst at London oil brokerage PVM. Oil prices did shake off early losses Friday and end the day higher after reports that Canadian wildfires in Alberta's oil-sands producing region had spread and that some analysts were raising their estimates of lost production as high as 1 million barrels a day, much of which is normally destined for U.S. refineries. Canada is the largest exporter of crude to the U.S., sending 3.6 million barrels a day in February, according to U.S. Energy Department data. While there were no reports yet of fire damage to oil facilities, "The evacuation of staff in combination with the precautionary closure of pipelines is what is driving the drop in production," oil data service ClipperData said in a note. The U.S. oil benchmark ended the day 0.8% higher at $44.66 a barrel on the New York Mercantile Exchange, while the global Brent benchmark rose 0.8% to $45.37 barrel on the ICE Futures Europe exchange. Meanwhile, a militant attack on a Chevron Corp. platform off the coast of Nigeria crimped production there, and Baker Hughes Inc. said Friday that the number of rigs drilling for oil in the U.S. continued to decline, by four last week to 328, down 80% from their 2014 peak. In refined product markets, gasoline futures gained 0.3% to $1.4962 a gallon, and diesel futures rose 0.7% to $1.3373 a gallon. Write to Christian Berthelsen at christian.berthelsen@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Christian Berthelsen and Georgi Kantchev
Subject: Price increases; Futures
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Chevron Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787133069
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787133069?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Natural Gas Reverses Losses, Rises as Canada Wildfires Spread; Analysts were raising estimates of Canadian oil production taken offline
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
The U.S. Energy Department said Thursday that nationwide domestic gas stockpiles grew 68 billion cubic feet last week, slightly more than analysts expected and adding to end-of-winter storage levels that were already at a record high after a tepid winter that limited heating demand.
Full text: Natural-gas prices shook off early declines Friday and rose in tandem with oil and other energy contracts as Canadian wildfires spread, increasing estimates of lost production. Natural-gas futures were down as much as 1.5% in early trading but rallied as reports said Canada's wildfires were gaining ground. Natural-gas futures ended the day 1.2% higher at $2.1010 a million British thermal units on the New York Mercantile Exchange. Analysts were raising their estimates of Canadian oil production taken offline by the wildfires spreading in the Albert oil sands region, to as much as 1 million barrels a day. Though reports haven't yet said oil or gas facilities have been damaged by the fires, oil workers have been evacuated and the operations have been shut down as a precautionary measure. Canada is the largest exporter of oil and natural gas to the U.S., sending in 3.6 million barrels of crude and more than 8 billion cubic feet of natural gas a day in February. Analysts said the fires probably posed little direct threat to gas supplies, but the market may have risen in with other energy contracts out of a general sense of concern. The fires reversed otherwise bearish forces in the market. New weather forecasts pulled back from prior predictions of prolonged below-normal temperatures along the eastern seaboard into next week, and projected mild spring weather heading into late May. With spring temperatures in so-called shoulder season providing little impetus for either heating or cooling demand, expectations decline for natural gas demand to power air conditioning or heat homes. The U.S. Energy Department said Thursday that nationwide domestic gas stockpiles grew 68 billion cubic feet last week, slightly more than analysts expected and adding to end-of-winter storage levels that were already at a record high after a tepid winter that limited heating demand. Stockpiles are now 2.625 trillion cubic feet, nearly 47% higher than average for this time of year. Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen
Subject: Natural gas; Forest & brush fires; Petroleum production
Location: Canada United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787133080
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787133080?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Rosneft Sends First LNG Cargo to Egypt's Egas -- Update; Rosneft, Russia's state-owned oil company, delivered its first ever cargo of liquefied natural gas to Egypt's state-owned Egas under a long-term supply deal.
Author: Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
Rosneft (ROSN.MZ), Russia's state-owned oil company, has delivered its first ever cargo of liquefied natural gas.
Full text: Rosneft (ROSN.MZ), Russia's state-owned oil company, has delivered its first ever cargo of liquefied natural gas. Rosneft doesn't produce its own LNG and must source volumes from other producers. The purchase was made from the spot market, the company said in a statement. LNG traders were unsure which company the cargo had been bought from. The cargo was transported to Egypt's state-owned Egas, signaling the beginning of deliveries under a long-term supply deal between the two companies. The deal is for 24 cargo deliveries to Egypt by Rosneft, though only nine cargoes are firm. Intensifying demand turned Egypt into a net gas importer last year, but problems remain over payments. Earlier this year, several LNG traders told The Wall Street Journal that Egas had failed to adhere to its payment commitments because of a lack of foreign reserves in Egypt. Subsequently, Egas arranged an oil-products deal with Saudi Arabia for a three-month period. The intention of the deal was to free up foreign currency to pay for natural gas. The present cargo was delivered onboard the Golar Ice. Ship-tracking data shows the vessel now to be just off the coast of Oman and heading towards Qatar, suggesting that the delivery was made Wednesday or Thursday. Credit: By Miriam Malek
Subject: Natural gas; LNG
Location: Russia Egypt Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787133264
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787133264?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Four Fewer U.S. Oil Rigs in Latest Week; Total now down to 328, after peaking at 1,609 in October 2014
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs fell by one in the latest week to 86.
Full text: The U.S. oil-rig count fell by four to 328 in the latest reporting week, according to oil-field services company Baker Hughes Inc., maintaining an extended trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to tumble in 2014. But the U.S. total hasn't fallen enough to relieve the global glut of crude oil, experts say. The number of oil rigs in the U.S. peaked at 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs fell by one in the latest week to 86. The U.S. offshore-rig count was 24 in the latest week, down one from the previous week and down ten from a year earlier. Meanwhile, oil futures erased early price losses on Friday and drove higher as Canadian wildfires spread, further crimping oil production in the top supplier to the U.S., and an attack on a Nigerian production facility hampered output there. The U.S. crude price was recently quoted on Friday as being up 0.65% to $44.61 a barrel. Write to Ezequiel Minaya at ezequiel.minaya@wsj.com Credit: By Ezequiel Minaya
Subject: Crude oil; Oil service industry; Petroleum production
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787149508
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787149508?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil-Field-Equipment Makers Need Oil Prices Above $60 a Barrel; $63 a barrel is average forecast at industry gathering for price to signal upturn is taking hold
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
Bill Matthews, chief executive of WorkSite Lighting LLC, a Louisiana maker of safe lighting equipment with a focus on the oil and gas industry, said that during the last downturn, in 2009, customers didn't start buying his equipment until oil prices rebounded to $82 a barrel.
Full text: Small and medium-size oil-field-equipment companies attending an energy conference this week in Houston said oil prices need to go much higher before their corner of the industry starts seeing a meaningful recovery. Estimates from a Wall Street Journal survey of 50 equipment companies with exhibition booths at the OTC, or Offshore Technology Conference, showed an average forecast of $63 a barrel as the price that would signal the upturn is taking hold. On Friday, the U.S. benchmark oil price was trading at $45 a barrel. That is 12% higher from the beginning of the year but less than half what it was fetching in mid-2014 when the downturn began. "The oil-producing companies may be able to survive at $50 a barrel, their so-called break-even price," Melissa Eudy, sales executive at Ruff Equipment, a Magnolia, Texas, firm specializing in mud-processing at drill sites, told The Wall Street Journal. "But that doesn't mean they and the bigger services companies will be buying our equipment at that those levels. Once it goes above $60, that's when business really picks up." Ms. Eudy was speaking at Ruff's outdoor booth at the OTC, held at NRG Park, south of downtown Houston. The weeklong event attracts between 80,000 and 100,000 people each year for deal-making and demonstrations. Other equipment-makers say recovery in the oil-field equipment business needs oil prices even higher than the $60s range. Bill Matthews, chief executive of WorkSite Lighting LLC, a Louisiana maker of safe lighting equipment with a focus on the oil and gas industry, said that during the last downturn, in 2009, customers didn't start buying his equipment until oil prices rebounded to $82 a barrel. "I remember that price distinctly, that was the day purchase-orders started rolling in," Mr. Matthews said. "When prices were in the $60s and $70s, people were mostly only calling for price quotes--getting ready to buy, jockeying for position." Nonetheless, Mr. Matthews said the trigger point is probably lower than $82 this time around. Given the duration of this downturn, he said, the bigger companies have downsized significantly and improved efficiency, enabling them to start cranking up at a lower oil price. "The big companies have undergone not one, but two rounds of equipment liquidation where they sell at auction," he said. "They've also done debt restructuring. All of this will enable them to do more with less." Meanwhile, Hermann Twickler, managing director of PetroHab LLC, a firm with offices in Houston and Scotland that makes modules for welding at oil sites, said the oil price isn't the most important factor. "Come on guys, we're not at $15 a barrel here. Were at $45. The real key is figuring out how to push operating costs lower," he said. "We can all do well and profit, and we are, even at current prices." Write to Dan Molinski at Dan.Molinski@wsj.com Credit: By Dan Molinski
Subject: Price quotations; Crude oil prices
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787154879
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787154879?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Oil Rig Count Down by 10; Now about 72% fewer rigs of all kinds since peak in October 2014
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs declined in the latest week by four to 88.
Full text: The U.S. oil-rig count fell by 10 to 362 in the latest week, according to Baker Hughes Inc., maintaining a trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to fall. But it hasn't fallen enough to relieve the global glut of crude. There are now about 78% fewer rigs of all kinds from a peak of 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs declined in the latest week by four to 88. The U.S. offshore-rig count was 26 in the latest week, down two from the previous week and down five from a year earlier. Oil prices tumbled Friday after comments from a Saudi royal family member cast more doubt on a deal for major global exporters to cap output. Saudi Arabia's deputy crown prince, Mohammed bin Salman, said in an interview with Bloomberg News that the kingdom will freeze its oil output only if Iran and other major producers agree to curb theirs. Recently, U.S. crude oil fell 3.65% to $36.94 a barrel. Write to Ezequiel Minaya at ezequiel.minaya@wsj.com Corrections & Amplifications An earlier version of this article miscalculated the percentage drop in oil rigs from the peak in October 2014. The number of oil rigs dropped 78% from the peak, not 72%. (May 6, 2016) Credit: By Ezequiel Minaya
Subject: Oil service industry; Supply & demand
Location: Iran United States--US Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Bloomberg News; NAICS: 519110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787154966
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787154966?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
A Feat of Literary Conjuring; There's not a boring page in this fittingly chaotic chronicle of our 21st-century oil rush.
Author: Sacks, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
[...]Welles professes no supernatural insight--"books always know more than their authors do"--and claims that his poem was inspired by a true historical figure. [...]we're swept onto Venice in 1592 to follow the exploits of a secret agent called Crivano whose mission is to smuggle, through bribery or kidnapping, the city's mirror-makers to Constantinople, giving the Ottomans a monopoly on the craft.
Full text: Deep in Martin Seay's "The Mirror Thief" (Melville House, 582 pages, $27.95), a bookseller in 16th-century Venice comments on the speech given by a renowned philosopher and alleged master of the occult. "It is a rare rhetorical gift," he observes, "that permits a man to speak knowledgeably about a topic and still deliver his audience into a state of enriched confusion. At times I think this skill chiefly defines the profession of magus." A magus, sure. But the production of enriched confusion is equally a talent of the most adventurous novelists, and it is one that Mr. Seay confidently deploys in his wondrous debut, a deliciously intricate, centuries-spanning tripartite tale of money and mysticism. The story begins in a place stranger than fantasy, Las Vegas. It's 2003, and ex-Marine Curtis Stone is an angling for promotion to head of security at an Atlantic City casino, which has just been hit for millions by an elite team of card-counters. He has been dispatched to Vegas--he stays in the Venetian-themed Doge's Palace, one of the countless parallels that blossom into significance as the book advances--to track down the brains of the operation, legendary gambler and self-proclaimed clairvoyant Stanley Glass. Stone doesn't find his man, but he does come across "The Mirror Thief," an arcane volume of 1950s poetry about a Renaissance alchemist which may encode the secrets of Glass's wizardry at blackjack. Part two leaps to 1958 Los Angeles, where Glass, a Brooklyn-born teenage grifter with a savant's gift for pattern recognition, has made a pilgrimage to find the author of "The Mirror Thief" and unravel its enigmas. There, in the Beat scene of Venice Beach, he confronts the aging poet Adrian Welles. But Welles professes no supernatural insight--"books always know more than their authors do"--and claims that his poem was inspired by a true historical figure. Thus we're swept onto Venice in 1592 to follow the exploits of a secret agent called Crivano whose mission is to smuggle, through bribery or kidnapping, the city's mirror-makers to Constantinople, giving the Ottomans a monopoly on the craft. Mr. Seay entwines this profusion of plots together with a cunning system of mirroring. Just as the sections present three different Venices, uncanny reflections appear in the characters and story twists, always slightly altered. Crivano, like Stone, is a wounded war veteran (he fought in the Battle of Lepanto) involved in a scheme that turns out to be far more elaborate and dangerous than he had bargained for. The obsessive gamblers have their analogue in the alchemists who co-opt Crivano's mission, believing that mirrors are needed to make gold from base metals. Corpses keep surfacing in bodies of water. Even words carry tricky echoes: At one point Crivano, fleeing Venetian authorities, ducks into a casino, which in this context simply refers to a type of lodging house. The book's structure has much in common with David Mitchell's "Cloud Atlas" (2004), whose nested stories are loosely linked by an eponymous musical composition. But where Mr. Mitchell's cosmology is governed by reincarnation, Mr. Seay treats the supernatural as an ungraspable mystery, glimpsed in a glass darkly ("What if [the world] is just a reflection of something else," Glass asks Welles) but never fully understood. The immortal yearning to take occult powers in hand drives each story to a thrilling ending. Mr. Seay has conjured his own kind of sorcery, a sophisticated thriller that keeps the pages turning even as it teases the mind. In her fifth novel, "Heat and Light" (Ecco, 430 pages, $26.99), Jennifer Haigh returns to Bakerton, the fictional central Pennsylvania town in which she set two previous books. The occasion this time is the sudden advent of fracking, which, after years of coal mining and strip mining, is just the latest means of extracting energy from a state whose true interest "is what lies beneath." By taking on such a politically divisive issue, Ms. Haigh is vulnerable to what you might call Barbara Kingsolver syndrome--dressing up sententious lectures in a gauze of melodrama. But as she demonstrated in 2011's "Faith," a deft and unpredictable novel springing from the Catholic Church sex-abuse scandal, she knows how to isolate persuasive local conflicts from national news stories. There are plenty of conflicts in Bakerton once its residents begin leasing their land to a fly-by-night Texas fracking company. Police officer Rich Devlin sees the windfall as a chance to start a dairy farm, but hasn't quite thought out the consequences of living with gas wells in his backyard--the chopped-down trees, blinding lights and unholy noise, as well as the danger of water contamination, a claim disputed by the company but readily believed by Devlin's hypochondriac wife, who joins a protest group. The turmoil in the Devlin household is representative of Bakerton's working class. "There are two kinds of work," one character notes, "the kind where you shower before and the kind where you shower after." Ms. Haigh's large cast are mostly shower-afterers. Liquor sales skyrocket from the arrival of out-of-state contractors, but so does the meth trade. A thriving cottage industry of personal-injury lawsuits also gets going. Environmental groups flock to the town, exploiting its unsettled residents just as opportunistically as the gasmen. It's the ugly, immediate particulars of this upheaval, rather than any long-term effects of fracking, that concern Ms. Haigh. "Heat and Light" focuses on the Devlins, but rapidly crosscuts to the intersecting stories of their neighbors and associates, producing a motley, disordered portrayal of rash decisions and bad behavior. There's not a boring page in this fittingly chaotic chronicle of our 21st-century oil rush. Louise Erdrich continues to mine the darker seams of human nature. "The Plague of Doves" (2008) began with a lynching; "The Round House" (2012) opened with a rape. "LaRose" (Harper, 373 pages, $27.99), the final work of this loosely connected trilogy, starts when a North Dakota Ojibwe man kills his sister-in-law's child in a hunting accident. He and his horrified wife decide to seek expiation in "the old way," by giving the grieving parents their own five-year-old son. The slow story, full of alcoholism, suicidal nightmares, long-held vendettas and endless shades of guilt, rivals Hardy for gothic bleakness (the primal schism at the outset brings to mind "The Mayor of Casterbridge"). It feels like something of a capstone to Ms. Erdrich's recent gray period. Her choral-voiced early books, such as the school syllabus staple "Love Medicine" (1984), juggled tragedy and comedy together. "LaRose" offers a unified vision of human suffering, which, however compelling, allows little space for life's other emotions. Credit: By Sam Sacks
Subject: Books
Company / organization: Name: Mirror Group Newspapers; NAICS: 511110; Name: Melville House; NAICS: 511130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: Arts
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787155101
Document URL: https://login.ezproxy.uta.edu/login?url=https://search.p roquest.com/docview/1787155101?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
'Extreme' Fire Guts Canadian Town's Future; Blaze jumped broad river, forcing rapid evacuation of oil-sands hub Fort McMurray and leaving residents anxious over when they will return
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 May 2016: n/a.
Abstract:
The fires continued to rage on Friday as an estimated 15,000 of the evacuees who earlier in the week fled to towns and worker camps north of Fort McMurray were evacuated again, and sent south in a convoy of cars stretching toward the provincial capital of Edmonton, 270 miles from Fort McMurray.
Full text: EDMONTON--By the time Nasir Rehmani, his wife, and three daughters fled their Fort McMurray home, Mr. Rehmani could see flames racing up fir trees across the road and hear the crackling and popping sound of the blaze only about 150 yards away. Mr. Rehmani, the 55-year-old manager of a work-camp lodge, and his family fled the five-bedroom house they had bought only in September on Tuesday afternoon, when officials issued a hasty mandatory order to evacuate Fort McMurray of 80,000 people. A sudden gust of eastward wind had pushed the blaze from the town's periphery through several neighborhoods and across the Athabasca River, catching officials off-guard and leading to the sudden evacuation of the whole town. "I was crying when we drove away," said his wife, Shahnaz. "This fire has jumped the Athabasca River, which is over a kilometer wide," Chad Morrison, Alberta's manager of wildfire prevention, told a briefing in Edmonton on Friday. "This is an extreme, rare fire event and this is something that's historic for us." The fires continued to rage on Friday as an estimated 15,000 of the evacuees who earlier in the week fled to towns and worker camps north of Fort McMurray were evacuated again, and sent south in a convoy of cars stretching toward the provincial capital of Edmonton, 270 miles from Fort McMurray. Provincial officials said on Friday it would take up to four days to escort convoys of 50 vehicles at a time back through Fort McMurray along its main arterial road. The route is giving residents a brief, sobering look at their hometown's charred remains. The Rehmanis arrived in Edmonton on Friday morning, after spending three nights in an oil-sands camp, with the three duffel bags they hurriedly packed. Two of the bags contained documents, including paperwork granting them permanent residency in Canada after they migrated from Pakistan in 2012. "We'd like to go back [to Fort McMurray], but I don't know when that will be possible," Mr. Rehmani said. "I have no idea what we're going to do now." Alberta Premier Rachel Notley made it grimly clear Friday that "the city of Fort McMurray is not safe to return to and this will be true for a very long time." The scale of the disaster is fueling worries about rebuilding, particularly since it comes during a severe energy industry downturn that has already led some to question the oil-sands industry's ability to bounce back. Insurance costs to cover the massive amount of damage range between 4 billion Canadian dollars (US$3.1 billion) and C$10 billion, some insurers and analysts estimate. Over the next one or two years, cleanup and rebuilding of the area could cost an estimated C$4 billion and require the temporary accommodation of up to 30,000 workers, National Bank Financial said. Due to the fires, producers reduced crude-oil output by at least 645,000 barrels a day, or almost a quarter of oil-sands production, and producers can't say how long the outages will last. There is no reported damage to oil-sands facilities. Related * Canada's Wildfire: Then and Now The disaster hitting Fort McMurray, the industry's hub, couldn't come at a worse time for the sector, which has already suffered from massive layoffs, production cuts and bankruptcies amid low energy prices. High fixed costs and long development times mean the oil sands are unlikely to see investment and growth return quickly, even when energy prices rebound. For more than a decade before the oil price collapse of 2014, Fort McMurray was the epicenter of a Canadian oil boom, as exports to the U.S. soared. But as the price of oil has slumped, thousands of workers have been laid off. The town's unemployment rate hit 9.8% in March, according to the national statistics agency, twice the rate five years ago. "We have been a community fighting an uphill battle for a long time in terms of the rate of changing growth that we've been experiencing," Mayor Melissa Blake said Wednesday. Officials emphasized the unusual nature of the fire in explaining why it has been so hard to contain, and why it lead to such a sudden evacuation. When Tiffany Smith, 26, ran into a grocery store in Fort McMurray on Tuesday afternoon, the sun was shining brightly. By the time she exited a few minutes later, thick black smoke covered the sky. Rushing home to the bungalow she shared with her sister, she said flames were visible. As Ms. Smith and her sister fled in her pickup truck, the flames were close enough to the road to touch, she said. "I was really worried we might not make it. Everybody was trying to leave and there was only one road out," she said on Friday at the Edmonton airport. There she was reunited with her mother, who has also been evacuated. Nancy Robin, 34, said Tuesday started out normally, but that like many residents of Fort McMurray she was caught off-guard by the fire's rapid spread. Driving toward her son's school she noticed traffic streaming in the other direction and then saw ominous black clouds in the sky. "It was like a mushroom cloud," she said. Picking up her son from his school, she could see flames in the woods about a quarter of a mile away, and the smoke-laden air made it difficult to breathe. "The students were lucky to make it out," she said. At the province's biggest evacuation center, an exhibition hall on the Edmonton Stampede fairgrounds, thousands of people lined up to register with officials, file insurance claims and find temporary shelter. In the parking lot, local residents distributed free diapers, toothbrushes and dog food, donated by residents and local businesses. "We've given away tons of dog food" to evacuees, said Jory Lindstrom, 32, who took a half-day off work to distribute donations from the back of a pickup truck. "Fort McMurray makes us tick. It's what runs the province," she said in sympathy with the disaster-struck town to the north. Ben Dummett and David George-Cosh contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil sands; Provinces; Energy industry
Location: Athabasca River
People: Notley, Rachel
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 6, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787188357
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787188357?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi Arabia Dismisses Its Powerful Oil Minister Ali al-Naimi; Departure is part of wider government reshuffle, with Saudi Aramco chief Khalid al-Falih succeeding him
Author: Summer Said; Ahmed Al Omran; Bill Spindle; Said, Summer; Ahmed Al Omran; Spindle, Bill
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2016: n/a.
Abstract:
Jim Krane, a fellow at Rice University's Baker Institute, said Mr. Falih's appointment to head an oil ministry broadened to include electricity and other resources would allow the kingdom to better coordinate its domestic energy policy with its oil export policy.
Full text: RIYADH--Saudi Arabia dismissed its long-serving oil minister Ali al-Naimi on Saturday, marking the departure of one of the industry's most powerful figures, as the country grapples with weak oil prices . Mr. Naimi, who had been the kingdom's oil minister since 1995, has been a strong voice against lowering Saudi Arabia's production when prices fall, a move away from its past tactics. He moved the Organization of the Petroleum Exporting Countries to keep pumping oil at a rapid clip despite a global supply glut, a decision that has weighed on crude-oil markets and depressed prices. He will be succeeded by Khalid al-Falih, chairman of state oil company Saudi Arabian Oil Co., better known as Saudi Aramco. Mr. Naimi, reached on his cellphone, declined to take questions. Mr. Falih couldn't be reached for comment. Related Articles * Departure Is Latest Catalyst for Crude * Monarchy Intervenes on Output Policy (April 19) The royal decree, announced via state media, was part of a wider government reshuffle that includes a restructuring of the oil ministry, which has been renamed the Ministry of Energy, Industry and Mineral Resources. It comes less than two weeks after Saudi Arabia unveiled an ambitious economic reform program aimed at reducing the kingdom's dependence on oil revenue. The collapse of oil prices has hit the world's biggest energy companies hard and has hurt the budgets of oil-dependent countries. In Saudi Arabia, the world's largest oil exporter, petroleum accounted for almost three-quarters of state revenues last year. The 80-year-old Mr. Naimi had for some time wanted to retire. His departure and Mr. Falih's appointment were widely expected, suggesting market reaction to the moves is likely to be calm, said Jason Bordoff, director of Columbia University's Center on Global Energy Policy. "Khalid al-Falih has been a key part of the team making these decision for many years," he said. "It represents a continuation of the path they've been on." Mr. Falih has been within the inner circle of Saudi oil policy-making for a long time. He was being groomed for the top post for months, according to people familiar with the matter. The decree said Mr. Falih was relieved from his other post of health minister. Jim Krane, a fellow at Rice University's Baker Institute, said Mr. Falih's appointment to head an oil ministry broadened to include electricity and other resources would allow the kingdom to better coordinate its domestic energy policy with its oil export policy. In the past, the two have often worked at cross-purposes, as domestic consumption of heavily subsidized energy has risen, undermining the state oil company's ability to expand exports. Saudi Arabia's powerful Deputy Crown Prince Mohammed Bin Salman has already pushed through cuts in those subsidies, effectively raising the price of gasoline and other fuels for Saudi citizens. Meanwhile, the kingdom has expanded its refining capacity, creating new internal demand for crude oil. "They need a ministry that can take a more holistic approach to energy in the kingdom," Mr. Krane said. "They're working to rationalize their energy policy." Mr. Naimi, known in oil industry circles as a technocrat's technocrat, appeared to be losing his grasp on power when a meeting of major oil producers aimed at reaching an output-freeze agreement collapsed less than a month ago. The Saudi oil ministry had signaled it was ready to reach a deal with counterparts from Russia, Qatar and Venezuela to freeze their output at January levels. But the efforts were scuttled because the prince wasn't willing to agree to a deal that didn't include Iran, which had said it wouldn't participate as it ramps up output following the end of Western sanctions over its nuclear program. "It was very clear that Naimi was being overruled by a royal for the first time in two decades and that was a very humbling experience for him," said an oil minister who attended the meeting. For Mr. Naimi, that marked the end, according to one of his assistants. "We all knew after the Doha meeting that it was only a matter of time before he is gone," one of Mr. Naimi's assistants said. Throughout his career, Mr. Naimi has worked to avoid a repeat of the mistake of one of his predecessors, Sheikh Zaki Yamani, who was dismissed in 1986 as he unsuccessfully tried to fight an oil-price collapse by unilaterally reducing Saudi output. Mr. Naimi was named oil minister in 1995 by Saudi King Fahd bin Abdulaziz Al Saud. He took office at an uncomfortable time for the kingdom and OPEC, which it dominates. At the time, depressed oil prices had failed to rise enough to save oil producers from a continuing cash crisis. But Mr. Naimi soon carved out an identity and transformed himself from a competent manager into one of the world's key economic policy makers. As de facto head of OPEC, among the first changes Mr. Naimi made was to turn its periodic gatherings into corporate-style events. He was often successful at achieving Saudi Arabia's goals, while managing the expectations of those of adversaries within OPEC, such as Iran and Venezuela. The jury is still out on Mr. Naimi's signature policy of keeping the spigots open during periods of low prices. Prices fell farther and faster than many in Saudi Arabia expected, hitting a 13-year low in January of about $27 a barrel. At a conference in Houston in February, Mr. Naimi said the kingdom was prepared for oil prices below $20 a barrel and wouldn't change its strategy soon. The country is producing near-record production of more than 10 million barrels a day. Mr. Naimi reasoned that a period of low prices is needed to force producers that rely on high prices to cut back. When asked when the supply glut would end, he said: "When? I don't know, but it's going to end." Write to Summer Said at summer.said@wsj.com , Ahmed Al Omran at Ahmed.AlOmran@wsj.com and Bill Spindle at bill.spindle@wsj.com Credit: By Summer Said, Ahmed Al Omran and Bill Spindle
Subject: Supply & demand; Prices; Energy policy; Economic reform; Energy industry
Location: Saudi Arabia
People: Naimi, Ali I
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: Rice University; NAICS: 611310; Name: Columbia University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 7, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787271340
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787271340?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Departure of Saudi Oil Minister Latest Catalyst for Crude Prices; Analysts differ on what is next for oil production after Ali al-Naimi's tenure
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2016: n/a.
Abstract:
" "The market will take it as a bullish sign but it adds unpredictability as to what the Saudi's course of action will be," said Doug King, chief investment officer at RCMA Asset Management and manager of that firm's $240 million Merchant Commodity hedge fund.
Full text: NEW YORK--The dismissal Saturday of Saudi Arabia's long-serving and influential oil minister could prove the next catalyst for crude prices, which have rallied lately. But Saturday, analysts differed on which way the news would cut. U.S. oil prices have surged 70% since hitting a 13-year low in February as traders wagered the global oversupply of crude is set to shrink. But throughout the climb, Saudi Arabia's next steps have remained an outstanding question. Large oil-producing nations, including Saudi Arabia, last month failed to agree on a deal to freeze output, and some analysts have said these countries could ramp up production further as they compete for market share. Some also viewed that meeting, in Doha, Qatar, as signaling the waning influence of the departing Saudi oil minister, long-serving Ali al-Naimi. Saudi Arabia had appeared willing to make an output freeze deal but then changed its stance. If he were inclined to curb production, but others above him weren't, his departure could mean increased output, some said Saturday, referring in particular to Deputy Crown Prince Mohammed bin Salman, who has indicated the country could ramp up production. "Mohammed bin Salman has changed everything," Helima Croft, head of commodities strategy at RBC Capital Markets, said Saturday. "He doesn't feel the economic burden to have to cooperate with OPEC," referring to the Organization of the Petroleum Exporting Countries. The potential for Saudi Arabia to increase its oil production in the coming months is "definitely a concern" for the oil market, said Michael Cohen, head of energy markets research at Barclays PLC, on Saturday. Others saw the news as positive prices. "I think this is going to be interpreted as being bullish for the oil prices," said Dominick Chirichella, analyst at the Energy Management Institute. The change in leadership "allows them to backtrack on the market share strategy without really losing a whole lot of face." "The market will take it as a bullish sign but it adds unpredictability as to what the Saudi's course of action will be," said Doug King, chief investment officer at RCMA Asset Management and manager of that firm's $240 million Merchant Commodity hedge fund. OPEC decided in November 2014 not to cut its production to lead oil prices higher. That decision, led by Saudi Arabia, was a departure from the group's past policies and sent prices to multiyear lows. Analysts said Saudi Arabia was expecting low prices to force high-cost oil production, including U.S. shale output, out of the market. Since then, companies have slashed spending on new drilling. Many investors and analysts expect the global glut of crude to disappear by the end of this year or early next year. Meanwhile, recent reports that Saudi Arabia had sold a spot cargo of oil to Asia spooked traders, as it was a departure from the country's usual strategy of selling oil using long-term contracts. If Saudi Arabia is willing to sell oil on the spot market, that would make it easier for the country to increase its exports quickly, said Citigroup analysts in a note late last month. "It looks increasingly likely that the Kingdom is targeting another [500,000 barrels a day] of sales," the bank said. "This battle to secure market share appears to be the main driver of Saudi oil policy right now." The global crude market remains oversupplied by as much as a million barrels a day, analysts say, and stockpiles of crude oil around the world stand near record highs. Analysts have forecast that OPEC production rose in April. Official data is due to be released this week. U.S. oil prices settled Friday at $44.66 a barrel on the New York Mercantile Exchange, while global benchmark Brent closed at $45.37 a barrel on ICE Futures Europe. OPEC's next meeting is scheduled for June. Georgi Kantchev contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Market shares; Crude oil prices; Petroleum production; International markets; Price increases
Location: United States--US Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia Naimi, Ali I
Company / organization: Name: Barclays PLC; NAICS: 522110, 523110, 551111; Name: RBC Capital Markets; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787276781
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787276781?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi Arabia's King Salman Shakes Up Government Ministries; Changes coincide with a plan to reduce dependence on oil and boost foreign investment
Author: Ahmed Al Omran
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2016: n/a.
Abstract:
RIYADH--Facing low oil prices and diminishing foreign-exchange reserves, Saudi Arabia's King Salman has shuffled top policy makers, including his long-serving oil minister and central-bank governor.
Full text: RIYADH--Facing low oil prices and diminishing foreign-exchange reserves, Saudi Arabia's King Salman has shuffled top policy makers, including his long-serving oil minister and central-bank governor. The sweeping changes announced Saturday coincide with a plan to reduce Saudi Arabia's dependence on oil and boost foreign investment, as well as other sources of revenue such as tourism. The plan, announced last month by the king's 30-year-old son, Deputy Crown Prince Mohammed bin Salman, marks the kingdom's most ambitious effort yet to overhaul its economy and shift away from oil, which accounted for more than 70% of government revenue last year. Saturday's shuffle was also the latest in a rapid wave of changes led by King Salman and his son since the king ascended to the throne in January 2015. The government has slashed its spending and announced cuts in subsidies for fuel, water and electricity. While many of these changes were long overdue, the prolonged period of cheap oil and an employment rate of 11.7% has put more strain on the state's finances and added a sense of urgency to the monarchy's actions. "The changes are natural, given the economic shifts announced by Prince Mohammed bin Salman in April," said Simon Kitchen, strategist at Cairo-based EFG Hermes. The kingdom is expected to announce a detailed package of reforms in late May or early June. Oil minister Ali al-Naimi, who has served in that position since 1995, was replaced with Khaled al-Falih , chairman of the national oil company Aramco. The ministry has also been renamed to become Ministry of Energy, Industry and Mineral Resources. Mr. al-Naimi will become an adviser to the royal court. Mr. al-Falih had served until Saturday as health minister, before being replaced in the shuffle with Tawfiq al-Rabia, the former minister of commerce. New ministers for transportation, hajj, and social affairs were also appointed. In a key change at the central bank, Governor Fahad al-Mubarak was replaced with Ahmed al-Khelaify, who has been serving as the bank's deputy governor for research and international affairs. Mr. al-Mubarak had come under intense pressure in recent months amid fast dwindling foreign-exchange reserves and rising bets against the local currency's peg to the U.S. dollar. The riyal is fixed at roughly 3.75 to the dollar, but one-year forward contracts hit multiyear highs in the past months on speculation that the kingdom will be forced to let go of the nearly 30-year old peg to better manage a fiscal deficit that widened to a record of nearly $98 billion last year. A sharp fall in the price of oil since the middle of 2014 has put immense pressure on Saudi Arabia's petrodollar-dependent economy. Its foreign-exchange reserves declined to $587 billion at the end of March, down more than 21% from a peak of $746 billion in August 2014, according to the latest central-bank data. It spends billions to maintain the currency peg, according to analysts. Saudi Arabia's currency peg has worked well in the past, giving it stability as it enjoyed a decade of expensive oil, a commodity priced in dollars and the kingdom's main revenue earner. But that income has slumped, straining the kingdom's finances. Abandoning the peg would stretch those dollars because the riyal would weaken. Most analysts, however, don't see the country abandoning its peg in the near to mid term, as repayment costs for households and companies that have borrowed in foreign currencies would rise in local-currency terms. And inflation would likely soar due to a rise in the price of imports. Spearheading the response to these challenges has been Prince Mohammed, who also heads the country's Council of Economic and Development Affairs, a government body created last year with a mandate of handling domestic policy. The plan--dubbed Saudi Vision 2030--aims to make investment replace oil as the main source of revenue by creating what officials described as the world's largest sovereign-wealth fund. In a step to increase the number of visitors to Saudi Arabia, the Ministry of Hajj has been renamed to become the Ministry of Hajj and Umrah, an indication of a new focus on religious tourism. Umrah, also known as the lesser pilgrimage, is seen as a potentially lucrative field for the kingdom, which was host to around eight million umrah pilgrims last year. Saudi Arabia wants to increase that number to 15 million by 2020. The king also established two new commissions for culture and entertainment, another area where Saudi decision makers see potential for growth in a country that still doesn't allow movie theaters. As part of the restructuring, the king canceled the Ministry of Water and Electricity. Management of the kingdom's scarce water resources will move to the Ministry of Agriculture, which has been renamed to become the Ministry of Environment, Water and Agriculture. Nikhil Lohade contributed to this article. Write to Ahmed Al Omran at Ahmed.AlOmran@wsj.com Credit: By Ahmed Al Omran
Subject: Foreign exchange controls; Tourism; Currency; Governors
Location: Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia Naimi, Ali I
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 7, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Busi ness And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787281264
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787281264?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Fires in Canada's Oil-Sands Region Grow; Officials scramble to evacuate thousands more people in Northern Alberta
Author: George-Cosh, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2016: n/a.
Abstract:
The forest fires have crimped oil-sands production and threaten to weigh on the country's economic output.
Full text: Raging wildfires in Canada's oil-sands hubs threatened to double in size over the weekend despite firefighters' efforts, while officials scrambled to relocate evacuees who had fled to areas north of Fort McMurray, Alberta. Officials planned to evacuate about 6,000 people from areas north of Fort McMurray either by car or air, Premier Rachel Notley said during her latest news conference on Saturday. About 25,000 residents of the nearly 80,000 who left the affected area fled north to seek shelter at oil-sands worker camps and other facilities. Those camps are running out of supplies, and the evacuees are now being directed south, where evacuation centers have been set up in larger cities such as Edmonton, Alberta's capital. More than 500 firefighters, 15 helicopters and 14 air tankers are trying to put out the fires in Fort McMurray, which grew by nearly 50% in the past day to now cover 360,000 acres, or about half the size of the state of Rhode Island, Ms. Notley said. Although winds on Saturday pushed the blaze to the northeast of Fort McMurray--an area officials said doesn't present a major risk to the town--weather conditions are significantly worse and the fire could double in size, approaching the province's border with Saskatchewan. A hamlet near Fort McMurray of about 450 people was put under a voluntary evacuation order on Saturday, Ms. Notley added. "In no way is this fire under control," Ms. Notley said. The fires, which started last week, spread from a forested area southwest of Fort McMurray and on Monday crossed the river, which bisects the town. They began to threaten residential neighborhoods by midday Tuesday, prompting evacuations. Alberta, which declared a state of emergency this week, has implemented a provincewide fire ban to help prevent any new wildfires. The province also banned recreational off-highway vehicles on Friday. Several blazes around Fort McMurray are considered to be out of control, but the town's airport, hospital and water-treatment facility remain intact, Ms. Notley said. The province will spend 100 million Canadian dollars (US$77.3 million) to provide emergency assistance to individuals affected by the fires, she said on Friday. More Coverage * 'Extreme' Fire Guts Canadian Town's Future "It's too early to tell what exactly will happen but we're still in an extreme fire condition," said Chad Morrison, Alberta's manager of wildfire prevention on Saturday. "The good news is that it continues to move away from the community and oil-sands facilities." The forest fires have crimped oil-sands production and threaten to weigh on the country's economic output. Some of Canada's largest deposits are in the ground around Fort McMurray. Many oil companies have evacuated staff and cut production because of pipeline outages and the risk from encroaching blazes. The fire hasn't damaged the operation of any oil-sands producers, said Ralph Goodale, Canada's Public Safety Minister, during a briefing on Saturday. But Syncrude Canada Ltd. said Saturday it is shutting down its Mildred Lake and Aurora facilities north of Fort McMurray as a precaution against the encroaching blaze. "There is no imminent threat from the fire. However, smoke has reached [the] Mildred Lake site," Syncrude said in a statement. The facilities can produce up to 350,000 barrels of oil a day. A Syncrude spokesman declined to specify the amount of production being cut as a result of the shutdown, but the facilities had already been operating at "minimal" levels due to risks posed by the fire. About 1,500 workers were evacuated from the Syncrude facility, Ms. Notley said. Different producers have already shut-in at least 645,000 barrels, or almost one-quarter of Canada's 2.5 million barrels in total oil-sands production, as part of their efforts to ensure worker safety at their operations. Much of that output is sent to refineries in the U.S. Economists at Bank of Nova Scotia have said the forest-fire fallout could mean "very little" gross domestic product growth in Canada in the second quarter. The town of Fort McMurray became the symbol of Canada's oil boom in the last decade, attracting some of the world's biggest energy producers amid a rush to build megaprojects to extract nearby oil sands. Thanks to the influx of investment from producers such as Shell and Exxon Mobil, thousands flocked to "Fort McMoney" as the city spent millions building heated bus shelters, schools, bridges and hockey arenas to accommodate its rapidly growing and affluent population. The evacuation is the largest in Alberta's history, forcing residents in more than 12 northern communities including Fort McMurray to leave their homes, according to the Canadian Red Cross. Ben Dummett, Judy McKinnon and Kim Mackrael contributed to this article. Write to David George-Cosh at david.george-cosh@wsj.com Credit: By David George-Cosh
Subject: Oil sands; Forest & brush fires; Evacuations & rescues
Location: Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 7, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787281459
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787281459?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Rivals, Admirers Lament Saudi Oil Minister's Exit; Ali al-Naimi was a singular force in global oil markets for over 20 years
Author: Williams, Selina; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2016: n/a.
Abstract:
U.S. crude oil imports from Saudi Arabia and other Middle East oil exporters fell and, as economic growth in China slowed, the market became glutted.
Full text: For more than 20 years, Ali al-Naimi was a singular force in global oil markets as Saudi Arabia's oil minister, tangling with his Iranian counterpart, charming Texas oilmen and keeping a lid on the fractious rivalries within the Organization of the Petroleum Exporting Countries. Now Mr. Naimi is leaving the oil ministry in a move announced Saturday by King Salman, after the global energy landscape shifted beneath Mr. Naimi and forced the kingdom to begin wrestling with a future that one day doesn't include petroleum. Mr. Naimi will become an adviser to King Salman's royal court. Related * Saudi Arabia Dismisses Its Powerful Oil Minister Ali al-Naimi * Saudi Arabia's King Salman Shakes Up Government Ministries * Departure of Saudi Oil Minister Latest Catalyst for Crude Prices Mr. Naimi's departure left rivals and admirers lamenting the loss of nearly 70 years of experience in the oil industry. Saudi Arabia has had other high-profile oil ministers, but some longtime observers say Mr. Naimi had a combination of longevity, influence and circumstances that set him apart. "He provided confidence, security and stability during some very difficult times for the oil industry," said Saad al-Husseini, an energy consultant and former chief of exploration and development at state-controlled Saudi Arabian Oil Co., or Saudi Aramco. Mr. Naimi, reached by cellphone on Saturday, declined to take questions. He had long talked about retiring. Born in Saudi Arabia's east just as oil was discovered there, Mr. Naimi tended sheep before starting as an errand boy at Aramco at the age of 12 in 1947. Mr. Naimi studied in the U.S. and then rejoined the company, marching quickly through the ranks of what became known as Saudi Aramco. He became president in 1984 and chief executive officer in 1988. He was named oil minister in 1995 by Saudi King Fahd bin Abdulaziz Al Saud. When Mr. Naimi took over the oil ministry, crude prices traded steadily between $16 and $18 a barrel and the kingdom was firmly in charge of OPEC, which then controlled 43% of the world's oil production. Now, prices are increasingly volatile, plunging more than 75% between June 2014 and January 2016 to $27 a barrel before rallying back up another 60% since to about $45 a barrel. OPEC now pumps around a third of the world's oil and no longer exerts the influence it once had. Advances in drilling technology unlocked new oil and gas reserves embedded in shale rock in North America. Production in the U.S. grew to 9.4 million barrels a day in 2015 from around 5 million barrels a day at the start of 2008, as drillers tapped fields from Texas to North Dakota in a development that reshaped global oil trade. The result: U.S. crude oil imports from Saudi Arabia and other Middle East oil exporters fell and, as economic growth in China slowed, the market became glutted. On any given day, oil supplies now outpace demand by more than 1 million barrels a day across the world. "Mr. Naimi and OPEC were undermined by the growth in U.S. shale oil production," Mr. Husseini said. "It was something [Mr. Naimi] couldn't manage," he added. Mr. Naimi had found ways to manage other oil-market crises. In the late 1990s, he made a historic deal with Saudi Arabia's rival Iran so that OPEC could pull back on oil supplies and raise prices, which had crashed to lower than $10 a barrel. He managed a similar feat in 2009, after the financial crisis tanked economies across the world and dealt a blow to oil demand. He also oversaw Saudi Arabia ramping up output in the run up to the second Gulf War when Iraq's supplies were threatened and pumping near to capacity at the height of the commodity boom in the 2000s when China's energy demand surged. All the while, Mr. Naimi became a celebrity in the world's oil industry. Reporters would wait in Vienna's hotel lobbies for Mr. Naimi to appear for his morning walk before OPEC meetings in his brightly colored athletic shoes. He turned OPEC gatherings into corporate-style events and went bird hunting with American executives such as Scott Sheffield, chief executive of Pioneer Natural Resources Co., who said Saturday that Mr. Naimi "had a storybook career" and that he "always admired his humbleness and leadership skills." But Mr. Naimi also developed a reputation for being short-tempered and unwilling to bend. At a June 2011 meeting that ended without a decision, he got into a heated argument with Algerian and Iranian delegates who refused to agree on an output increase. Still, Mr. Naimi picked up a level of respect from his adversaries, including in Iran, the kingdom's rival for power in the Middle East. Mr. Naimi was a tough negotiating partner, one Iranian oil official said in Tehran on Saturday, but "he was fighting for his country." Mr. Naimi's fortunes began to change in 2014, when oil prices began a long, swift decline as traders began taking in the huge global surplus built up by American production. In November 2014, Mr. Naimi led OPEC to take a historic decision: No longer would Saudi Arabia and OPEC support prices with production cuts . Then there was the death of Saudi King Abdullah in January 2015, who had long supported Mr. Naimi. An energetic new Deputy Crown Prince Mohammed bin Salman emerged with plans to wean his country off oil and Mr. Naimi's influence waned. The latest blow was the failure of talks in Doha last month with some of the world's biggest oil producers, including Russia, which intended to freeze output to halt slumping prices. The meeting collapsed in disarray as Iran, resurgent after the lifting of Western sanctions on its nuclear program, refused to attend. It was widely interpreted as the deputy crown prince overruling Mr. Naimi. Benoit Faucon and Erin Ailworth contributed to this article. Write to Selina Williams at selina.williams@wsj.com and Summer Said at summer.said@wsj.com Credit: By Selina Williams and Summer Said
Subject: Supply & demand; Petroleum industry; Petroleum production
Location: Texas United States--US Saudi Arabia
People: Naimi, Ali I
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 7, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787284798
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787284798?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distrib ution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
New Saudi Energy Minister Khalid al-Falih an Insider Signifying Policy Continuity; His tenure as chairman of Saudi Arabian Oil Co. marked by effort to modernize world's largest petroleum company
Author: Stancati, Margherita; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 May 2016: n/a.
Abstract:
According to the royal decree, he is Saudi Arabia's new Minister of Energy, Industry and Mineral Resources.
Full text: DUBAI--As head of the world's largest petroleum company, Khalid al-Falih was already one of the most powerful figures in the energy industry. Now as Saudi Arabia's energy minister, he will be shaping policy for the world's biggest exporter of crude, just as the nation embarks on an ambitious path to reduce its dependence on the fossil fuel. Mr. Falih, chairman of Saudi Arabian Oil Co., known as Saudi Aramco, was appointed to his post on Saturday by a royal decree. His promotion marks one of the most significant personnel changes in the nation's energy industry in decades. He succeeds Ali al-Naimi, who is in his 80s and had served as oil minister for more than 20 years. Despite the shake-up, Mr. Falih's elevation to energy minister also indicates a degree of continuity. Under Mr. Naimi, Saudi Arabia had been reluctant to cut production to boost low oil prices, and that policy is unlikely to change under Mr. Falih. Related Reading * Saudi Arabia Dismisses Its Powerful Oil Minister Ali al-Naimi * Saudi Arabia's King Salman Shakes Up Government Ministries * Departure of Saudi Oil Minister Latest Catalyst for Crude Prices "If prices continue to be low, we will be able to withstand it for a long, long time," Mr. Falih told the World Economic Forum in Davos earlier this year. "Obviously, we don't hope for that but are prepared for it." As with his predecessor, Mr. Falih is a technocrat who built his career by rising through the ranks of Saudi Aramco. "He is immensely knowledgeable and immensely experienced," Daniel Yergin, vice chairman of consulting firm IHS Inc., said. Mr. Yergin has known Mr. Falih for more than a decade. Mr. Falih is from the eastern Saudi province of Dammam and is a graduate of Texas A&M University. He joined Saudi Aramco more than three decades ago and was appointed as its president and chief executive officer in January 2009. His tenure was marked by an effort to modernize the company so it would operate more like independent western oil firms. He created several units there, beefing up its acquisitions unit, expanding its refining capacity and working to make the company more responsive to Saudi Arabia's growing domestic energy consumption. More recently, Mr. Falih created a mergers and acquisitions department in an effort to position Aramco to compete with publicly traded peers. After King Salman ascended to the Saudi throne last year, Mr. Falih became health minister and succeeded Mr. Naimi as chairman of Saudi Aramco, a reshuffle that made him a strong contender eventually to take the helm of the energy ministry. Before he was oil minister, Mr. Naimi had also served as Saudi Aramco's CEO. Mr. Falih will also continue to lead the company for now, Saudi officials said. While Mr. Falih's profile sends a message of continuity, he will be leading the energy ministry at a time of profound changes in the kingdom's policy environment. Mr. Falih's portfolio is technically broader than Mr. Naimi's. According to the royal decree, he is Saudi Arabia's new Minister of Energy, Industry and Mineral Resources. The new ministry's moniker suggests the kingdom's desire to reduce its dependence on oil and make petroleum just one of its core sources of income. But details about the restructuring of the ministry and how that will shape Mr. Falih's new role are still unclear. "Saudi Arabia is changing much faster than we were used to, and that will influence what he'll be able to do," said Robin Mills a Dubai-based energy analyst. "It's still not clear how [the ministry] is going to be run." The diversification away from oil is the focus of an economic reform plan dubbed Saudi Vision 2030 that the government unveiled last month under the leadership of Deputy Crown Prince Mohammed bin Salman. Mr. Falih is perceived as being close to the prince and aligned with his policy objectives. More details on the plan are expected to be released in coming weeks. Mr. Falih couldn't be reached to comment for this article. Erin Ailworth contributed to this article. Write to Margherita Stancati at margherita.stancati@wsj.com and Summer Said at summer.said@wsj.com Credit: By Margherita Stancati and Summer Said
Subject: Chief executive officers; Supply & demand; Appointments & personnel changes; Acquisitions & mergers; Energy industry
Location: Saudi Arabia
People: Naimi, Ali I
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: Texas A & M University; NAICS: 611310; Name: World Economic Forum; NAICS: 926110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 7, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787284923
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787284923?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fires in Canada's Oil-Sands Region Grow; Officials scramble to evacuate thousands more people in Northern Alberta
Author: George-Cosh, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 May 2016: n/a.
Abstract:
The forest fires have crimped oil-sands production and threaten to weigh on the country's economic output.
Full text: Raging wildfires in Canada's oil-sands hubs threatened to double in size over the weekend despite firefighters' efforts, while officials scrambled to relocate evacuees who had fled to areas north of Fort McMurray, Alberta. Officials planned to evacuate about 6,000 people from areas north of Fort McMurray either by car or air, Premier Rachel Notley said during her latest news conference on Saturday. About 25,000 residents of the nearly 80,000 who left the affected area fled north to seek shelter at oil-sands worker camps and other facilities. Those camps are running out of supplies, and the evacuees are now being directed south, where evacuation centers have been set up in larger cities such as Edmonton, Alberta's capital. More than 500 firefighters, 15 helicopters and 14 air tankers are trying to put out the fires in Fort McMurray, which grew by nearly 50% in the past day to now cover 360,000 acres, or about half the size of the state of Rhode Island, Ms. Notley said. Although winds on Saturday pushed the blaze to the northeast of Fort McMurray--an area officials said doesn't present a major risk to the town--weather conditions are significantly worse and the fire could double in size, approaching the province's border with Saskatchewan. A hamlet near Fort McMurray of about 450 people was put under a voluntary evacuation order on Saturday, Ms. Notley added. "In no way is this fire under control," Ms. Notley said. The fires, which started last week, spread from a forested area southwest of Fort McMurray and on Monday crossed the river, which bisects the town. They began to threaten residential neighborhoods by midday Tuesday, prompting evacuations. Alberta, which declared a state of emergency this week, has implemented a provincewide fire ban to help prevent any new wildfires. The province also banned recreational off-highway vehicles on Friday. Several blazes around Fort McMurray are considered to be out of control, but the town's airport, hospital and water-treatment facility remain intact, Ms. Notley said. The province will spend 100 million Canadian dollars (US$77.3 million) to provide emergency assistance to individuals affected by the fires, she said on Friday. More Coverage * 'Extreme' Fire Guts Canadian Town's Future "It's too early to tell what exactly will happen but we're still in an extreme fire condition," said Chad Morrison, Alberta's manager of wildfire prevention on Saturday. "The good news is that it continues to move away from the community and oil-sands facilities." The forest fires have crimped oil-sands production and threaten to weigh on the country's economic output. Some of Canada's largest deposits are in the ground around Fort McMurray. Many oil companies have evacuated staff and cut production because of pipeline outages and the risk from encroaching blazes. The fire hasn't damaged the operation of any oil-sands producers, said Ralph Goodale, Canada's Public Safety Minister, during a briefing on Saturday. But Syncrude Canada Ltd. said Saturday it is shutting down its Mildred Lake and Aurora facilities north of Fort McMurray as a precaution against the encroaching blaze. "There is no imminent threat from the fire. However, smoke has reached [the] Mildred Lake site," Syncrude said in a statement. The facilities can produce up to 350,000 barrels of oil a day. A Syncrude spokesman declined to specify the amount of production being cut as a result of the shutdown, but the facilities had already been operating at "minimal" levels due to risks posed by the fire. About 1,500 workers were evacuated from the Syncrude facility, Ms. Notley said. Different producers have already shut-in at least 645,000 barrels, or almost one-quarter of Canada's 2.5 million barrels in total oil-sands production, as part of their efforts to ensure worker safety at their operations. Much of that output is sent to refineries in the U.S. Economists at Bank of Nova Scotia have said the forest-fire fallout could mean "very little" gross domestic product growth in Canada in the second quarter. The town of Fort McMurray became the symbol of Canada's oil boom in the last decade, attracting some of the world's biggest energy producers amid a rush to build megaprojects to extract nearby oil sands. Thanks to the influx of investment from producers such as Shell and Exxon Mobil, thousands flocked to "Fort McMoney" as the city spent millions building heated bus shelters, schools, bridges and hockey arenas to accommodate its rapidly growing and affluent population. The evacuation is the largest in Alberta's history, forcing residents in more than 12 northern communities including Fort McMurray to leave their homes, according to the Canadian Red Cross. Ben Dummett, Judy McKinnon and Kim Mackrael contributed to this article. Write to David George-Cosh at david.george-cosh@wsj.com Credit: By David George-Cosh
Subject: Oil sands; Forest & brush fires; Evacuations & rescues
Location: Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 8, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787287250
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787287250?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Falling Dollar a Risky Premise for Rally in Other Assets; Analysts warn that fundamentals for oil, emerging-markets and many stocks can't support recent gains
Author: Iosebashvili, Ira; Dulaney, Chelsey; Whittall, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 May 2016: n/a.
Abstract:
Mr. Upadhyaya, whose firm manages $249 billion, has shut down his bullish positions on the dollar in recent months in favor of emerging-market currencies, including the Indian rupee, Russian ruble and Argentine peso. Federal-funds futures, used by investors and traders to place bets on central-bank policy, showed Friday that the odds for a rate increase at the Fed's June meeting were 13%, while the chances of a rate increase at the December meeting were 61%, according to CME Group.
Full text: The powerful rallies that have lifted stocks, crude oil and emerging markets for the past three months have one important thing in common--the falling dollar--and investors are growing anxious that it could prove to be the weak link. While the dollar is down 4.5% this year and near a one-year low against a basket of currencies, other investments have surged. U.S. crude prices are up 69% from their February lows. Gold was up 16.5% in the first quarter, its best in three decades. And emerging-market stocks, bonds and currencies have enjoyed double-digit gains in 2016. Analysts at Morgan Stanley measured the correlation between a weak dollar and their own index of investor appetite for riskier assets. They found it near its highest level in 20 years. The concern is that it is a relationship that could easily go in the opposite direction. The dollar is heavily dependent on perceptions of what the Federal Reserve will do with interest rates, and those perceptions could change quickly. Meanwhile, analysts warn that the fundamentals for oil, emerging-market assets and even many stocks look too weak to support the recent price gains on their own. "Currency is the most influential factor for markets this year," said Graham Secker, head of European equity strategy at Morgan Stanley. "If the dollar starts moving higher, global risk appetite will fall." On Friday, Labor Department figures showing that U.S. job growth slowed in April kept alive the bet on riskier markets. The data gave the Federal Reserve little reason to raise interest rates soon , economists said. But traders fret that every new economic report could bring the Fed a step closer to raising rates--a move that would be expected to support to the dollar--if data come in stronger than expected. Higher rates make a currency more attractive to yield-seeking investors. "I was like 'phew,' " said Paresh Upadhyaya, director of currency strategy at Pioneer Investments, after the weaker-than-expected jobs numbers were announced on Friday. "I breathed a sigh of relief that this risk rally will continue." Mr. Upadhyaya, whose firm manages $249 billion, has shut down his bullish positions on the dollar in recent months in favor of emerging-market currencies, including the Indian rupee, Russian ruble and Argentine peso. The rally's next test could come soon. This week brings retail-sales figures and speeches from Fed officials. The following week, the government announces industrial-production numbers. When the dollar weakens, dollar-denominated commodities tend to appreciate in value, even though many of those markets are heavily oversupplied. Also, emerging-market currencies strengthen, and the foreign-currency debt of those countries becomes cheaper to pay back. Still, many developing economies are struggling with waning demand from China, a major commodity customer, so stocks and other assets could get caught in any dollar updraft. Morgan Stanley's Global Risk Demand Index, which measures risk appetite by analyzing moves in markets such as stocks, commodities, and emerging markets, is moving nearly in the opposite direction of dollar strength. The correlation reached negative 86% in early April. A large negative correlation means risky assets tend to fall when the dollar gains and rise when the dollar falls. As of May 5, the correlation was minus-76%. The Fed began the year with plans to raise interest rates four times after boosting rates by a quarter of a percentage point in December. But in March, Fed Chairwoman Janet Yellen signaled that the central bank was in no hurry to raise interest rates, citing slower global growth. Federal-funds futures, used by investors and traders to place bets on central-bank policy, showed Friday that the odds for a rate increase at the Fed's June meeting were 13%, while the chances of a rate increase at the December meeting were 61%, according to CME Group. Hedge funds and other speculative investors are now more bearish on the dollar than at any other time since February 2013, data from the CFTC and Scotiabank shows. The negative view on the dollar has grown as the Fed displayed a more cautious view on raising interest rates, while central banks in Europe and Japan appear reluctant to ease their own monetary policies further. That is bad news for the dollar, which has benefited from expectations that the gap between U.S. and foreign interest rates will continue to widen. However, that bearish positioning also means any sign the Fed is turning more hawkish could send investors scampering to buy dollars, pushing the U.S. currency sharply higher. "The market has become complacent," said Steven Englander, head of G-10 FX strategy at Citigroup Inc. "There's the risk...the Fed gives a sudden indication that really surprises the market." Indeed, some analysts warn that investors may be underestimating the chance of an earlier rate increase. A number of Fed officials have suggested that a move toward higher rates isn't off the table in the near term. Dallas Fed President Robert Kaplan said he would support a move in June or July if economic data improve. Fed officials in St. Louis and Atlanta have expressed similar thoughts. A strong dollar doesn't necessarily spell bad news for all markets. Stock markets in Japan and Europe have suffered this year, in part because of their currencies appreciating against the dollar. That weighs on local exporters. "I don't think necessarily a rising dollar is negative for all asset classes," said Peter Fitzgerald, head of multi assets at Aviva Investors. "A rising dollar would see the yen and the euro weakening, which would be supportive for those markets." Write to Ira Iosebashvili at ira.iosebashvili@wsj.com , Chelsey Dulaney at Chelsey.Dulaney@wsj.com and Christopher Whittall at christopher.whittall@wsj.com Credit: By Ira Iosebashvili, Chelsey Dulaney and Christopher Whittall
Subject: American dollar; Interest rates; Emerging markets; Stock exchanges; Currency
Location: United States--US
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787311090
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787311090?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohi bited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi Shift Brings Uncertainty on Oil; Saudi oil minister Ali al-Naimi is dismissed; focus on kingdom's policies mounts
Author: Friedman, Nicole; Said, Summer; Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 May 2016: n/a.
Abstract:
Related * Saudi Arabia Dismisses Its Powerful Oil Minister Ali al-Naimi * Saudi Arabia's King Salman Shakes Up Government Ministries * Rivals, Admirers Lament Saudi Oil Minister's Exit * New Saudi Energy Minister Khalid al-Falih an Insider Signifying Policy Continuity * Departure of Saudi Oil Minister Latest Catalyst for Crude Prices Saudi Arabia had appeared willing to make an output-freeze deal in Doha, Qatar, where the meeting was held, but then changed its stance.
Full text: The dismissal of Saudi Arabia's long-serving and influential oil minister ushered in a new wave of uncertainty for oil prices, which have rallied lately but could change course depending on the kingdom's policies. To some, the removal of Ali al-Naimi after 20 years as oil minister cemented the grip of 31-year-old Deputy Crown Prince Mohammed bin Salman on Saudi Arabia's energy policy. Some officials at the Organization of the Petroleum Exporting Countries said that could mean a deeper politicization of oil-production strategy as the kingdom looks to neutralize its rival Iran, which is trying to come back from years of Western sanctions with a surge of output. U.S. oil prices have surged 70% since hitting a 13-year low in February as traders wagered that the global oversupply of crude is set to shrink. But throughout the climb, Saudi Arabia's next steps have remained a question. Large oil-producing nations, including Saudi Arabia, last month failed to agree on a deal to freeze output, and some analysts say these countries could ramp up production further as they compete for market share. Related * Saudi Arabia Dismisses Its Powerful Oil Minister Ali al-Naimi * Saudi Arabia's King Salman Shakes Up Government Ministries * Rivals, Admirers Lament Saudi Oil Minister's Exit * New Saudi Energy Minister Khalid al-Falih an Insider Signifying Policy Continuity * Departure of Saudi Oil Minister Latest Catalyst for Crude Prices Saudi Arabia had appeared willing to make an output-freeze deal in Doha, Qatar, where the meeting was held, but then changed its stance. Mr. Naimi was inclined to curb production, OPEC officials have said, but others above him overruled him. His departure could mean increased output, some said over the weekend, referring in particular to the emerging role of Prince Mohammed, who has indicated the country could ramp up production. "Mohammed bin Salman has changed everything," said Helima Croft, head of commodities strategy at RBC Capital Markets. "He doesn't feel the economic burden to have to cooperate with OPEC," referring to the Organization of the Petroleum Exporting Countries. Khalid al-Falih, Mr. Naimi's successor, is a long-serving Saudi oil man but he doesn't have the same experience dealing with the fractured politics of OPEC, the 13-nation cartel that controls a third of the world's oil. Ahead of OPEC's next meeting on June 2, Mr. Falih will have to navigate a landscape that includes increased competition from Iran, Saudi Arabia's main rival for power in the Middle East. Freed from Western sanctions, Iran has embarked on a campaign to grab back customers it lost to Saudi Arabia and others, in crude-oil markets and petroleum products like chemicals. "Our main competitor in OPEC is Saudi Arabia," Amir Hossein Zamaninia, Iran's deputy oil minister for international affairs, said in an interview Sunday in Tehran. "In the Southern Persian Gulf, oil is becoming a political commodity, more than an economic commodity," he said, though he lamented that shift. "OPEC is in a difficult situation." In his first remarks as minister, Mr. Falih on Sunday said in a news release that the country would "remain committed to maintaining our role in international energy markets and strengthening our position as the world's most reliable supplier of energy." Another issue for markets is Saudi Arabia's continued quest for market share. Its grip on Chinese, Japanese and Indian markets has slipped recently amid stiffening competition from countries such as Russia and Iran. For example, while China's oil imports grew by 13.4% year over year to 7.3 million barrels a day in the first quarter, its imports from Saudi Arabia grew by just 7.3%, customs data show. The kingdom's share of Chinese imports fell to 15% from 15.9%. Those competitive forces, intensified by the nearly two-year slump in oil prices, underscore the challenges Mr. Falih and Saudi Arabia face. The potential for Saudi Arabia to increase its oil production in the coming months is "definitely a concern" for the oil market, said Michael Cohen, head of energy markets research at Barclays PLC, on Saturday. Others saw the news of Mr. Naimi's departure as positive for prices. "I think this is going to be interpreted as being bullish for the oil prices," said Dominick Chirichella, analyst at the Energy Management Institute. The change in leadership "allows them to backtrack on the market share strategy without really losing a whole lot of face." "The market will take it as a bullish sign but it adds unpredictability as to what the Saudis' course of action will be," said Doug King, chief investment officer at RCMA Asset Management. Mr. King manages that firm's $240 million Merchant Commodity hedge fund. OPEC decided in November 2014 not to cut its production to lead oil prices higher. That decision, led by Saudi Arabia, was a departure from the group's past policies and sent prices to multiyear lows. Analysts said Saudi Arabia was expecting low prices to force high-cost oil production, including from U.S. shale deposits, out of the market. Since then, companies have slashed spending on new drilling. Many investors and analysts expect the global glut of crude to disappear by the end of this year or early next year. Meanwhile, recent reports that Saudi Arabia had sold a spot cargo of oil to Asia spooked traders, as it was a departure from the country's usual strategy of selling oil using long-term contracts. If Saudi Arabia is willing to sell oil on the spot market, that would make it easier for the country to increase its exports quickly, said Citigroup analysts in a note late last month. "It looks increasingly likely that the kingdom is targeting another [500,000 barrels a day] of sales," the bank said. "This battle to secure market share appears to be the main driver of Saudi oil policy right now." The global crude market remains oversupplied by as much as a million barrels a day, analysts say. Stockpiles of crude oil around the world stand near record highs. Analysts have forecast that OPEC production rose in April. Official data is due to be released this week. U.S. oil prices settled Friday at $44.66 a barrel on the New York Mercantile Exchange, while Brent, the global benchmark, closed at $45.37 a barrel on ICE Futures Europe. Mr Falih, who had been tipped by many to eventually succeed Mr Naimi, is a close adviser to the deputy crown prince in helping to redirect the kingdom's economy into a post-oil era. Still, he is unlikely to enjoy the same type of authority to set oil policy as Mr. Naimi did. "The big, and unanticipated shift is that Mohammed bin Salman is setting the policy," said Jamie Webster, an independent energy analyst. "However, the policy set by Naimi, to not cut in the face of structural oversupply, will likely remain." Dan Strumpf and Jenny Hsu contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com , Summer Said at summer.said@wsj.com and Benoit Faucon at benoit.faucon@wsj.com Corrections & Amplifications: Jamie Webster is an independent energy analyst. An earlier version of this article incorrectly stated he worked at IHS. (May 9, 2016) Credit: By Nicole Friedman, Summer Said and Benoit Faucon
Subject: Supply & demand; Market shares; Crude oil prices; Petroleum production; Energy industry
Location: United States--US Iran
People: Mohamed bin Salman, Prince of Saudi Arabia Naimi, Ali I
Company / organization: Name: RBC Capital Markets; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787314295
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787314295?accountid=7117
Copyright: (c) 2016 Dow Jo nes & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil's Blazing Canadian Wake-up Call; Wildfires near Fort McMurray have temporarily brought global oil market back into balance and should serve as a sign the glut isn't permanent
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 May 2016: n/a.
Abstract:
[...]two of the top three are in the western hemisphere and one has seen a large chunk of production shut down this week.
Full text: Ask someone to name the countries with the largest crude-oil reserves and he would point to the Middle East or former Soviet Union. Actually, two of the top three are in the western hemisphere and one has seen a large chunk of production shut down this week. True, Canada isn't quite on par with Saudi Arabia when it comes to actual production, but it is no slouch. Now wildfires ravaging Fort McMurray have shut down about a quarter of the region's oil-sands production. That might seem insignificant with the world awash in oil and Canada's oil sands being the least profitable barrels to produce or invest in new capacity world-wide. New capacity is costly and a regional crude variety is priced at a roughly $12 a barrel discount to global benchmarks based on quality and logistical factors. But cash costs are what matter. Traders expect Canada's existing supply to remain on the market for the foreseeable future since fixed investments can't be undone. Plus, temporarily shutting down bitumen production is costly. The upshot is that the fires temporarily have erased global oversupply. While outages should be short enough to make only a small dent in global inventory, this is a wake-up call for the market. Supply is edging down rapidly enough that flare-ups in trouble spots--Nigeria, Libya and Venezuela are all at risk--could put the market into deficit for the first time in years. Even if that doesn't cause oil to resume its climb, and it could, it should at least underpin its recent gains. Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Subject: Oil sands
Location: Canada Union of Soviet Socialist Republics--USSR Middle East Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 8, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787323003
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787323003?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi Arabia Forges Ahead With Change; A sweeping reorganization at important institutions comes after a plan to wean itself off oil revenues
Author: Bill Spindle; Margherita Stancati; Ahmed Al Omran; Spindle, Bill; Stancati, Margherita; Ahmed Al Omran
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 May 2016: n/a.
Abstract:
Related Coverage * Saudi Shift Brings Uncertainty in Oil * Saudi Arabia Eyes IPOs to Raise Capital The changes announced Saturday included replacing the oil minister, Ali al-Naimi, 80, with a younger technocrat, Khaled al-Falih, whose responsibilities will be expanded to include the rapidly growing power sector and other natural resources.
Full text: RIYADH--Saudi Arabia forged ahead with far-reaching government changes this weekend, adding to a barrage of recent proposals aimed at overhauling the economy and convincing legions of young people that change is coming to the conservative kingdom. The monarchy announced a sweeping reorganization Saturday that included new leadership at some of Saudi Arabia's most important institutions , including the powerful oil ministry and the central bank. The changes come less than two weeks after Saudi Arabia said it would wean itself off oil , which still provides the vast majority of government revenue even though prices have fallen in recent years. Even if oil prices rise to prior levels, the kingdom will struggle to continue lavishing its population with generous benefits. Yet reducing welfare benefits carries the risk of political instability. More than half of the Saudi population is under 25, according to government data, and the memory of the Arab Spring, which unseated several of the region's autocrats, is fresh. In addition, extremist groups such as Islamic State and al Qaeda have established a presence in the kingdom. Against that backdrop, King Salman bin Abdulaziz al Saud, who assumed the throne last year, and his 30-year-old son, Deputy Crown Prince Mohammed bin Salman, are moving quickly to try to make the government more efficient and create new job opportunities in the private sector. "I've never seen this kind of dynamism, such quick change in the country. And it's because time is running out," says John Sfakianakis, a former economic adviser to the Saudis and the Riyadh-based director of research for the Gulf Research Center. "If the country doesn't think of its future today, 10 years from now, when you have these demographics pressuring the country...where are these people going to find jobs?" Related Coverage * Saudi Shift Brings Uncertainty in Oil * Saudi Arabia Eyes IPOs to Raise Capital The changes announced Saturday included replacing the oil minister, Ali al-Naimi, 80, with a younger technocrat, Khaled al-Falih, whose responsibilities will be expanded to include the rapidly growing power sector and other natural resources. Mr. Falih, 55, previously served as the health minister and is chairman of the national oil company, Saudi Arabian Oil Co., better known as Aramco. A half-dozen other ministries and commissions were reformulated, eliminated or saw new heads appointed in an effort to improve government responsiveness and efficiency. The changes also included the establishment of new commissions for culture and entertainment, moves which could appeal to younger Saudis. The announcement follows a recent string of new initiatives and bold pronouncements aimed at liberalizing the economy and creating jobs for the kingdom's youth. So far, the campaign is more about proposals and plans than action--especially the sort of social and political changes that have proven difficult to implement in the past--but some veteran observers of the kingdom say they're convinced the leadership is more serious than it has been in the past about real change. Prince Mohammed, who is second in the line of royal succession, has been given a mandate to overhaul nearly every aspect of the kingdom's petroleum-dependent economy. The prince and his father unveiled a plan last month to rebuild the kingdom's economic foundations and diversify the economy away from oil, which the government says accounted for over 70% of revenues last year. A more detailed package of proposals on how to achieve those goals, known as the National Transformation Plan, is expected to be released in coming weeks. During last month's presentation, Prince Mohammed said he thinks Saudi Arabia will be able to live without oil by as early as 2020--a startling assertion that many economists view with skepticism. Economic plans aren't new in the kingdom. The government began implementing five-year plans in the 1970s, but they often ran aground when oil prices rose and public resistance mounted. "It has been tried repeatedly in the past, sometimes with a greater degree of success than others. This latest plan has more teeth," said an American businessman long based in Saudi Arabia. "It sounds sexy to say: we want to wean off oil. But wean to what? You still have to work with what you've got, and what they've got here is oil. Oil and sunshine." The rapid pace at which the monarchy is moving to reorganize its bureaucracy has raised some hope that this time around it will be able to deliver on at least some of its promises. Much of it has to do with Prince Mohammed, whose leadership style has shaken up the royal court. The young prince speaks the language of the foreign consultants he brought in to help draft the plan for the kingdom's economic transformation. But his assertiveness has drawn attention, and the prince may need to demonstrate he can deliver change to broaden consensus. The catalyst for the latest round of proposals has been the fiscal shock from a drop in oil revenues in the past two years. Saudi Arabia's foreign-exchange reserves declined to $587 billion at the end of March, down more than 21% from a peak of $746 billion in August 2014, according to the latest central-bank data. But the plan aims to address deeper challenges. The government directly channels wealth to its citizens through a bloated bureaucracy, providing guaranteed government jobs and cradle-to-grave subsidies for everything from education to energy. But the system is stretched to its limits, according to studies the government has commissioned. Generous subsidies on domestic fuel, power and water were reduced in December, and more cost-cutting is likely to follow. Among other recent changes are plans to make it easier for foreigners to invest in the kingdom. Plans for a value-added tax, unprecedented in the kingdom's modern history, were set in motion for implementation in two years. Saudi business leaders and regular citizens have generally viewed the initiative with guarded optimism. Many are excited by the sudden burst of energy from a government that has more often been sclerotic in recent years. Rami Taibah, a 34-year-old web developer from Jeddah, said Saturday's cabinet reshuffle was necessary if the government is serious about pushing major changes. "I'm not worried about the pace of change." he said. "Everything used to be slow. It's good to see things move quickly for a change." Other Saudis worry that the latest wave of proposals would add more pressure on the population as the government moves to cut spending and reduce subsidies. "Cutting subsidies is needed because we have waste, but this is not enough," said Mostafa Hussain, a counselor in a high school in Eastern Province. "Citizens alone should not pay the cost of economic reform." But few dismiss the difficulty of navigating around the country's powerful and deeply conservative clergy--which has in the past opposed modernizing proposals like those in the current plan--as well as vested bureaucratic, business and political interests that will have to be curbed to accomplish its goals. Security also remains a serious challenge as the kingdom aims to maintain stability in a volatile region. Saudi Arabia has been the target of dozens of attacks by Islamic State militants over the last two years. Saudi security forces have become more capable and prepared to deal with terror threats in recent years, but Islamic State operatives have proved dangerous despite recent raids and arrests by authorities. The Ministry of Interior said Sunday that it had foiled a terrorist attack by two militants on a police center in the western city of Taif. One officer was killed in the attack. Credit: By Bill Spindle, Margherita Stancati and Ahmed Al Omran
Subject: Foreign investment
Location: Saudi Arabia
People: Naimi, Ali I Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 8, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787334883
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787334883?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited w ithout permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
OPEC Set to Hold Fast on Policy Following Saudi Oil Minister's Exit; Appointment of Khalid al-Falih makes change of oil policy less likely, say OPEC officials
Author: Said, Summer; Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 May 2016: n/a.
Abstract:
Related Coverage * Oil Prices Jump on Strong China Crude Imports * Saudi Arabia Sliding as King of Asia's Oil Suppliers * Departure of Naimi Could Be Oil Catalyst * New Energy Minister Signifies Continuity * Saudi Arabia Dismisses Its Powerful Oil Minister Ali al-Naimi * Departure Is Latest Catalyst for Crude * Monarchy Intervenes on Output Policy (April 19) Mr. Falih will have to navigate a landscape of increased competition from Iran, Saudi Arabia's main rival for power and influence in the Middle East.
Full text: The dismissal of Ali al-Naimi as Saudi Arabia's oil minister puts the country's deputy crown prince firmly in control of energy policy and makes an agreement to freeze oil production less likely when the Organization of the Petroleum Exporting Countries meets next month, OPEC officials said. Prince Mohammed bin Salman, second in line to the throne, has taken a hard line on Saudi oil policy , doubling down on the kingdom's strategy of maintaining high crude output in the face of collapsed prices. OPEC officials said the appointment of a new minister , Khalid al-Falih, makes it unlikely that Saudi Arabia will advocate changing policy with the 13-nation cartel that controls a third of the world's oil production. It could still be a long and fractious meeting when OPEC convenes on June 2. Some members want to pull back or freeze the cartel's output, while Saudi rival Iran is intent on throttling its own production up now that Western sanctions on its nuclear program have ended . "Naimi knows OPEC" and OPEC knows him and any change will present another problem for OPEC ministers," said John Hall, chairman of Alfa Energy and a longtime OPEC watcher. "To understand the new direction that will undoubtedly arise from the new leadership of the Saudi ministry will take time." Mr. Falih is an experienced oil executive, having led state oil company Saudi Arabian Oil Co., or Aramco, for years, but he hasn't attended an OPEC meeting and doesn't have the long-term relationships with other countries that Mr. Naimi did. Related Coverage * Oil Prices Jump on Strong China Crude Imports * Saudi Arabia Sliding as King of Asia's Oil Suppliers * Departure of Naimi Could Be Oil Catalyst * New Energy Minister Signifies Continuity * Saudi Arabia Dismisses Its Powerful Oil Minister Ali al-Naimi * Departure Is Latest Catalyst for Crude * Monarchy Intervenes on Output Policy (April 19) Mr. Falih will have to navigate a landscape of increased competition from Iran, Saudi Arabia's main rival for power and influence in the Middle East. Freed from Western sanctions, Iran has embarked on a campaign to grab back customers it lost to Saudi Arabia and others, in crude-oil markets and petroleum products like chemicals, Tehran officials have said. "What we know is that Saudi will not cut production unilaterally to support price. We also know that they will satisfy all customer requests. This has been a pillar of Saudi policy for a long time," said Yasser Elguindi, an analyst at economic consultancy Medley Global Advisors. In his first remarks as minister, Mr. Falih said in a news release Sunday that the country would "remain committed to maintaining our role in international energy markets and strengthening our position as the world's most reliable supplier of energy." Iran's oil minister, Bijan Zanganeh, could see his profile grow in the absence of Mr. Naimi, OPEC officials said. Mr. Zanganeh was handpicked by Iranian President Hassan Rouhani to reform the country's oil industry, and the two men are seen to be close--much like Mr. Naimi's tight relationship with previous Saudi kings. Mr. Falih, who had been tipped by many to eventually replace Mr. Naimi, is a close adviser to the deputy crown prince on reducing the kingdom's dependence on crude, but is unlikely to have as much authority to set oil policy as Mr. Naimi. "The big, and unanticipated shift is that Mohammed bin Salman is setting the policy. However, the policy set by Naimi, to not cut in the face of structural oversupply, will likely remain," said Jamie Webster, an independent energy analyst. Mr. Falih moves into his new job as Riyadh and Tehran are at odds diplomatically, backing opposing sides in the violent conflicts in Yemen and Syria, and representing different strains of Islam--Sunnism in Saudi Arabia and Shiism in Iran. Riyadh cut off ties with Tehran this year after some of its diplomatic buildings in Iran were ransacked by protesters following the execution of a popular Shiite cleric in Saudi Arabia. "Our main competitor is Saudi Arabia," Amir Hossein Zamaninia, Iran's deputy oil minister for international affairs, said in an interview with The Wall Street Journal in Tehran on Sunday. The dynamic between Saudi Arabia and Iran "has always been political. It will remain political," another Iranian oil official said. In a taste of Iran's mood ahead of the next OPEC meeting, the oil ministry's magazine, Iran Petroleum, said in its latest edition that "Saudi Arabia destroys" $100 oil. "Saudi Arabia will be the main loser in the price war" with Iran and other producers, Akbar Nematollahi, the head of the ministry's public relations, wrote in the magazine. Mr. Naimi had proved adept at managing the relationship with Iran and appeared open to compromise recently on production, signaling that the Saudi kingdom would cap its output at a certain level along with other big producers including non-OPEC members such as Russia. As oil ministers gathered in Doha to seal the agreement last month, it appeared that Saudi officials would make the deal, even though Iran wouldn't follow suit--before they were reversed by the prince at the last minute, according to people familiar with the matter. The Doha meeting was another sign of the fissures in the OPEC coalition since oil prices began crashing almost two years ago, a swift decline led by surging American production that sent global supplies above demand by one million barrels or more on any given day. OPEC members such as Venezuela and Nigeria have called for the cartel to return to its ways of pulling back production to bring supply and demand back into balance. Saudi officials and their Persian Gulf Arab allies Kuwait, Qatar and the United Arab Emirates believe output cuts will only help producers such as the U.S., where higher prices are needed to maintain production. "OPEC's unity is now in the spotlight more than ever," said an OPEC official. "Would we ever see a minister that carries the same weight as Naimi? I don't think so, especially as it is clear now that decisions are in the hands of the deputy crown prince." Tehran has indicated that it would be open to cooperating with Saudi Arabia and others on curbing production when Iran reaches its pre-sanctions level of oil production. "The question is how much Saudi oil policy is driven by Mohammed bin Salman, or how much the broad direction is in harmony with his goals while Falih translates that into policy," said Robin Mills, a Dubai-based analyst who heads Qamar Energy, a consulting firm. "If there is a chance of a renewed 'freeze' deal, I think they and most other members will be delighted to take it. The main issue is, given some encouraging noises from Iran, whether the deputy crown prince and Falih will be open to a freeze deal involving Iran later in the year," he said. Iran has previously said it would join a production freeze once it returned to its pre-sanctions oil output level--around 4 million barrels a day. Yet in the interview, Mr. Zamaninia said increased politicization in OPEC--which he said Iran disapproved of--would make any agreement unlikely for now. The official said geopolitical issues such as the conflicts in Syria and Yemen will have to be resolved first. "In the Southern Persian Gulf, oil is becoming a political commodity, more than an economic commodity," he said. "OPEC is in a difficult situation." Write to Summer Said at summer.said@wsj.com and Benoit Faucon at benoit.faucon@wsj.com Corrections & Amplifications: Jamie Webster is an independent energy analyst. An earlier version of this article incorrectly stated he worked at IHS. (May 9, 2016) Credit: Summer Said, Benoit Faucon
Subject: International markets; Petroleum production; Energy industry
Location: Iran
People: Naimi, Ali I
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787464995
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787464995?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi Arabia Moves Quickly on Government Shake-Up; Sweeping reorganization at important institutions comes after a plan to wean the kingdom off oil revenue
Author: Bill Spindle; Margherita Stancati; Ahmed Al Omran; Spindle, Bill; Stancati, Margherita; Ahmed Al Omran
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2016: n/a.
Abstract:
A Time of Change * January 2015 King Salman ascends the throne after the death of King Abdullah, and orders a cabinet shuffle in a bid to make the government more efficient. * April 2015 King Salman changes the line of succession, naming his nephew, Mohammed bin Nayef, the crown prince and his son, Mohammed bin Salman, as deputy crown prince. * June 2015 Saudi Arabia opens its stock market to direct foreign investment. * December 2015 Saudi women vote and run in nationwide municipal elections for the first time. * January 2016 Deputy Crown Prince Mohammed bin Salman announces a plan to publicly list up to 5% of its state-owned oil company Aramco on stock exchanges in Riyadh and possibly the U.S. * April 2016 Deputy Crown Prince Mohammed bin Salman unveils Vision 2030, an ambitious slate of economic reforms aimed at freeing the country from its dependence on oil revenues.\n
Full text: RIYADH--Saudi Arabia forged ahead a far-reaching government shake-up this weekend, adding to a barrage of proposals aimed at overhauling the economy and convincing legions of young people that change is coming to the conservative kingdom. The monarchy announced a sweeping reorganization Saturday that included new leadership at some of Saudi Arabia's most important institutions , including the powerful oil ministry and the central bank. The changes come less than two weeks after Saudi Arabia said it would wean itself off oil , which still provides the vast majority of government revenue even though prices have fallen in recent years. Even if oil prices rise to prior levels, the kingdom will struggle to continue lavishing its population with generous benefits. Yet reducing welfare benefits carries the risk of political instability. More than half of the Saudi population is under 25, according to government data, and the memory of the Arab Spring, which unseated several of the region's autocrats, is fresh. In addition, extremist groups such as Islamic State and al Qaeda have established a presence in the kingdom. Against that backdrop, King Salman bin Abdulaziz al Saud, who assumed the throne last year, and his 30-year-old son, Deputy Crown Prince Mohammed bin Salman, are moving quickly to try to make the government more efficient and create new job opportunities in the private sector. "I've never seen this kind of dynamism, such quick change in the country. And it's because time is running out," said John Sfakianakis, a former economic adviser to the Saudis and the Riyadh-based director of research for the Gulf Research Center. "If the country doesn't think of its future today, 10 years from now, when you have these demographics pressuring the country...where are these people going to find jobs?" he said. Related Coverage * Saudi Shift Brings Uncertainty on Oil * Saudi Arabia Eyes IPOs to Raise Capital The changes announced Saturday included replacing the oil minister, Ali al-Naimi, 80, with a younger technocrat, Khaled al-Falih, whose responsibilities will be expanded to include the rapidly growing power sector and other natural resources. Mr. Falih, 55, previously served as the health minister and is chairman of the national oil company, Saudi Arabian Oil Co., better known as Aramco. A half-dozen other ministries and commissions were reformulated, eliminated or saw new heads appointed in an effort to improve government responsiveness and efficiency. The changes also included the establishment of new commissions for culture and entertainment, moves which could appeal to younger Saudis. The announcement followed a string of initiatives and bold pronouncements aimed at liberalizing the economy and creating jobs for the kingdom's youth. So far, the campaign is more about proposals and plans than action--especially the sort of social and political changes that have proved difficult to implement in the past--but some veteran observers of the kingdom say they're convinced the leadership is more serious than it has been in the past about real change. Prince Mohammed, who is second in the line of royal succession, has been given a mandate to overhaul nearly every aspect of the kingdom's petroleum-dependent economy. The prince and his father unveiled a plan last month to rebuild the kingdom's economic foundations and diversify the economy away from oil, which the government says accounted for over 70% of revenues last year. A more detailed package of proposals on how to achieve those goals, known as the National Transformation Plan, is expected to be released in coming weeks. During last month's presentation, Prince Mohammed said he thinks Saudi Arabia will be able to live without oil by as early as 2020--a startling assertion given the fundamental changes that would demand. Economic plans aren't new in the kingdom. The government began implementing five-year plans in the 1970s, but they often ran aground when oil prices rose and public resistance mounted. A Time of Change * January 2015 King Salman ascends the throne after the death of King Abdullah, and orders a cabinet shuffle in a bid to make the government more efficient. * April 2015 King Salman changes the line of succession, naming his nephew, Mohammed bin Nayef, the crown prince and his son, Mohammed bin Salman, as deputy crown prince. * June 2015 Saudi Arabia opens its stock market to direct foreign investment. * December 2015 Saudi women vote and run in nationwide municipal elections for the first time. * January 2016 Deputy Crown Prince Mohammed bin Salman announces a plan to publicly list up to 5% of its state-owned oil company Aramco on stock exchanges in Riyadh and possibly the U.S. * April 2016 Deputy Crown Prince Mohammed bin Salman unveils Vision 2030, an ambitious slate of economic reforms aimed at freeing the country from its dependence on oil revenues. * May 2016 King Salman announces a government shake-up, replacing veteran oil minister Ali al-Naimi, central bank governor Fahad al-Mubarak and other senior officials. "It has been tried repeatedly in the past, sometimes with a greater degree of success than others. This latest plan has more teeth," said an American businessman long based in Saudi Arabia. "It sounds sexy to say: we want to wean off oil. But wean to what? You still have to work with what you've got, and what they've got here is oil. Oil and sunshine." The rapid pace at which the monarchy is moving to reorganize its bureaucracy has raised some hope that this time around it will be able to deliver on at least some of its promises. Much of it has to do with Prince Mohammed, whose leadership style has shaken up the royal court. The young prince speaks the language of the foreign consultants he brought in to help draft the plan for the kingdom's economic transformation. But his assertiveness has drawn attention, and the prince may need to demonstrate he can deliver change to broaden consensus. The catalyst for the latest round of proposals has been the fiscal shock from a drop in oil revenues in the past two years. Saudi Arabia's foreign-exchange reserves declined to $587 billion at the end of March, down more than 21% from a peak of $746 billion in August 2014, according to the latest central-bank data. But the plan aims to address deeper challenges. The government directly channels wealth to its citizens through a bloated bureaucracy, providing guaranteed government jobs and cradle-to-grave subsidies for everything from education to energy. But the system is stretched to its limits, according to studies the government has commissioned. Generous subsidies on domestic fuel, power and water were reduced in December, and more cost-cutting is likely to follow. Among other recent changes are plans to make it easier for foreigners to invest in the kingdom. Plans for a value-added tax, unprecedented in the kingdom's modern history, were set in motion for implementation in two years. Saudi business leaders and regular citizens have generally viewed the initiative with guarded optimism. Many are excited by the sudden burst of energy from a government that has more often been sclerotic in recent years. Rami Taibah, a 34-year-old web developer from Jeddah, said Saturday's cabinet reshuffle was necessary if the government is serious about pushing major changes. "I'm not worried about the pace of change." he said. "Everything used to be slow. It's good to see things move quickly for a change." Other Saudis worry that the latest wave of proposals would add more pressure on the population as the government moves to cut spending and reduce subsidies. "Cutting subsidies is needed because we have waste, but this is not enough," said Mostafa Hussain, a counselor in a high school in Eastern Province. "Citizens alone should not pay the cost of economic reform." But few dismiss the difficulty of navigating around the country's powerful and deeply conservative clergy--which has in the past opposed modernizing proposals like those in the current plan--as well as vested bureaucratic, business and political interests that will have to be curbed to accomplish its goals. Security also remains a serious challenge as the kingdom aims to maintain stability in a volatile region. Saudi Arabia has been the target of dozens of attacks by Islamic State militants over the last two years. Saudi security forces have become more capable and prepared to deal with terror threats in recent years, but Islamic State operatives have proved dangerous despite recent raids and arrests by authorities. The Ministry of Interior said Sunday that it had foiled a terrorist attack by two militants on a police center in the western city of Taif. One officer was killed in the attack. Credit: By Bill Spindle, Margherita Stancati and Ahmed Al Omran
Subject: Presidents
People: Mohamed bin Salman, Prince of Saudi Arabia Naimi, Ali I
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 9, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787341280
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787341280?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Market Erases Gains as Fears of Fire Threat Fade; Saudi Arabian shake-up causes uncertainty in market
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2016: n/a.
Abstract:
More * Speculative Investors Cut Bullish Oil Bets * Saudi Shift Brings Uncertainty on Oil * Saudi Arabia Slides as King of Asia's Oil Suppliers * Heard on the Street: Oil's Blazing Canadian Wake-Up Call * Shell Evacuates Non-Essential Staff From Nigeria Field The lack of damage "could allow for a fast ramp-up in production, once the fire is under control," Goldman Sachs Group Inc. said in a research note.
Full text: U.S. and global oil benchmarks fell Monday as reports said Canada's wildfires that have curtailed oil output there have slowed and moved away from key production facilities. After jumping more than 2% as the markets opened with Asian trading Sunday night, both major contracts fell as reports emerged that the threat from the fires was diminishing, at least for the moment. The market's losses deepened midmorning Monday as private energy data forecaster Genscape Inc. said inventories at the key U.S. delivery hub in Cushing, Okla., rose 1.4 million barrels last week, according to reports. If the figures prove accurate when official U.S. Energy Department data are released Wednesday, it would add yet more oil to a U.S. system already brimming with near-record levels of stored supplies. "Both factors knocked the market lower," said Gene McGillian, senior analyst with brokerage Tradition Energy. "Some of the fears we had seem to have dried up all of a sudden. Both seemed to point to a weak fundamental picture." The U.S. benchmark ended down 2.7% at $43.44 a barrel on the New York Mercantile Exchange, and the global Brent contract lost 3.8% to finish at $43.63 a barrel on the ICE Futures Europe exchange. After rallying more than 70% in the previous three months from multiyear lows, both contracts have begun to pull back from 2016 highs amid concerns that the price rally has run ahead of major improvements in underlying supply-and-demand conditions. News over the weekend indicated the fires were growing worse, shutting down as much as 1 million barrels a day of Canadian oil-sands production. That figure represents about a third of the country's production, which is the top foreign source of oil for the U.S. That, combined with Saudi Arabia's firing on Saturday of its longtime oil minister, Ali al-Naimi, had markets poised for a rally Monday. But the Canada fires, which traders said posed a more immediate concern to supply, began to fade as a concern early Monday. Reports of damage to production facilities have been limited, and the shutdown so far has been a precautionary measure to evacuate workers. Light rains and cooler temperatures in the Alberta region were said to help slow the fire's advance, and it was also beginning to move away from key parts of the region. A key emerging question has been how quickly companies in Canada could restore production once the fires are under control, but many analysts said it was too soon to know. One factor would be how quickly housing facilities for oil workers could be provided. More * Speculative Investors Cut Bullish Oil Bets * Saudi Shift Brings Uncertainty on Oil * Saudi Arabia Slides as King of Asia's Oil Suppliers * Heard on the Street: Oil's Blazing Canadian Wake-Up Call * Shell Evacuates Non-Essential Staff From Nigeria Field The lack of damage "could allow for a fast ramp-up in production, once the fire is under control," Goldman Sachs Group Inc. said in a research note. Still, the firm noted the situation remains uncertain. And while the total amount of supply lost to the U.S. could reach 14 million barrels, Goldman said--less than a days' worth of domestic consumption--the U.S. still has more than 543 million barrels of oil in storage, according to Energy Department data. In refined product markets, gasoline futures fell 3.6% to $1.4427 a gallon, and diesel futures dropped 3.8% to $1.2863 a gallon. Write to Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Christian Berthelsen
Subject: Forest & brush fires; Futures
Location: United States--US Canada
People: Naimi, Ali I
Company / organization: Name: Genscape Inc; NAICS: 511140, 518210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787404505
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787404505?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Saudi Arabia Slides as King of Asia's Oil Suppliers; Iran and Russia gain on kingdom with customers in Asia
Author: Strumpf, Dan; Hsu, Jenny W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2016: n/a.
Abstract:
A recent rise in oil prices has brought some relief for Saudi Arabia and the Organization of the Petroleum Exporting Countries, whose policy is driven by the kingdom. Related * Saudi Arabia Dismisses Its Powerful Oil Minister Ali al-Naimi * Saudi Arabia's King Salman Shakes Up Government Ministries * Rivals, Admirers Lament Saudi Oil Minister's Exit * New Saudi Energy Minister Khalid al-Falih an Insider Signifying Policy Continuity * Departure of Saudi Oil Minister Latest Catalyst for Crude Prices Besides competing fiercely on price, Russian suppliers are trying to make it more attractive to deal with them.
Full text: HONG KONG--Saudi Arabia's crown as top crude supplier to Asia--home to some the world's biggest and fastest-growing oil consumers--is slipping. As Saudi Arabia's long-serving oil minister Ali al-Naimi leaves his job , stiffening competition from countries such as Russia and Iran is threatening Saudi Arabia's longtime hold over markets including China, Japan and India. Those competitive forces, intensified by the nearly two-year slump in oil prices, underscore the challenges Mr. Naimi has faced recently. Mr. Naimi was dismissed on Saturday and succeeded by Khalid al-Falih, chairman of state oil company Saudi Aramco. A recent rise in oil prices has brought some relief for Saudi Arabia and the Organization of the Petroleum Exporting Countries, whose policy is driven by the kingdom. U.S. crude prices are up more than 70% from a 12-year low of near $26 a barrel in February. Oil futures ended Friday at $44.66 a barrel. The global benchmark, Brent crude, closed at $45.37 a barrel. The recovery has endured even though OPEC and other producers failed to reach an agreement to freeze production at a meeting last month. Analysts say Mr. Falih is likely to maintain a policy of safeguarding Saudi Arabia's market share, even if it means contributing to the continuing supply glut. Saudi Arabia has faced pressure from smaller OPEC members to cut its production since oil prices started tumbling in mid-2014. Mr. Falih "has made his opposition to unilateral cuts or freezing of production very clear," analysts at the research firm Energy Aspects wrote in a report issued on Saturday. The policy has had mixed success in Asia. Asian refiners still obtain the bulk of their oil from Middle Eastern producers, often on existing long-term contracts. China, the region's biggest oil importer, got more of its crude from Saudi Arabia in the first quarter than anywhere else. But while China's oil imports grew 13.4% year over year to 7.3 million barrels a day in the first quarter of 2016, its imports from Saudi Arabia grew just 7.3%, customs data show. The kingdom's share of Chinese imports fell to 15% from 15.9%. Meanwhile, Chinese oil imports from Russia surged 42% in the first quarter of 2016, accounting for 13% of the total in the quarter, up from 10.6% a year earlier. Russia's geographical proximity gives it a competitive advantage over other producers, said Peter Lee, an energy analyst at BMI Research. Demand for Russian oil has been growing from independent Chinese refiners--known as 'teapots'--which have been given more leeway by Beijing to import crude in the past year. Related * Saudi Arabia Dismisses Its Powerful Oil Minister Ali al-Naimi * Saudi Arabia's King Salman Shakes Up Government Ministries * Rivals, Admirers Lament Saudi Oil Minister's Exit * New Saudi Energy Minister Khalid al-Falih an Insider Signifying Policy Continuity * Departure of Saudi Oil Minister Latest Catalyst for Crude Prices Besides competing fiercely on price, Russian suppliers are trying to make it more attractive to deal with them. State-owned Gazprom Neft this year allowed Chinese customers to pay for their oil using the yuan rather than the dollar, the normal currency for oil deals. The Saudis are also losing traction in Japan, where they supplied 33.7% of oil imports in March this year, down from 37.6% a year earlier. Russia's share grew by 1 percentage point to 7.6%, according to government data. Competition between Russia and Saudi Arabia is also heating up in India, where analysts expect crude demand to grow strongly. The kingdom supplies about a fifth of India's imports, according to data from consultancy FGE. This year, Russian state-controlled oil giant OAO Rosneft plans to start sending regular deliveries of crude to India's second-largest oil refinery. That follows Rosneft's decision to buy a big stake in India's Essar Oil Ltd., which owns the refinery and a network of about 2,000 gas stations. The purchase is set to be completed this year. Iran has emerged as another key rival to the Saudis in recent months. The country, which was released this year from international sanctions, has begun increasing oil exports again . Analysts believe Asia will be a major battleground where Iran may take on the Saudis and other big suppliers. Iran has already been making headway in some Asian markets. In South Korea, Iran's share of the oil imported more than doubled to 8.6% year-to-date, compared with all of 2015, while Saudi Arabia's market share declined. Iran has also increased its market share in India. "Iran is definitely a threat to Saudi Arabia, in particular in the Asian market, said Gao Jian, a Shandong-based oil analyst with SCI International. "This means it is even less likely Saudi Arabia will slow down the pace of production, let alone curbing it." Write to Dan Strumpf at daniel.strumpf@wsj.com and Jenny W. Hsu at jenny.hsu@wsj.com Credit: By Dan Strumpf and Jenny W. Hsu
Subject: Crude oil prices; Supply & demand; Cartels; Competitive advantage; Competition
Location: Iran Russia China Asia India Japan Saudi Arabia
People: Naimi, Ali I
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787406487
Document URL: https://login.ezproxy.uta.edu/login?url=https: //search.proquest.com/docview/1787406487?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Finance: Saudi Shift Raises Doubt on Oil Prices --- As long-time official departs, focus on the oil-rich kingdom's policies has increased
Author: Friedman, Nicole; Said, Summer; Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 May 2016: C.3.
Abstract:
In his first remarks as minister, Mr. Falih on Sunday said in a news release that the country would "remain committed to maintaining our role in international energy markets and strengthening our position as the world's most reliable supplier of energy."
Full text: The dismissal of Saudi Arabia's long-serving and influential oil minister ushered in a new wave of uncertainty for oil prices, which have rallied lately. To some, the removal of Ali al-Naimi after 20 years as oil minister cemented the grip of 31-year-old Deputy Crown Prince Mohammed bin Salman on Saudi Arabia's energy policy. Some officials at the Organization of the Petroleum Exporting Countries said that could mean a deeper politicization of oil-production strategy as the kingdom looks to neutralize its rival Iran, which is trying to come back from years of Western sanctions with a surge of output. U.S. oil prices have surged 70% since hitting a 13-year low in February as traders wagered that the global oversupply of crude is set to shrink. But throughout the climb, Saudi Arabia's next steps have remained a question. During Asian trading hours early Monday, crude-oil futures were up 2.4% to $45.69 a barrel. Large oil-producing nations, including Saudi Arabia, last month failed to agree on a deal to freeze output, and some analysts say these countries could ramp up production further as they compete for market share. Saudi Arabia had appeared willing to make an output-freeze deal in Doha, Qatar, where the meeting was held, but then changed its stance. Mr. Naimi was inclined to curb production, OPEC officials have said, but others above him overruled him. His departure could mean increased output, some said over the weekend, referring in particular to the emerging role of Prince Mohammed, who has indicated the country could ramp up production. "Mohammed bin Salman has changed everything," said Helima Croft, head of commodities strategy at RBC Capital Markets. "He doesn't feel the economic burden to have to cooperate with OPEC," referring to the Organization of the Petroleum Exporting Countries. Khalid al-Falih, Mr. Naimi's successor, is a long-serving Saudi oil man but he doesn't have the same experience dealing with the fractured politics of OPEC, the 13-nation cartel that controls a third of the world's oil. Ahead of OPEC's next meeting on June 2, Mr. Falih will have to navigate a landscape that includes increased competition from Iran, Saudi Arabia's main rival for power in the Middle East. Freed from Western sanctions, Iran has embarked on a campaign to grab back customers it lost to Saudi Arabia and others, in crude-oil markets and petroleum products like chemicals. "Our main competitor in OPEC is Saudi Arabia," Amir Hossein Zamaninia, Iran's deputy oil minister for international affairs, said in an interview Sunday in Tehran. "In the Southern Persian Gulf, oil is becoming a political commodity, more than an economic commodity," he said, though he lamented that shift. "OPEC is in a difficult situation." In his first remarks as minister, Mr. Falih on Sunday said in a news release that the country would "remain committed to maintaining our role in international energy markets and strengthening our position as the world's most reliable supplier of energy." Another issue for markets is Saudi Arabia's continued quest for market share. Its grip on Chinese, Japanese and Indian markets has slipped recently amid stiffening competition from countries such as Russia and Iran. For example, while China's oil imports grew by 13.4% year over year to 7.3 million barrels a day in the first quarter, its imports from Saudi Arabia grew by just 7.3%, customs data show. The kingdom's share of Chinese imports fell to 15% from 15.9%. Credit: By Nicole Friedman, Summer Said and Benoit Faucon
Subject: Supply & demand; Energy industry; Crude oil prices
Location: Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia Naimi, Ali I
Company: Organization of Petroleum Exporting Countries--OPEC
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: May 9, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N. Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787448261
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787448261?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Total to Buy Saft to Boost Renewable Energy Business; Battery maker's board has approved proposed takeover by French oil company
Author: Kostov, Nick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2016: n/a.
Abstract:
Total last month said it would create a gas, renewable energy and power trading unit, a move designed in part to diversify the company's revenue away from highly volatile oil prices.
Full text: Total SA said on Monday it has agreed to buy Saft Groupe SA in a deal that aims to bolster the French oil company's competitiveness in clean energy. Total is offering to pay [euro]36.50 ($41.62) per share, valuing Saft at [euro]950 million. It said its offer price represents a 38.3% premium to Saft's closing share price on May 6. Saft, a French firm that makes batteries for industrial use by telecommunications, railway and aerospace companies, said its supervisory board unanimously approved the proposed takeover by Total, which it considers "to be in line with the interests of the company, its shareholders and its employees." Total last month said it would create a gas, renewable energy and power trading unit, a move designed in part to diversify the company's revenue away from highly volatile oil prices. "The acquisition of Saft is part of Total's ambition to accelerate its development in the fields of renewable energy and electricity," said Total's Chief Executive Patrick Pouyanné. The new unit, Total's fourth alongside exploration and production, marketing and services, and refining and chemicals, will start operating on Sept. 1. The oil company plans to become a major operator in renewable energy and electricity trading within 20 years. Total shares were flat at [euro]42.95 in midmorning trade in Paris, while France's broader CAC-40 index was up 1%. Saft was yet to trade. Write to Nick Kostov at Nick.Kostov@wsj.com Credit: By Nick Kostov
Subject: Corporate profiles; Power marketers
Company / organization: Name: Total SA; NAICS: 447190, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Ma y 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787459040
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787459040?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Investors Anxious on Dollar --- Currency is down this year but can turn quickly, hurting stocks, oil, emerging markets
Author: Iosebashvili, Ira; Dulaney, Chelsey; Whittall, Christopher
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 May 2016: C.1.
Abstract:
Mr. Upadhyaya, whose firm manages $249 billion, has shut down his bullish positions on the dollar in recent months in favor of emerging-market currencies, including the Indian rupee, Russian ruble and Argentine peso. Federal-funds futures, used by investors and traders to place bets on central-bank policy, showed Friday that the odds for a rate increase at the Fed's June meeting were 13%, while the chances of a rate increase at the December meeting were 61%, according to CME Group.
Full text: The powerful rallies that have lifted stocks, crude oil and emerging markets for the past three months have one important thing in common -- the falling dollar -- and investors are growing anxious that it could prove to be the weak link. While the dollar is down 4.5% this year and near a one-year low against a basket of currencies, other investments have surged. U.S. crude prices are up 70% from their February lows. Gold was up 16.5% in the first quarter, its best in three decades. And emerging-market stocks, bonds and currencies have enjoyed double-digit gains in 2016. Analysts at Morgan Stanley measured the correlation between a weak dollar and their own index of investor appetite for riskier assets. They found it near its highest level in 20 years. The concern is that it is a relationship that could easily go in the opposite direction. The dollar depends heavily on perceptions of what the Federal Reserve will do with interest rates, and those perceptions could change quickly. Meanwhile, analysts warn that the fundamentals for oil, emerging-market assets and even many stocks look too weak to support the recent price gains on their own. "Currency is the most influential factor for markets this year," said Graham Secker, head of European equity strategy at Morgan Stanley. "If the dollar starts moving higher, global risk appetite will fall." On Friday, Labor Department figures showing that U.S. job growth slowed in April kept alive the bet on riskier markets. The data gave the Federal Reserve little reason to raise interest rates soon, economists said. But traders fret that every new economic report could bring the Fed a step closer to raising rates -- a move that would be expected to support the dollar -- if data come in stronger than expected. Higher rates make a currency more attractive to yield-seeking investors. "I was like 'phew,'" said Paresh Upadhyaya, director of currency strategy at Pioneer Investments, after the weaker-than-expected jobs numbers were announced on Friday. "I breathed a sigh of relief that this risk rally will continue." Mr. Upadhyaya, whose firm manages $249 billion, has shut down his bullish positions on the dollar in recent months in favor of emerging-market currencies, including the Indian rupee, Russian ruble and Argentine peso. The next test could come soon. This week brings retail-sales figures and speeches from Fed officials. The following week, the government announces industrial-production numbers. When the dollar weakens, dollar-denominated commodities tend to appreciate in value, even though many of those markets are heavily oversupplied. Also, emerging-market currencies strengthen, and the foreign-currency debt of those countries becomes cheaper to pay back. Still, many developing economies are struggling with waning demand from China, a major commodity customer. Stocks and other assets could also get caught in any dollar updraft. Morgan Stanley's Global Risk Demand Index, which measures risk appetite by analyzing moves in markets such as stocks, commodities and emerging markets, is moving nearly in the opposite direction of dollar strength. The correlation reached negative 86% in early April. A large negative correlation means risky assets tend to fall when the dollar gains and rise when the dollar falls. As of May 5, the correlation was minus-76%. The Fed began the year with plans to raise interest rates four times after boosting rates by a quarter of a percentage point in December. But in March, Fed Chairwoman Janet Yellen signaled that the central bank was in no hurry to raise interest rates, citing slower global growth. Federal-funds futures, used by investors and traders to place bets on central-bank policy, showed Friday that the odds for a rate increase at the Fed's June meeting were 13%, while the chances of a rate increase at the December meeting were 61%, according to CME Group. Hedge funds and other speculative investors are now more bearish on the dollar than at any other time since February 2013, data from the CFTC and Scotiabank shows. The negative view on the dollar has grown as the Fed displayed a more cautious view on raising interest rates, while central banks in Europe and Japan appear reluctant to ease their own monetary policies further. That is bad news for the dollar, which has benefited from expectations that the gap between U.S. and foreign interest rates will continue to widen. However, that bearish positioning also means any sign the Fed is turning more hawkish could send investors scampering to buy dollars, pushing the U.S. currency sharply higher. "The market has become complacent," said Steven Englander, head of G-10 FX strategy at Citigroup Inc. "There's the risk . . . the Fed gives a sudden indication that really surprises the market." Indeed, some analysts warn that investors may be underestimating the chance of an earlier rate increase. A number of Fed officials have suggested that a move toward higher rates isn't off the table in the near term. Dallas Fed President Robert Kaplan said he would support a move in June or July if economic data improve. Fed officials in St. Louis and Atlanta have expressed similar thoughts. A strong dollar doesn't necessarily spell bad news for all markets. Stock markets in Japan and Europe have suffered this year, in part because of their currencies appreciating against the dollar. That weighs on local exporters. "I don't think necessarily a rising dollar is negative for all asset classes," said Peter Fitzgerald, head of multi assets at Aviva Investors. "A rising dollar would see the yen and the euro weakening, which would be supportive for those markets." Credit: By Ira Iosebashvili, Chelsey Dulaney and Christopher Whittall
Subject: Emerging markets; Currency; American dollar; Abreast of the market (wsj)
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: May 9, 2016
column: Abreast of the Market
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787459538
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787459538?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Saudis Push Fresh Change --- Shake-up brings new leadership to some major institutions, including oil ministry
Author: Bill Spindle; Margherita Stancati; Ahmed Al Omran; Spindle, Bill; Stancati, Margherita; Ahmed Al Omran
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 May 2016: A.10.
Abstract:
Against that backdrop, King Salman bin Abdulaziz al Saud, who assumed the throne last year, and his 30-year-old son, Deputy Crown Prince Mohammed bin Salman, are moving quickly to try to make the government more efficient and create new job opportunities in the private sector.
Full text: RIYADH -- Saudi Arabia forged ahead a far-reaching government shake-up this weekend, adding to a barrage of proposals aimed at overhauling the economy and convincing legions of young people that change is coming to the conservative kingdom. The monarchy announced a sweeping reorganization Saturday that included new leadership at some of Saudi Arabia's most important institutions, including the powerful oil ministry and the central bank. The changes come less than two weeks after Saudi Arabia said it would wean itself off oil, which still provides the vast majority of government revenue even though prices have fallen in recent years. Even if oil prices rise to prior levels, the kingdom will struggle to continue lavishing its population with generous benefits. Yet reducing welfare benefits carries the risk of political instability. More than half of the Saudi population is under 25, according to government data, and the memory of the Arab Spring, which unseated several of the region's autocrats, is fresh. In addition, extremist groups such as Islamic State and al Qaeda have established a presence in the kingdom. Against that backdrop, King Salman bin Abdulaziz al Saud, who assumed the throne last year, and his 30-year-old son, Deputy Crown Prince Mohammed bin Salman, are moving quickly to try to make the government more efficient and create new job opportunities in the private sector. "I've never seen this kind of dynamism, such quick change in the country. And it's because time is running out," said John Sfakianakis, a former economic adviser to the Saudis and the Riyadh-based director of research for the Gulf Research Center. "If the country doesn't think of its future today, 10 years from now, when you have these demographics pressuring the country. . .where are these people going to find jobs?" he said. The changes announced Saturday included replacing the oil minister, Ali al-Naimi, 80, with a younger technocrat, Khaled al-Falih, whose responsibilities will be expanded to include the rapidly growing power sector and other natural resources. Mr. Falih, 55, previously served as the health minister and is chairman of the national oil company, Saudi Arabian Oil Co., better known as Aramco. A half-dozen other ministries and commissions were reformulated, eliminated or saw new heads appointed in an effort to improve government responsiveness and efficiency. The changes also included the establishment of new commissions for culture and entertainment, moves which could appeal to younger Saudis. The announcement followed a string of initiatives and bold pronouncements aimed at liberalizing the economy and creating jobs for the kingdom's youth. So far, the campaign is more about proposals and plans than action -- especially the sort of social and political changes that have proved difficult to implement in the past -- but some veteran observers of the kingdom say they're convinced the leadership is more serious than it has been in the past about real change. Prince Mohammed, who is second in the line of royal succession, has been given a mandate to overhaul nearly every aspect of the kingdom's petroleum-dependent economy. The prince and his father unveiled a plan last month to rebuild the kingdom's economic foundations and diversify the economy away from oil, which the government says accounted for over 70% of revenues last year. A more detailed package of proposals on how to achieve those goals, known as the National Transformation Plan, is expected to be released in coming weeks. During last month's presentation, Prince Mohammed said he thinks Saudi Arabia will be able to live without oil by as early as 2020 -- a startling assertion given the fundamental changes that would demand. Economic plans aren't new in the kingdom. The government began implementing five-year plans in the 1970s, but they often ran aground when oil prices rose and public resistance mounted. The rapid pace at which the monarchy is moving to reorganize its bureaucracy has raised some hope that this time around it will be able to deliver on at least some of its promises. Rami Taibah, a 34-year-old web developer from Jeddah, said Saturday's cabinet reshuffle was necessary if the government is serious about pushing major changes. "I'm not worried about the pace of change." he said. "Everything used to be slow. It's good to see things move quickly for a change." Credit: By Bill Spindle, Margherita Stancati and Ahmed Al Omran
Subject: Foreign investment; Political leadership; Governmental reform
Location: Saudi Arabia
People: Naimi, Ali I Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.10
Publication year: 2016
Publication date: May 9, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787459550
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787459550?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Glencore Plays Big in Fuel Oil; In two recent quarters, commodities trader has bought up large volumes at a time of day when it has an outsize price effect
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2016: n/a.
Abstract:
According to Platts, that bid to boost liquidity reduced volatility in the fuel-oil market.
Full text: In a lightly trod corner of the oil market, Glencore PLC is leaving a big footprint. During two of the past five quarters, the commodities trader has bought up large volumes of fuel oil at Asia's main trading hub in Singapore at a time of day when it has an outsize effect on an Asia-wide price benchmark. Trades made during the daily "Platts window"--the final few minutes of trading--are reported to Platts, an energy-price publisher, which uses the data to calculate a daily benchmark used to price millions of barrels of fuel oil across Asia. In the first quarter, Glencore bought 20.7 million barrels of Singapore-traded fuel oil in the window--44% of all the Platts-window buying--according to the publisher, which is owned by S&P Global Inc. During that period, fuel-oil prices in Singapore rose 7.5%, according to Platts, outpacing Brent crude oil, up 6.2%, and U.S.-traded crude oil, up 3.5%. "The fuel-oil bull play has been a fairly regular feature of the market-on-close window for many years," said John Driscoll, chief strategist at JTD Energy Services in Singapore and a former fuel oil-trader. "Singapore is the world's largest marine-fuels market and serves as the central pricing hub for petroleum products east of Suez. These conditions tend to favor bullish traders who have the resources and conviction to aggressively bid the window for a sustained period of time." Glencore had no comment on the trades. Buying large amounts of the fuel in the Platts window isn't illegal, and Platts says it employs controls to ensure the prices it uses are a fair representation of the market. Yet the buying marked a big pickup in trading by Glencore in Singapore: Its Platts-window purchases in the second quarter were more than twice what it bought in the window during the prior two quarters combined, according to the publisher. Glencore, like many commodities-trading firms operating in Singapore, is a major supplier of energy across Asia. One of its subsidiaries, Chemoil, was Singapore's biggest supplier last year of bunker fuel, a type of fuel oil, according to Singapore's port authority. Some traders, shipbrokers and commodity experts say Glencore's purchases have hallmarks of a trading gambit sometimes employed in the lightly regulated world of fuel-oil trading. In it, traders buy large quantities of physical fuel oil to benefit a separate position elsewhere, such as in the derivatives market or elsewhere in the physical market. One Singapore derivatives broker said Glencore owned a sizable position in fuel-oil derivatives at the time of its Platts-window trades. Commodities trading firms like Glencore often use the derivatives market to protect against market volatility. Glencore was also a big Platts-window buyer in the second quarter of last year, buying 14.6 million barrels of Singapore fuel oil, or 27% of the Platts-window total. Platts has taken measures to damp the clout of individual traders--last year, for example, it increased the number of terminals in the Singapore region at which fuel oil traded in its window can be delivered. According to Platts, that bid to boost liquidity reduced volatility in the fuel-oil market. "The Singapore refined-oil-product markets are highly liquid, attracting dozens of buyers and sellers from across the world, and our assessments of those markets remain robust," Platts said in a statement. "It's worth highlighting that our rigorous standards in our oil benchmarks are fully open to public scrutiny, and a result of information provided to us on a level playing field." It is not the first time a big trader has flexed its muscle in an obscure corner of the energy market. Last year, Chinaoil, the trading arm of state-owned China National Petroleum Corp., on several occasions bought big swaths of crude oil traded in the Dubai market, a key Middle East pricing benchmark. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Crude oil; Derivatives; Energy industry
Location: Asia Singapore
Company / organization: Name: Glencore PLC; NAICS: 211111, 212210, 212234, 311314; Name: S & P Global Inc; NAICS: 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787479801
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787479801?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Speculative Investors Cut Bullish Crude Oil Price Bets; Doubts grow about sustainability of recent rally in prices
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2016: n/a.
Abstract:
Related News * Global Stocks Edge Higher Even as Oil Pares Gains * Heard on the Street: Oil's Blazing Canadian Wake-up Call * Oil Prices Waver on Fundamentals Amid Uncertainty Over Saudi Oil Minister's Exit Managed-money accounts increased the number of short positions in Brent by 22% to 39.5 million barrels, according to the Commitment of Traders report from the ICE.
Full text: LONDON--Speculative investors in oil cut their bullish bets on the price of crude for the first time in a month last week as doubts grew about the sustainability of this market's recent rally . Oil prices have surged more than 70% since hitting decade-lows earlier this year on hopes that the global oversupply is set to shrink due to declining U.S. production and a spate of supply disruptions from Nigeria to Venezuela. But last week, hedge funds and other money managers reduced bets that the price of Brent, the international benchmark, will continue to rise, data from the Intercontinental Exchange Inc. showed on Monday. The previous week, such bets hit a record high, amid an uptick in positive sentiment in the oil market. Funds also lowered their bullish bets in West Texas Intermediate, the U.S. price gauge. "The data is a cause for caution, since the momentum behind the rally might be starting to ebb," said Gareth Lewis-Davies, senior commodity strategist at BNP Paribas. On Monday, Brent crude was trading at $45.26 a barrel, down 0.3%, while WTI was changing hands at $44.72 a barrel, up 0.2%. To be sure, the data covers the week that ended Tuesday, meaning it won't fully take into account wildfires in the heart of Canada's oil-rich province of Alberta. These fires have knocked out some 700,000 barrels a day of production, adding to a number of production outages in recent weeks that have supported prices. But analysts say that most of that production is expected to come back online soon. "The price action after the Canadian news broke has not been that convincing. We have seen rallies but we have been falling back again," said Ole Hansen, head of commodity strategy at Saxo Bank. Meanwhile, Iran keeps raising its output after international sanctions against the country were lifted in January. Analysts also point to last year when the oil price also rallied in the spring on a belief that supply was falling, only to collapse in the year's second half. "Global supply still exceeds demand and we might see price weakness in the next few months," Mr. Lewis-Davies said. "If all those bullish bets start to unwind, that would be quite bearish for the outlook." Related News * Global Stocks Edge Higher Even as Oil Pares Gains * Heard on the Street: Oil's Blazing Canadian Wake-up Call * Oil Prices Waver on Fundamentals Amid Uncertainty Over Saudi Oil Minister's Exit Managed-money accounts increased the number of short positions in Brent by 22% to 39.5 million barrels, according to the Commitment of Traders report from the ICE. The number of long positions--bets that the crude oil price would rise--fell by 6% to 424 million barrels. That left the net long position--bets on rising prices minus bets on falling prices--down 8.4% from the previous week. This mirrored developments in WTI, where money managers reduced bets on rising prices by 3.7% in the week ended Tuesday, while slightly edging up on short sales against the market. Long bets still outnumber short ones by nearly five to one, but it was the first decline in net length--and the first increase in short sales--in a month. Christian Berthelsen contributed to this article Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Crude oil prices; Short sales; Investment advisors; Crude oil
Location: Venezuela United States--US Nigeria
Company / organization: Name: Intercontinental Exchange Inc; NAICS: 523210; Name: BNP Paribas; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787494884
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787494884?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Ship Owners Cut Oil Tanker Orders; Rising crude prices and stricter emissions regulations are raising concerns about overcapacity in the oil tanker market, one of the shipping industry's few bright spots.
Author: Whelan, Robbie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2016: n/a.
Abstract:
"Ship owners like having shiny new toys, and the tanker market has been fairly immune to the depression in the market until fairly recently," said Tony Salgado, a partner in the maritime practice at Washington law firm Blank Rome LLP. top logistics news * Get the latest logistics and supply chain news and analysis via an email newsletter.
Full text: Oil tanker operators are on pace to cut their new vessel orders by nearly two-thirds this year, a sign of growing concerns about overcapacity in one of the shipping industry's few bright spots, Drewry Maritime Research said in a report. Just 34 new tankers were ordered in the first quarter, with shipowners on pace to commission 132 vessels this year. That's down from 368 in all of 2015, Drewry said. Investors often use new vessel orders as a proxy for ship-owners' expectations for demand over the next few years. Cheap oil has been a boon for tanker companies like Euronav NV and Frontline Ltd. Annual new vessel orders have tripled since 2012, as carriers struggled to keep up with surging demand for oil as prices declined. But the sector has cooled in recent months, as concerns grew about overcapacity in the tanker market, and oil prices bounced back from multi-year lows hit in January. Stricter emissions regulations and reduced access to credit also curbed ship orders, Drewry said. "Ship owners like having shiny new toys, and the tanker market has been fairly immune to the depression in the market until fairly recently," said Tony Salgado, a partner in the maritime practice at Washington law firm Blank Rome LLP. top logistics news * Get the latest logistics and supply chain news and analysis via an email newsletter. Sign up here. Weak consumer demand in Europe and an industrial slowdown in China, combined with lots of excess shipping capacity, have hurt prices in the two other maritime logistics sectors: container shipping and transportation of dry bulk freight, usually commodities, Mr. Salgado said. "There's been some over-purchasing," he said. "The tanker industry is in essence seeing the same thing and ratcheting back their order book." Drewry said that despite the slowdown in new vessel requests, there are still 63.7 million deadweight tons of new orders on the books to be delivered over the next few years, or the equivalent of about 18.6% of the entire crude tanker fleet. Drewry expects more than 200 new crude tankers to be completed by the end of 2017. Write to Robbie Whelan at robbie.whelan@wsj.com Credit: By Robbie Whelan
Subject: Law firms; Tankers; Attorneys; Shipping industry; Logistics
Company / organization: Name: Blank Rome LLP; NAICS: 541110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787528721
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787528721?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil: What the Saudi Shake-Up Means; The removal of Saudi Arabia's oil minister isn't bearish in and of itself for oil prices because policy was already set by the palace, but the pace of reforms bears much more watching
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2016: n/a.
Abstract:
[...]Saudi energy policy has always fluctuated between economic and political prerogatives.
Full text: Oil-market watchers need to know which way the political wind blows in the Middle East's petrostates. Even so, a literal shift in the wind in far-off Canada had far more impact on oil prices than a seemingly major move in top exporter Saudi Arabia. Once analysts got over the shock of Saturday's news that the kingdom's longtime oil minister Ali al-Naimi had been ousted, they focused on the wildfires that have taken about 1 million barrels of daily production offline near Alberta's Fort McMurray. Cooler weather and possible rain depressed prices. Mr. al-Naimi's ouster might seem like a far more bearish factor since it is widely acknowledged that he was overruled by Crown Prince Mohammed bin Salman at last month's Doha summit. The young reformer, seen as the power behind the throne, reportedly nixed any agreement on a production freeze that excluded a similar commitment from Iran. That country, recently freed from international nuclear sanctions that hobbled its exports, was opposed from the outset to any such deal. But some context is necessary. First, Mr. al-Naimi, the face of Saudi energy policy for decades, was headed for retirement already. The shake-up encompassed many other ministries as part of a broad overhaul . Second, Saudi energy policy has always fluctuated between economic and political prerogatives. The latter seems ascendant at the moment, but oil watchers already knew that. A new face--and Khalid al-Falih, the new minister and outgoing head of Saudi Aramco is actually not so new--doesn't mean a change in course. Saudi internal politics still has huge implications for oil prices, of course. It is just that the latest headlines won't be a big driver of them. Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Subject: Energy policy
Location: Canada Iran Middle East
People: Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 9, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787532388
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787532388?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Chaparral Energy Files for Bankruptcy Protection; Oil and gas driller negotiating terms of debt-for-equity swap with lenders and bondholders
Author: Fitzgerald, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 May 2016: n/a.
Abstract:
The Oklahoma City-based oil and gas driller filed for chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., as it works to negotiate the terms of a debt-for-equity swap with its lenders and bondholders that will slash $1.2 billion in debt off its books.
Full text: Oil and gas company Chaparral Energy Inc. filed for chapter 11 bankruptcy protection Monday, the latest victim of low oil prices that continue to devastate the industry. The Oklahoma City-based oil and gas driller filed for chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., as it works to negotiate the terms of a debt-for-equity swap with its lenders and bondholders that will slash $1.2 billion in debt off its books. Chief Executive Mark Fischer said Monday the balance-sheet restructuring will position Chaparral to "weather this down environment." The company intends to continue operating without interruption throughout the restructuring and is seeking court approval to continue paying its employee and royalties to mineral owners Chaparral skipped a March interest payment to bondholders and said it would default on the bonds, and thus all $1.6 billion of its debt, at the expiration of a 30-day grace period. Chaparral joins dozens of other oil and gas exploration companies that have filed for bankruptcy over the past year. Sixty-seven oil and gas exploration and production companies filed bankruptcy proceedings last year, according to consulting firm Gavin/Solmonese. And dozens more have filed for court protection this year. Although benchmark U.S. oil prices have recently rebounded to more than $40 a barrel since hitting a 13-year low in February, they're still well below the $100 per barrel producers were getting as recently as the summer of 2014. Founded in 1988, privately held Chaparral's biggest shareholder, with a 36.18% stake, is a fund managed by private-equity firm CCMP Capital Advisors. Other major shareholders include Mr. Fischer, whose Fischer Investments owns a 24.5% stake in the company, an Ontario pension fund and Altoma Energy GP, according to court papers. Latham & Watkins LLP is handling Chaparral's bankruptcy case, and the company has hired Evercore as its financial adviser. The case number is 16-11144. A bankruptcy judge has yet to be assigned the case. Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com Credit: By Patrick Fitzgerald
Subject: Bankruptcy reorganization; Bankruptcy; Litigation; Energy economics; Debt restructuring
Location: Oklahoma
Company / organization: Name: Latham & Watkins; NAICS: 541110; Name: Chaparral Energy Inc; NAICS: 211112; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787586145
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787586145?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
As Saudi Arabia Looks Beyond Oil, Its Fight to Remain Top Exporter Intensifies; Kingdom shaken as oil prices plunge to 13-year lows
Author: Faucon, Benoit; Williams, Selina; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract:
The country's powerful young Prince Mohammed bin Salman has introduced a package of economic and social policies aimed to free Saudi Arabia from its dependence on oil revenues, including selling a stake in the state oil company and boosting tax receipts from mining and tourism.
Full text: Even as Saudi Arabia attempts to reduce its dependence on oil, the kingdom's economic battle over the oil market with Iran, Russia and others is intensifying, a contest that OPEC officials say won't settle down until geopolitical rifts in the Middle East cool. Saudi Arabia's rivalry with Iran has contributed to violent conflicts in Syria and Yemen, where Riyadh and Tehran support opposing sides, and made it nearly impossible for the Organization of the Petroleum Exporting Countries to agree on tactics to raise collapsed crude prices. What needs to be resolved first are "strategic issues in the region, Yemen, Syria," said Amir Hossein Zamaninia, Iran's deputy oil minister for international affairs, in an interview. "The international community needs to take an agreed upon approach before things get settled down as far as OPEC is concerned." The descent of oil prices to 13-year lows this year, the nadir of a nearly two-year slump, has shaken Saudi Arabia, the world's largest oil exporter. The country's powerful young Prince Mohammed bin Salman has introduced a package of economic and social policies aimed to free Saudi Arabia from its dependence on oil revenues, including selling a stake in the state oil company and boosting tax receipts from mining and tourism. Low oil prices have also forced the kingdom to scramble to fend off competition for oil buyers from Asia to the U.S. Saudi Arabian officials have warily eyed the rise of Iranian exports as the Islamic Republic ramps up production following more than three years of crippled output because of Western sanctions on its nuclear program. Saudi Arabia and Iran have announced price cuts for their crude as they compete in Europe and Asia. In an interview, Mohsen Ghamsari, the director in charge of marketing oil at the National Iranian Oil Co., said Iran wouldn't provide outright discounts for its crude. But, he said, "with Saudi Arabia, there is a price competition." The removal of longtime Saudi oil minister Ali al-Naimi over the weekend was widely seen as a bid by Prince Mohammed to dig in his heels against the encroachment of Iran on its oil buyers. The prince "seems fully committed to waging a brutal battle for market access against arch regional rival Iran," said Helima Croft, global head of commodity strategy at RBC Capital Markets LLC. "He apparently is not prepared to concede an inch in terms of oil market access," she added. For oil traders, a market-share tussle between Saudi Arabia and Iran would signal that the global glut of crude that has weighed on prices isn't going away soon. The situation also gives the two countries another sore point against each other at a time of frayed diplomatic relations. Riyadh, where Sunnism is the main form of Islam, cut off ties with Shiite-dominated Tehran after protesters ransacked Saudi diplomatic buildings after the execution of a Shiite cleric in Saudi Arabia. Tehran has been among Saudi Arabia's biggest critics for the deaths of hundreds of pilgrims during a stampede in Mecca last year. The two countries also support opposing sides in Syria, where Iran backs President Bashar al-Assad, and in Yemen, where Saudi Arabia has led a military campaign against Tehran-supported rebels. Complicating the picture are low oil prices that have reordered the energy-sales landscape across the world. Saudi Arabia has ceded its grip on oil markets in the U.S. and parts of Asia and Europe. Iran, Russia and others have forced the kingdom to look for new markets. Saudi Arabia's crude-oil exports to its biggest single customer--the U.S.--have fallen almost a fifth between 2013 and 2015 because of surging American and Canadian oil production. The Saudis are losing traction in Japan, where they supplied 33.7% of oil imports in March, down from 37.6% last year, while Russia gained 1% over the same time there. And the kingdom's efforts to grab some of Russia's European customers by selling at cut-rate prices hasn't worked so far. Russia has managed to keep its European market share steady at around 26% in 2014 and 2015, while Saudi Arabia has slipped, according to data from London-based consultancy FGE. The appointment of a new Saudi oil minister , Khalid al-Falih, comes after Iran's crude exports have surprised to the upside. "Things will intensify," said energy analyst Jamie Webster. "In the short term the battle is in Europe, but the overall war is for the growing Asia demand," he added. The appointment of Mr. Falih as the new oil minister signaled the contest would continue. In his first public statement as oil minister, Mr. Falih said Sunday the kingdom was "committed to maintaining our role in international energy markets and strengthening our position as the world's most reliable supplier of energy." Benoit Faucon reported in Tehran, Selina Williams in London and Summer Said in Dubai. Write to Benoit Faucon at benoit.faucon@wsj.com , Selina Williams at selina.williams@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon, Selina Williams and Summer Said
Subject: Crude oil prices; Petroleum production; Price cuts; Supply & demand
Location: Russia Riyadh Saudi Arabia Iran United States--US Syria Yemen Asia Europe Saudi Arabia Middle East
People: Naimi, Ali I Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: RBC Capital Markets; NAICS: 523110; Name: National Iranian Oil Co; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787641969
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787641969?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Total to Buy Saft to Boost Renewable Energy Business; Battery maker's board has approved proposed takeover by French oil company
Author: Kostov, Nick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract: None available.
Full text: Total SA said on Monday it has agreed to buy Saft Groupe SA in a deal that aims to bolster the French oil company's competitiveness in clean energy. Total is offering to pay [euro]36.50 ($41.62) per share, valuing Saft at [euro]950 million. It said its offer price represents a 38.3% premium to Saft's closing share price on May 6. Saft, a French firm that makes batteries for industrial use by telecommunications, railway and aerospace companies, said its supervisory board unanimously approved the proposed takeover by Total, which it considers "to be in line with the interests of the company, its shareholders and its employees." Total last month said it would create a gas, renewable energy and power trading unit, a move designed in part to diversify the company's revenue away from highly volatile oil prices. "The acquisition of Saft is part of Total's ambition to accelerate its development in the fields of renewable energy and electricity," said Total's Chief Executive Patrick Pouyanné. The new unit, Total's fourth alongside exploration and production, marketing and services, and refining and chemicals, will start operating on Sept. 1. The oil company plans to become a major operator in renewable energy and electricity trading within 20 years. Total shares were flat at [euro]42.95 in midmorning trade in Paris, while France's broader CAC-40 index was up 1%. Saft was yet to trade. Write to Nick Kostov at Nick.Kostov@wsj.com Credit: By Nick Kostov
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 178764 1988
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787641988?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Fall as Threats From Canada Wildfires Abate; July Brent fell $0.02 to $43.61 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract:
If the figures prove accurate when official U.S. Energy Department data are released Wednesday, it would add yet more oil to the global glut, especially at a time when production by the Organization of the Petroleum Exporting Countries is expected to have increased in April.
Full text: Crude oil prices traded lower in Asian trade Tuesday as threats on oil output due to Canada's wildfires have ebbed, rekindling concerns of a growing supply glut. With about 2,400 structures burned to the ground, the fire in Alberta, Canada has been dubbed as the costliest natural disaster in Canadian history. Given the proximity to the oil-sand industry, many oil producers in the area have reduced their crude-oil output, with at least 654,000 barrels a day now cut, more than a quarter of daily production. Fire officials said cooler temperatures has slowed the spread of the wildfires since Sunday. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $43.23 a barrel at 0156 GMT, down $0.21 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.02 to $43.61 a barrel. Oil prices came under more pressure after private data forecaster Genscape Inc. said inventory at key U.S. delivery hub in Cushing, Okla. gained 1.4 million barrels. Analysts surveyed by Platts estimate U.S. crude stocks to have increased 300,000 barrels in the latest week. If the figures prove accurate when official U.S. Energy Department data are released Wednesday, it would add yet more oil to the global glut, especially at a time when production by the Organization of the Petroleum Exporting Countries is expected to have increased in April. Official OPEC data is due Friday. "The data was enough to spark profit taking as position data showed investors holding the most long positions in West Texas Intermediate since last year, while North Sea Brent contracts held are at near record levels," said Start Ive, a client manager at OM Financial. Uncertainty over demand is also keeping traders in cautious mode. In April, China's imports sank by a sharper-than-expected 10.9% from a year ago, steeper than the 7.6% drop in March. Even though the country remains thirsty for crude with April's crude imports rising 7.6% on-year, the overall imports is worrisome, analysts said. "For now, China's crude demand will likely stay strong because private refiners are looking to max out their import quota while crude prices are still low," said Gao Jian, an energy analyst at SCI International. "But it is hard to gauge how long this rally will sustain because refining margin is slowly narrowing and some of the refiners are scheduled for maintenance later this year," he added. As Chinese private refiners, also known as teapots, ramp up their refining activities to capture the still-healthy refining margin, outlook on regional product prices darkens. For now, these teapots are mainly selling products into the domestic market but with refining profits waning, it could compel the teapots to shift their focus to export, exacerbating the already weak diesel market, said research firm Jefferies. "How quickly teapots flood the market depends on how much crude import and refined product export quota would be granted. We believe the Chinese government would not restrain exports," the firm said in a note. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--rose 25 points to $1.4452 a gallon, while June diesel traded at $1.2858, 5 points lower. ICE gasoil for May changed hands at $380.25 a metric ton, down $0.50 from Monday's settlement. Christian Brethelsen and Chester Dawson contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Price increases; Crude oil
Location: United States--US Alberta Canada
Company / organization: Name: Genscape Inc; NAICS: 511140, 518210; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787649970
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787649970?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Malaysia Stocks Fall on Weaker Oil Prices; FTSE Bursa Malaysia Index declines 0.4% to 1,625.13 points
Author: Ngui, Yantoultra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract: None available.
Full text: 0224 GMT [Dow Jones] The FTSE Bursa Malaysia Index declines early Tuesday, pressured by lower crude oil prices. The 30-stocks benchmark index declines 0.4% to 1,625.13 points, with declines led by petrol stations operator Petronas Dagangan (5681.KU) and gas processing firm Petronas Gas (6033.KU). Shares of the companies drop 2.2% and 1.3% respectively in early trade. Among the top gainers in the index are shipping firm MISC (3816.KU) and chemical firm Petronas Chemicals Group (5183.KU), which are up 3.3% and 1.8% respectively. Write to Yantoultra Ngui at yantoultra.ngui@wsj.com Credit: By Yantoultra Ngui
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787665160
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787665160?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Health Care Lifts Nasdaq Composite --- Lower oil prices push down energy stocks, weighing on the broader market
Author: Kuriloff, Aaron
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 May 2016: C.4.
Abstract:
Some investors said they don't expect a big rise in yields in a world of muddy global economic growth, subdued inflation and a Federal Reserve that is expected to remain patient in raising interest rates.
Full text: A rally in health-care and biotechnology shares helped the Nasdaq Composite Index outperform its peers Monday. The technology-heavy Nasdaq has trailed the Dow industrials and the S&P 500 as markets have rallied from their 2016 lows, in part because of weakness in biotechnology stocks. Health care's advance helped send the Nasdaq index up 0.3% Monday. Losses in the energy sector, spurred by falling oil prices and continuing concerns about a glut of crude, weighed on the broader market. Several investors said that stock-market gains are likely to be limited without new signs of earnings strength or improvement in the global economy. "From here, I think it's going to be important to have more definitive signs that earnings growth is going to resume, and that's not going to become more clear until we get to the second half of the year," said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas. The Dow Jones Industrial Average fell 34.72 points, or 0.2%, to 17705.91, while the S&P 500 rose 1.55 points, or less than 0.1%, to 2058.69. The Nasdaq rose 14.05 points to 4750.21. The index is down 5.1% in 2016, while the Dow industrials and S&P 500 are both in positive territory. Health-care companies were among the biggest gainers in the S&P 500, though the sector is still down 3% this year. Pharmaceutical company Mallinckrodt rose $3.45, or 6.1%, to $59.85. Allergan gained 12.06, or 6%, to 213.71. The Nasdaq Biotechnology Index climbed 2.4%, paring its 2016 loss to 23%. Shares of Teva Pharmaceutical Industries rose 5% to 52.81 after the company reported a better-than-expected quarterly profit. Christian O'Brien, who trades health-care stocks at Raymond James, said the Teva report helped ease lingering concerns over earnings at pharmaceutical companies and that "you're seeing a bit of a spillover into biotech as well." Declines in commodity prices, however, sent shares of energy and materials companies in the S&P 500 lower, with both sectors falling more than 1.2%. Gold, silver and copper futures all declined over 2%. Oil prices fell after reports that wildfires in Canada had slowed and moved away from key oil-production facilities. The U.S. oil benchmark ended down 2.7% at $43.44 a barrel on the New York Mercantile Exchange, and the global Brent contract lost 3.8% to finish at $43.63 a barrel on the ICE Futures Europe exchange. After rallying more than 70% in the previous three months from multiyear lows, both contracts have begun to pull back from 2016 highs amid concerns that the price rally has run ahead of reductions in the global glut of crude. Some traders said the fires were a more immediate factor than Saudi Arabia's removal of its oil minister, Ali al-Naimi, over the weekend. The decline in commodities prices helped boost U.S. government bonds. The yield on the benchmark 10-year Treasury note declined to 1.759%, compared with 1.779% Friday. Yields fall as bond prices rise. Some investors said they don't expect a big rise in yields in a world of muddy global economic growth, subdued inflation and a Federal Reserve that is expected to remain patient in raising interest rates. "Our view is that higher yields can't be sustained here, and so they present buying opportunities," said Christopher Sullivan, who oversees $2.3 billion as chief investment officer at United Nations Federal Credit Union in New York. "It'll be some time before inflation becomes threatening."" Meanwhile, shares of LendingClub fell 2.48, or 35%, to 4.62, an all-time low, after Chief Executive Renaud Laplanche resigned after the board found problems with lending practices. The Stoxx Europe 600 climbed 0.5%, and Germany's DAX index added 1.1% after data showed a sharp rebound in the country's manufacturing orders. In Asia trading Monday, the Shanghai Composite Index shed 2.8%. Chinese exports fell unexpectedly, which weighed on iron-ore futures and the shares of mining companies. Early Tuesday, the index was down 0.1%. Japan's Nikkei Stock Average rose 0.7% Monday, ending a six-session losing streak as the dollar rose 1.1% against the yen to 108.34 yen. Japan's finance minister said he was "prepared to undertake intervention" in the foreign-exchange market if the yen rose further and sharply. Early Tuesday. the Nikkei was up a further 0.5%. The U.S. dollar rose broadly Monday. The WSJ Dollar Index, which measures the buck against a basket of 16 currencies, rose 0.6% for its fifth consecutive session of gains. So far this year, the index has fallen 4%. On tap this week are readings on the health of the U.S. consumer, with retail-sales and consumer-sentiment data due later in the week. --- Min Zeng contributed to this article. Credit: By Aaron Kuriloff
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: May 10, 2016
column: Monday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787704829
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787704829?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Finance: Investors Boost Short Positions On Crude Oil
Author: Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 May 2016: C.3.
Abstract:
[...]last week, hedge funds and other money managers reduced bets that the price of Brent, the international benchmark, will continue to rise, data from Intercontinental Exchange Inc. showed on Monday.
Full text: Speculative investors cut their bullish bets on the price of crude oil for the first time in a month last week as doubts grew about the sustainability of the recent rally. U.S. oil prices have surged nearly 66% since hitting decade lows earlier this year on hopes that the global oversupply is set to shrink due to declining U.S. production and a spate of supply disruptions from Nigeria to Venezuela. But last week, hedge funds and other money managers reduced bets that the price of Brent, the international benchmark, will continue to rise, data from Intercontinental Exchange Inc. showed on Monday. The previous week, such bets hit arecord high, amid an uptick in positive sentiment in the oil market. Funds also lowered their bullish bets in West Texas Intermediate, the U.S. oil-price gauge. "The data is a cause for caution, since the momentum behind the rally might be starting to ebb," said Gareth Lewis-Davies, senior commodity strategist at BNP Paribas. On Monday, Brent crude lost 3.8% to $43.63 a barrel, while U.S. oil prices fell 2.7% to $43.44 a barrel. Still, the data covered the week that ended Tuesday, meaning it won't fully take into account wildfires in the heart of Canada's oil-rich province of Alberta. These fires have knocked out some 700,000 barrels a day of production, adding to a number of output outages in recent weeks that have supported prices. But analysts say that most of that production is expected to come back online soon. "The price action after the Canadian news broke has not been that convincing," said Ole Hansen, head of commodity strategy at Saxo Bank. "We have seen rallies but we have been falling back again." Meanwhile, Iran keeps raising its output after international sanctions against the country were lifted in January. Analysts point to last year when the oil price also rallied in the spring on a belief that supply was falling, only to collapse in the year's second half. "Global supply still exceeds demand, and we might see price weakness in the next few months," Mr. Lewis-Davies said. "If all those bullish bets start to unwind, that would be quite bearish for the outlook." Managed-money accounts increased the number of short positions in Brent by 22% to 39.5 million barrels, according to the Commitment of Traders report from ICE. The number of long positions -- bets that crude-oil prices would rise -- fell 6% to 424 million barrels. That left the net long position -- bets on rising prices minus bets on falling prices -- down 8.4% from the previous week. This mirrored developments in WTI, where money managers reduced bets on rising prices by 3.7% in the week ended Tuesday, while slightly edging up on short sales against the market. Long bets still outnumber short ones by nearly 5 to 1, but it was the first decline in net length -- and the first increase in short sales -- in a month. --- Christian Berthelsen contributed to this article. Credit: By Georgi Kantchev
Subject: Investment advisors; Short sales; Crude oil
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: May 10, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787705048
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787705048?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Finance: Glencore Bets Loom Large --- Timing of fuel-oil purchases in Asia has outsize effect on price benchmark
Author: Strumpf, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 May 2016: C.3.
Abstract:
According to Platts, that served to reduce volatility in the fuel-oil market.
Full text: In a lightly trod corner of the oil market, Glencore PLC is leaving a big footprint. During two of the past five quarters, the commodities trader has bought large volumes of fuel oil at Asia's main trading hub in Singapore at a time of day when it has an outsize effect on an Asiawide price benchmark. Trades made during the daily "Platts window" -- the final few minutes of trading -- are reported to Platts, an energy-price publisher, which uses the data to calculate a daily benchmark used to price millions of barrels of fuel oil across Asia. In the first quarter, Glencore bought 20.7 million barrels of Singapore-traded fuel oil in the window -- 44% of all the Platts-window buying -- according to the publisher, which is owned by S&P Global Inc. During that period, fuel-oil prices in Singapore rose 7.5%, according to Platts, outpacing Brent crude oil, up 6.2%, and U.S.-traded crude, up 3.5%. "The fuel-oil bull play has been a fairly regular feature of the market-on-close window for many years," said John Driscoll, chief strategist at JTD Energy Services in Singapore and a former fuel-oil trader. "Singapore is the world's largest marine-fuels market and serves as the central pricing hub for petroleum products east of Suez. These conditions tend to favor bullish traders who have the resources and conviction to aggressively bid the window for a sustained period of time." Glencore declined to comment on the trades. Buying large amounts of the fuel in the Platts window isn't illegal, and Platts says it employs controls to ensure the prices it uses are a fair representation of the market. Yet the buying marked a big pickup in trading by Glencore in Singapore: Its Platts-window purchases in the second quarter were more than twice what it bought in the window during the prior two quarters combined, according to the publisher. Glencore, like many commodities-trading firms operating in Singapore, is a major supplier of energy across Asia. One of its subsidiaries, Chemoil, was Singapore's biggest supplier last year of bunker fuel, a type of fuel oil, according to Singapore's port authority. Some traders, shipbrokers and commodity observers say Glencore's purchases have the hallmarks of a trading gambit sometimes used in the lightly regulated world of fuel-oil trading. In it, traders buy large quantities of physical fuel oil to benefit a separate position elsewhere, such as in the derivatives market or elsewhere in the physical market. One Singapore derivatives broker said Glencore owned a sizable position in fuel-oil derivatives at the time of its Platts-window trades. Commodities-trading firms like Glencore often use the derivatives market to protect against market volatility. Glencore was also a big Platts-window buyer in the second quarter of last year, buying 14.6 million barrels of Singapore fuel oil, or 27% of the Platts-window total. Platts has taken measures to damp the clout of individual traders. Last year, it increased the number of terminals in the Singapore region at which fuel oil traded in its window can be delivered. According to Platts, that served to reduce volatility in the fuel-oil market. "The Singapore refined-oil-product markets are highly liquid, attracting dozens of buyers and sellers from across the world, and our assessments of those markets remain robust," Platts said. "It's worth highlighting that our rigorous standards in our oil benchmarks are fully open to public scrutiny and a result of information provided to us on a level playing field." It is not the first time a big trader has flexed its muscle in an obscure corner of the energy market. Last year, Chinaoil, the trading arm of state-owned China National Petroleum Corp., on several occasions bought big swaths of crude oil traded in the Dubai market, a key Middle East pricing benchmark. Credit: By Dan Strumpf
Subject: Derivatives; Crude oil; Energy industry
Location: United Kingdom--UK
Company / organization: Name: Glencore PLC; NAICS: 211111, 212210, 212234, 311314
Classification: 8510: Petroleum industry; 9175: Western Europe
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: May 10, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787705175
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787705175?accountid=7117
Copyright: (c) 2016 Dow Jon es & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Stocks Notch Biggest Gains in Weeks as Oil Rebounds; All 10 sectors of the S&P 500 rise, though trading volume is relatively light
Author: Josephs, Leslie; Gold, Riva
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract: None available.
Full text: A broad rally bolstered by a rebound in oil prices Tuesday drove major U.S. indexes to their biggest gains since March. All 10 sectors of the S&P 500 rose, with gains in commodity-linked shares and financial stocks outpacing the broader market. The Dow Jones Industrial Average gained 222.44 points, or 1.3%, to 17928.35. The S&P 500 rose 25.70 points, or 1.2%, to 2084.39. The two indexes posted their largest percentage gains since March 11. Stock moves have been relatively small in the U.S. recently, after markets fell sharply and recovered earlier this year. Major indexes last notched a daily gain of at least 1% in mid-April. Energy shares in the S&P 500 rose 1.8%, more than any other sector. U.S. crude-oil prices increased 2.8% to $44.66 a barrel, as supply disruptions in Canada, Nigeria and elsewhere helped alleviate concerns about the global glut of crude. The Nasdaq Composite index added 59.67 points, or 1.3%, to 4809.88. Assets that investors often consider havens, such as gold and U.S. government debt, were steady--a sign many weren't convinced that the rally would last, traders and analysts said. "It shows us investors want to be in this market, but they're not fully committed," said Jonathan Corpina, senior managing partner at Meridan Equity Partners. U.S. stock-trading volume was 6.56 billion shares, below the daily average for the month and the year. The yield on the benchmark 10-year Treasury note was unchanged at 1.760%. Gold for May delivery fell 0.1% to $1,263.90 an ounce. Today's Highlights * Chart Watchers Warn: Time to 'Buckle In' * Scary Market Charts: Just Lines? * Investment Banker's Nightmare: You're No Longer Wanted * Luxury Condo Boom Is Ending in Manhattan The Dow industrials and S&P 500 are each up 0.9% this month and are off about 2% from the records they hit last May. But some investors have been struggling to reconcile the recent gains with a lackluster earnings season and weak economic growth. "There are more headwinds than catalysts" to push stocks higher, said Jeff Carbone, managing partner at Cornerstone Wealth. He said he has been selling stocks, particularly technology shares lately, and holding a higher cash balance than he usually does. Goldman Sachs Group was the biggest gainer in the Dow on Tuesday, up $3.91, or 2.5%, to 161.42, adding close to 27 points to the index. J.P. Morgan Chase rose 83 cents, or 1.4%, to 62.04. Financial shares in the S&P 500 rose 1.4%. Consumer shares also rallied, but there were some weak spots, particularly among traditional retailers. Gap tumbled 2.51, or 12%, to 19.30 after the company warned on Monday about weak same-store sales . Walt Disney dropped 5% in after-hours trading, following the company's quarterly earnings results . The Stoxx Europe 600 rose 0.9%, its largest gain since April 19. Japan's Nikkei Stock Average rose 2.2% on Tuesday. The dollar was up 0.9% against the yen at ¥109.27 in late New York trading, offering some respite for investors as a stronger yen puts pressure on Japan's exporters. In the Markets * Oil Prices Rise, Supply Outages in Focus * Asia Stocks Mostly Up as Japanese Shares Climb * U.S. Government Bonds Little Changed * Dollar Strengthens as Japan Warns of Forex Intervention Write to Leslie Josephs at leslie.josephs@wsj.com and Riva Gold at riva.gold@wsj.com Credit: By Leslie Josephs and Riva Gold
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787708766
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787708766?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Emirates Airline Full-Year Profit Lifted by Low Oil Prices; Emirates' fuel bill was reduced by 31% and now constitutes 26% of its operational costs
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract:
Emirates is the oldest and biggest of the three major Persian Gulf airlines, along with Etihad Airways and Qatar Airways, which over the past decade have overtaken more established competitors in Europe and the U.S. They've done so by investing heavily in new planes and by aggressively expanding their world-wide networks, using major airports in cities like Doha and Dubai as hubs to facilitate long-haul traffic between the continents.
Full text: DUBAI--Emirates Airline on Tuesday reported a 56% jump in full-year net profit, as the state-owned carrier was boosted by low oil prices and increased passenger numbers. Net profit for the financial year ending March 31 rose to $1.9 billion from $1.2 billion a year earlier, Emirates Chairman Sheikh Ahmed bin Saeed Al Maktoum told a news conference. Full-year revenue dropped 4% to $23.2 billion from $24.2 billion a year earlier. The drop in oil prices since the middle of 2014 has boosted profits for global airlines. Emirates' fuel bill was reduced by 31% and now constitutes 26% of its operational costs compared with 35% the previous year, the company said. At the same time, low fuel and the strong dollar have affected the airline's revenues, Sheikh Ahmed said. "Each year brings a new set of challenges and last year was no different," Sheikh Ahmed said. "Low oil prices will continue to be a double-edged sword," he said. Emirates is the oldest and biggest of the three major Persian Gulf airlines, along with Etihad Airways and Qatar Airways, which over the past decade have overtaken more established competitors in Europe and the U.S. They've done so by investing heavily in new planes and by aggressively expanding their world-wide networks, using major airports in cities like Doha and Dubai as hubs to facilitate long-haul traffic between the continents. The Gulf airlines' rapid ascension has irked some U.S. carriers including Delta Air Lines and American Airlines Group Inc. who accuse the trio of receiving state subsidies that give them an unfair advantage over their competitors. The Gulf airlines deny those allegations. Emirates, whose history dates back to 1985, today is the world's largest carrier by international capacity. In the last fiscal year, the airline carried 51.9 million passengers, 8% more than the previous year. Emirates Group, which includes the airline, airport services provider Dnata, a number of luxury hotels and other facilities in Dubai, posted a 50% year-over-year increase in full-year net profit to $2.2 billion. The Abu Dhabi-based rival carrier Etihad Airways last month posted a 41% jump in full-year net profit to $103 million as it also carried more passengers. Write to Nicolas Parasie at nicolas.parasie@wsj.com Credit: By Nicolas Parasie
Subject: Airlines; Airline industry; Air travel
Location: United States--US
Company / organization: Name: Dnata; NAICS: 561599; Name: Etihad Airways; NAICS: 481111; Name: Emirates Airline; NAICS: 481111; Name: Qatar Airways; NAICS: 481111; Name: Emirates Group; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787708939
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787708939?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Rise, Supply Outages in Focus; Wildfires continue to cut back Canadian production
Author: Kantchev, Georgi; Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 3.4-million-barrel increase in crude supplies, a 271,000-barrel rise in gasoline stocks and a 1.4-million-barrel decrease in distillate inventories, according to market participants.
Full text: NEW YORK--Oil prices rose Tuesday on expectations that supply outages from Canada to Nigeria would help to alleviate the global glut of crude. Light, sweet crude for June delivery settled up $1.22, or 2.8%, to $44.66 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose $1.89, or 4.3%, to $45.52 a barrel on ICE Futures Europe. Oil-production outages in some regions are helping reduce crude output, boosting expectations that the global glut of crude that has battered prices since mid-2014 could be shrinking. But analysts say that these disruptions are temporary and most of those barrels will come back online soon. In addition, Saudi Arabia's state-owned oil company said Tuesday that it plans to increase its output this year. Analysts and traders also expect U.S. inventory data set for release Wednesday to show that domestic crude inventories rose to a record last week. Wildfires in Canada's oil-rich Alberta province have removed about 1.6 million barrels a day of production, or more than 1% of global supply, from the market, according to consulting firm Energy Aspects. The extent and duration of the outages remains uncertain. Canada is a major exporter of oil to the U.S. "The market is trying to assess the damage," said Phil Flynn, analyst at Price Futures Group in Chicago. "It's definitely a supportive factor." The outages in Canada added to oil-output disruptions around the globe. "The wildfires in Alberta, rising tensions and further disruptions to crude exports in Libya, and a new outage in Nigeria amid increasing violence have definitely added some bullish pressure to prices," said Michael Wittner, oil analyst at SocieteGenerale, in a note. But global crude inventories continue to hover near record highs, with U.S. stockpiles at the highest level in more than 80 years. Analysts and traders surveyed by The Wall Street Journal expect the Energy Information Administration to report Wednesday that crude supplies rose by 400,000 barrels last week, while stockpiles of refined products, including gasoline, fell. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 3.4-million-barrel increase in crude supplies, a 271,000-barrel rise in gasoline stocks and a 1.4-million-barrel decrease in distillate inventories, according to market participants. The chief executive of Saudi Arabia's state-owned oil company said Tuesday that the country is likely to increase its production this year to meet rising demand. "We're seeing a global increase in demand," said Amin Nasser, the chief executive of Saudi Arabian Oil Co., known as Saudi Aramco, at a press briefing at the company's headquarters. "We are looking at the current market status that, even though challenging, is an excellent opportunity for growth." The CEO's remarks come at a time of great change for Saudi Arabia's oil policy. A new oil minister, Khalid al-Falih, was recently named to replace long-serving predecessor Ali al-Naimi amid a plan to move the kingdom's economy away from its dependence on oil. Saudi Arabia's call for higher demand was echoed by the EIA, which on Tuesday raised its forecast for global consumption this year. However, the EIA also raised its forecast for U.S. oil production in 2017 due to a higher price outlook. Continued robust U.S. production could keep global prices subdued. Gasoline futures settled up 4.3 cents, or 3%, at $1.4857 a gallon. Diesel futures rose 5.12 cents, or 4%, to $1.3375 a gallon. Bill Spindle and Summer Said contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com and Nicole Friedman at nicole.friedman@wsj.com Credit: By Georgi Kantchev and Nicole Friedman
Subject: Inventory; Futures; Petroleum production; Price increases; Supply & demand
Location: United States--US Canada Nigeria Saudi Arabia
People: Naimi, Ali I
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787724457
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787724457?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Chaparral Energy Files for Bankruptcy Protection; Oil and gas driller negotiating terms of debt-for-equity swap with lenders and bondholders
Author: Fitzgerald, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract:
The Oklahoma City-based oil and gas driller filed for chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., as it works to negotiate the terms of a debt-for-equity swap with its lenders and bondholders that will slash $1.2 billion in debt off its books.
Full text: Oil and gas company Chaparral Energy Inc. filed for chapter 11 bankruptcy protection Monday, the latest victim of low oil prices that continue to devastate the industry. The Oklahoma City-based oil and gas driller filed for chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., as it works to negotiate the terms of a debt-for-equity swap with its lenders and bondholders that will slash $1.2 billion in debt off its books. Chief Executive Mark Fischer said Monday the balance-sheet restructuring will position Chaparral to "weather this down environment." Founded in 1988, privately held Chaparral's biggest shareholder, with a 36.18% stake, is a fund managed by private-equity firm CCMP Capital Advisors. Other major shareholders include Mr. Fischer, whose Fischer Investments owns a 24.5% stake in the company, an Ontario pension fund and Altoma Energy GP, according to court papers. The company intends to continue operating without interruption throughout the restructuring and is seeking court approval to continue paying its employee and royalties to mineral owners Chaparral skipped a March interest payment to bondholders and said it would default on the bonds, and thus all $1.6 billion of its debt, at the expiration of a 30-day grace period. Chaparral joins dozens of other oil and gas exploration companies that have filed for bankruptcy over the past year. Sixty-seven oil and gas exploration and production companies filed bankruptcy proceedings last year, according to consulting firm Gavin/Solmonese LLC. And dozens more have filed for court protection this year. Although benchmark U.S. oil prices have recently rebounded to more than $40 a barrel since hitting a 13-year low in February, they're still well below the $100 per barrel producers were getting as recently as the summer of 2014. Latham & Watkins LLP is handling Chaparral's bankruptcy case, and the company has hired Evercore as its financial adviser. Credit: By Patrick Fitzgerald
Subject: Bankruptcy reorganization; Bankruptcy; Litigation; Energy economics; Debt restructuring
Location: Oklahoma
Company / organization: Name: Latham & Watkins; NAICS: 541110; Name: Chaparral Energy Inc; NAICS: 211112; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787749084
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787749084?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Gold Loses Some of Its Allure; Investors swing into a rallying stock market, as oil prices rise
Author: Cherney, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract:
Gold prices settled lower in U.S. trading on Tuesday, as investors sought out riskier assets amid a stock-market rally and an increase in oil prices.
Full text: Gold prices settled lower in U.S. trading on Tuesday, as investors sought out riskier assets amid a stock-market rally and an increase in oil prices. Gold futures for June delivery, the most actively traded contract on Tuesday, settled about 0.1% lower at $1,264.80 a troy ounce on the Comex division of the New York Mercantile Exchange. The drop comes after gold shed about 2% in price on Monday, its biggest one-day loss in nearly three months, as the dollar gained strength. Despite the recent losses, gold is still up some 19% year to date, according to FactSet. Investors piled into gold earlier in the year amid global economic uncertainty and a weaker dollar, which makes gold less expensive to buy for holders of other currencies. Expectations that the Federal Reserve could hold off raising benchmark interest rates have also supported gold, since higher rates tend to strengthen the dollar. Comments from some Fed officials in recent days, however, have led investors to believe that a rate increase at their June policy meeting is still a possibility. "The market seems to be stabilizing a little bit, but the emphasis is still slightly lower," said James Steel, chief precious-metals analyst at HSBC Securities (USA) Inc. "The equity rally, I think, denotes greater risk-on appetite, and that is also weighing on the market." The S&P 500 stock index was recently up about 1.1%, driven higher by a rebound in oil prices and a rally in bank shares. Gold is considered a haven asset and often moves in the opposite direction of riskier assets such as stocks. Looking ahead, Mr. Steel cautioned that gold could fall further in the near term, saying in a research note late Monday that physical demand in India was "sluggish at best" and demand in China was uncertain. Prices could go as low as $1,220 a troy ounce in the near term and possibly lower if the dollar continues to rally, the note said. Write to Mike Cherney at mike.cherney@wsj.com Credit: By Mike Cherney
Subject: Gold markets; Interest rates; Prices
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787800932
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787800932?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Canada Oil Sands Operators to Resume Production in 'Coming Days and Weeks'; Alberta Premier Rachel Notley made comments after meeting with energy executives and discussing steps needed for oil production to resume
Author: Cherney, Elena; George-Cosh, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract:
Earlier Coverage * Fire-Ravaged Canadian Town Sits Silent After Mass Evacuations While the discussion Tuesday focused on the timing of resuming operations, they came after Imperial Oil Ltd., Exxon Mobil Corp.'s Canadian unit, said late Monday that it completed a controlled shutdown of its Kearl oil-sands mine, which produces around 194,000 barrels a day and is about 40 miles north of the town of Fort McMurray, hub of the oil sands.
Full text: Alberta Premier Rachel Notley said she expects oil-sands companies that suspended output of crude oil by up to one million barrels a day due to wildfires that ravaged the Fort McMurray area to resume production "in the coming days and weeks." Ms. Notley made the comments after meeting with energy executives Tuesday and discussing the steps that need to be taken for production to be resumed, including ensuring that infrastructure such as pipelines and electricity is operational, and that there is housing and medical care for workers. Cooler temperatures and firefighter relief efforts have helped slow the spread of the Alberta wildfires, but production remains affected due to staff evacuations and logistical hurdles such as pipeline outages. Royal Dutch Shell PLC's Canadian unit said Tuesday that it was able to restart production at its Albian mine, which it suspended on May 3, marking the first major producer to resume operations since the fire. The company said it would rely on fly-in, fly-out staff to operate the mine. Shell's oil sands production capacity is 255,000 barrels a day. The decline in output reached at least 839,000 barrels per day, or close to one-third of Canada's overall daily production, before Shell said it had restarted Albian. There was no damage to oil sands facilities north of Fort McMurray, Ms. Notley said. Companies have said they cut or halted production to evacuate workers as a precaution and to cope with supply disruptions or smoke that interfered with operations. Steve Williams, the chief executive of Suncor, said his "primary focus is to work with our pipeline companies and our power companies" to make sure the infrastructure is intact. The statements from Ms. Notley, Mr. Williams and other industry leaders at a press conference Tuesday were the first effort to put forward a timeline for resuming operations of affected companies. On Monday, Ms. Notley toured the Fort McMurray area to assess the damage from what she described as an "ocean of fire" that surrounded the area. While around 2,400 homes and buildings were destroyed by the fires, about 90% of buildings in Fort McMurray, including schools and a hospital, remain intact, officials said Monday. The loss of oil-sands output , a key engine of the Canadian economy is expected to dampen the country's economic growth in the second quarter, and worsen a downturn from low oil prices that already has led to large job cuts and lost production. Earlier Coverage * Fire-Ravaged Canadian Town Sits Silent After Mass Evacuations While the discussion Tuesday focused on the timing of resuming operations, they came after Imperial Oil Ltd., Exxon Mobil Corp.'s Canadian unit, said late Monday that it completed a controlled shutdown of its Kearl oil-sands mine, which produces around 194,000 barrels a day and is about 40 miles north of the town of Fort McMurray, hub of the oil sands. Canadian Prime Minister Justin Trudeau is expected to visit Fort McMurray on Friday to assess the fire's damage and meet with local leaders, he said during a parliamentary debate on Tuesday. The fires continue to move eastward from Fort McMurray, but growth appears to be slowing as cooler temperatures, lighter winds and some rain helped slow the spread, said Chad Morrison, Alberta's manager of wildfire prevention in a phone interview. The fires, however, are now estimated to cover close to 570,000 acres and is nearly 10 miles from the province's border with Saskatchewan , he added. "It's slowing down a lot because we've had a bit of change in weather but also, our firefighters have had a chance to anchor themselves and dig in," Mr. Morrison said. "They're really starting to chase this [fire] down." There are more than 700 firefighters battling blazes in and around Fort McMurray, along with 20 helicopters and 15 air tankers, provincial officials said. Write to Elena Cherney at elena.cherney@wsj.com and David George-Cosh at david.george-cosh@wsj.com Credit: By Elena Cherney and David George-Cosh
Subject: Oil sands; Production capacity; Forest & brush fires
Location: Canada
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787808447
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787808447?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission .
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Bust Gives Billionaire Deal-Maker Buyer's Remorse; Energy Transfer Equity's Kelcy Warren wants to restructure or escape the biggest deal of his life, but seller Williams Cos. won't let go
Author: Hoffman, Liz; Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract:
Kelcy Warren became a billionaire oil man by making deal after deal, including purchases of thousands of miles of pipelines after Enron Corp. collapsed. Recent examples include Pfizer Inc.'s proposed $150 billion takeover of fellow drugmaker Allergan PLC and the $35 billion merger of oil-field services companies Halliburton Inc. and Baker Hughes Inc., which crumbled under pressure from U.S. regulators.
Full text: Kelcy Warren became a billionaire oil man by making deal after deal, including purchases of thousands of miles of pipelines after Enron Corp. collapsed. Now he is suffering from a severe case of buyer's remorse. As low oil prices spread pain throughout the energy industry, Energy Transfer Equity LP, the Dallas company where Mr. Warren is chairman, is scrambling to restructure or escape a $33 billion agreement announced just seven months ago to acquire Williams Cos., based in Tulsa, Okla. The deal would create a 100,000-mile network of pipelines. Mr. Warren, 60 years old, has overseen a series of moves that could torpedo the biggest acquisition of his life, such as an unusual convertible preferred share issue that would dilute Williams shareholders and increase his own stake in the combined company. When Williams Chairman Frank MacInnis called in February to complain, Mr. Warren responded curtly, according to Mr. MacInnis. "No one was going to tell him how to run his company," Mr. MacInnis said in the unredacted version of a court filing reviewed by The Wall Street Journal. The comment is crossed out of a publicly available copy of the filing. Energy Transfer disputes the comment but says the two men have talked a number of times about what would be in the best interest of shareholders. The company says Mr. Warren isn't trying to kill the deal but is emphatic that it needs to be restructured. The deal, one of the largest announced in 2015, is now in danger of becoming one of the highest-profile corporate casualties of the oil bust. After Messrs. Warren and MacInnis announced the agreement on Sept. 28, oil prices fell about 40%, though they have since rebounded. The share prices of both companies are still down by roughly half. The tumult also cost Energy Transfer's chief financial officer his job. The mess shows how vulnerable many deals are to souring financial markets. Deals touted as mutually beneficial when announced can quickly turn better for one side than the other. The same thing happened when credit dried up in the financial crisis and droves of buyers scrambled to get out of deals. So far this year, about $378 billion in U.S. mergers and acquisitions have been abandoned, more than 40% higher than in all of 2015, according to Dealogic. This year's broken-deal total will be a record even if no more deals fall apart. Recent examples include Pfizer Inc.'s proposed $150 billion takeover of fellow drugmaker Allergan PLC and the $35 billion merger of oil-field services companies Halliburton Inc. and Baker Hughes Inc., which crumbled under pressure from U.S. regulators. Honeywell International Inc. and Canadian Pacific Railway Ltd. walked away from reluctant takeover targets. Williams has filed lawsuits against Energy Transfer and Mr. Warren over the share issuance, alleging that it cheats Williams shareholders. After initially resisting the deal, Williams now is considering asking a judge to force Energy Transfer to complete the takeover, say people familiar with the matter. Williams says a failed deal would cost its shareholders $10 billion in lost value. Mr. Warren has long kept a tight grip on his sprawling pipeline empire, launched two decades ago. In addition to Energy Transfer, he essentially controls three other publicly traded companies stitched together so complicatedly that some analysts decline to follow them, they say. He also is one of the country's richest men, with a net worth estimated at $7 billion by Forbes. Mr. Warren owns a private island in Honduras and an 8,000-acre property near Cherokee, Texas, that was once an exotic-animal ranch and is still home to roving zebras and buffalo. His 23,000-square-foot Dallas mansion, bought for $30 million in 2009, includes a bowling alley and a baseball diamond that features a scoreboard with "Warren" as one of the teams. He is an avid music fan and owns an independent recording studio that produced in 2014 a Jackson Browne tribute album with cover songs by musicians such as Bonnie Raitt and Don Henley. Mr. Warren has boasted of seeing opportunity in downturns. He launched Energy Transfer in the wake of Enron's demise and then expanded. In 2012, another company he runs, Energy Transfer Partners, agreed to buy Sunoco Inc. for $5.3 billion while Sunoco was in the middle of a complex restructuring. The $5.7 billion takeover of pipeline company Southern Union Co., also in 2012, came after a hostile bidding war. In 2013, he hired Jamie Welch, a longtime energy investment banker at Credit Suisse Group AG who shared Mr. Warren's hearty appetite for deals. The two men saw an opening in the oil rout that started in 2014, which Mr. Welch described as "a once-in-a-lifetime opportunity." During a brief uptick in oil prices early last year, Mr. Warren told analysts: "This is going to sound odd to you, almost sadistic, but I was disappointed to see a rebound in crude prices...I was excited to see who might be more vulnerable if we saw this market continue a downward trend." Energy Transfer set its sights on Williams and its crown jewel: the 10,000-mile Transco gas pipeline. But Williams stiff-armed Energy Transfer for months, according to securities filings. When Energy Transfer made an all-stock offer in June then valued at $48 billion, Williams rejected it as too cheap and plowed ahead with plans to absorb an affiliate. By the fall, Williams's outlook had worsened. In addition to sapping pipeline demand, oil's slide had hurt Williams's gas-processing business, which is especially vulnerable to price swings. A big customer, Chesapeake Energy Corp., looked increasingly troubled, too. At a meeting of Williams's board of directors in Tulsa in September, the company's advisers said investors were losing patience, according to people familiar with the matter. Hopes briefly flickered for a white-knight transaction with Warren Buffett-backed MidAmerican Energy Co., which expressed last-minute interest, but talks went nowhere, some of the people say. Energy Transfer kept pushing for a deal, but the Williams board was divided seven to six against it. With tensions running high, the group took a break for dinner. Unable to find a private dining room big enough to accommodate them, they split into two groups, one "for" and the other "against," people familiar with the matter say. When the meeting reconvened in the morning, two directors had changed their minds. The deal was approved by an 8-5 vote. Energy Transfer shareholders, who had bid up the stock price when the offer first surfaced, were unimpressed with the details of the takeover announcement. Energy Transfer shares fell 13% in one day. Early signs that regret was setting in came when Mr. Welch, Energy Transfer's finance chief, painted the deal unfavorably in conversations with some Williams shareholders in January. He even suggested that they consider voting against it, these people say. The merger contract is written with unusually tight provisions on how Energy Transfer can get out of the deal. Williams shareholders can vote it down. Word of Mr. Welch's efforts, which were earlier reported by the New York Times, filtered back to Williams. Integration meetings were postponed and progress slowed, people familiar with the matter say. Energy Transfer's public statements about the deal got noticeably cooler. In March, the company slashed its estimate of annual cost savings at the combined companies by more than 90%, said it would suspend cash distributions for at least two years and warned that a credit-rating downgrade was possible because of the combined companies' heavy debt load. Energy Transfer also backed away from its promise to keep a major presence in Williams's hometown of Tulsa after the deal is completed. Last month, Energy Transfer said its lawyers couldn't guarantee the transaction would be tax-free to Williams investors, a condition of the merger's completion. Williams disputes Energy Transfer's legal position and says it is an attempt by Energy Transfer to wriggle out of the deal. On an earnings call last week, Mr. Warren was dour about the takeover. "Absent a substantial restructuring of this transaction, which Energy Transfer has been very willing and actually desiring to do--absent that, we don't have a deal," he said. Mr. Warren declined to comment for this article. One big sticking point is the $6 billion cash portion of the deal, or $8 a share. Energy Transfer and some analysts are worried that the cash payout would saddle the combined company with too much debt. "Kelcy is firing every bullet he has," says Benjamin Michaud, an analyst at asset manager H.M. Payson & Co., which owns $10 million of Williams shares and supports the takeover. "But from the standpoint of a Williams shareholder, $8 [a share] is very significant." Some Williams shareholders say there is so much acrimony between the two companies that it is hard to imagine them getting along if the deal goes through. "There's got to be a lot of bad feelings on both sides of the aisle," says Jay Rhame, a portfolio manager at Reaves Asset Management. Tulsa Mayor Dewey Bartlett Jr. says that he sees nothing good about the proposed takeover and that he recently told Mr. MacInnis that in a meeting in New York. Mr. MacInnis declined to comment for this article. The biggest flashpoint is the convertible-share issuance. In March, Energy Transfer insiders, including Mr. Warren, President John McReynolds and two directors, swapped their existing shares for special units, which would forgo cash distributions over the next nine quarters. Those units are convertible into regular shares at a discount to the market price, giving their holders a bigger stake than they started with. Energy Transfer has said the move would save $518 million to help pay down debt. The company says it wanted to offer the shares to all its investors, but Williams withheld its consent. Williams says it opposed the move because it would hurt Williams shareholders. In April, Energy Transfer said it intended to suspend cash distributions after the merger, meaning the insiders will have given up nothing but still stand to receive more equity when the units are converted in 2018. People familiar with the matter say Mr. Welch disagreed about how far Energy Transfer could go to try to get out of the takeover and balked at the convertible-share issuance. The finance chief told Mr. Warren the share issuance would damage Energy Transfer's reputation on Wall Street. He also told his boss that he wouldn't publicly defend the move, these people say. That was the last straw in a relationship that already had become troubled. The cash portion of the deal terms was Mr. Welch's idea, according to people familiar with the matter. He had argued that by including more cash, Energy Transfer could issue less stock and keep more of the upside of the combined company. But as the industry's outlook worsened and investors grew concerned about the combined company's debt load, what seemed like a win for Energy Transfer became a liability. Mr. Warren ordered Mr. Welch's firing, according to people familiar with the matter. The company announced Feb. 5 that he had been replaced. Mr. Welch has sued Energy Transfer for compensation he says he is owed by the company. Mr. Welch has said his termination was "motivated by an agenda unrelated" to his performance as chief financial officer. Mr. Warren told analysts that "the decision was made by me that we needed to make a move, and we did." Last month, Williams filed one lawsuit in Delaware seeking to undo the convertible preferred share issue and another in Texas alleging that Mr. Warren interfered with the deal. Energy Transfer responded with a countersuit and says Williams breached the merger agreement by refusing to give its consent for the shares to be offered to all investors. Unless the companies reach a surprise settlement, the deal's fate will likely be decided by a judge in Delaware. A court hearing is scheduled for mid-June. Credit: By Liz Hoffman and Alison Sider
Subject: Equity stake; Energy industry; Pipelines
Company / organization: Name: Allergan PLC; NAICS: 339113, 325412; Name: Williams Cos Inc; NAICS: 486910, 517110, 523130, 325312, 211111; Name: Energy Transfer Equity LP; NAICS: 486210; Name: Honeywell International Inc; NAICS: 334511, 334512, 334513, 335999, 332911, 334290; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Pfizer Inc; NAICS: 339113, 325412; Name: Enron Corp; NAICS: 324110, 211111, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787823490
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787823490?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Asian Morning Briefing: Stocks Climb as Oil Prices Bounce Back
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract: None available.
Full text: MARKETS AT A GLANCE (Data as of approximately 5 p.m. ET) LAST CHANGE % CHG DJIA 17928.35 222.44 1.26% Nasdaq 4809.88 59.67 1.26% S&P 500 2084.39 25.7 1.25% Japan: Nikkei 225 16565.19 349.16 2.15% Hang Seng 20242.68 85.87 0.43% Shanghai Composite 2832.59 0.48 0.02% S&P BSE Sensex 25772.53 83.67 0.33% Australia: S&P/ASX 5342.8 22.1 0.42% UK: FTSE 100 6156.65 41.84 0.68% PRICE CHG YIELD U.S. 2 Year -1/32 0.722 U.S. 5 Year -1/32 1.2 U.S. 10 Year -2/32 1.752 Australia 10 Year 5/32 2.315 China 10 Year 2/32 2.909 India 10 Year 0/32 7.427 Japan 10 Year -3/32 -0.097 German 10 Year -1/32 0.131 LAST(MID) CHANGE Australia $ (AUD/USD) 0.7365 0.0049 Yen (USD/JPY) 109.29 0.95 S. Korean Won (USD/KRW) 1171.18 -4.39 Chinese Yuan (USD/CNY) 6.5178 0.0009 Euro (EUR/USD) 1.1372 -0.0013 WSJ Dollar Index 86.63 0.05 LAST CHANGE % CHG Crude Oil 44.67 1.23 2.83% Brent Crude 45.6 1.97 4.52% Gold 1268.1 1.5 0.12% SNAPSHOT: A broad rally bolstered by rebounding oil prices Tuesday drove major U.S. indexes to their biggest gains in weeks. Gold prices settled lower in U.S. trading as investors sought out riskier assets. The dollar rose against the yen after Japan's finance ministry warned that it was ready to intervene if the country's currency continued to strengthen. U.S. government bonds were little changed. OPENING CALL: The Chinese market has some demand potential to mop up global natural-gas volumes, but panelists at the Flame gas conference in Amsterdam displayed some skepticism about the extent of this. "We have to recognize that there are a lot of uncertainties with the China gas market," says Xianfang Ren, China market fundamentals manager at BG Group. Economic growth in slowing in China, which is also cooling expansion in the gas market. This will likely continue for the next decade, she says. And this demand will have to come at the expense of coal, equivalent to up to 400 million tons worth, she adds. EQUITIES: A broad rally bolstered by rebounding oil prices drove major U.S. indexes to their biggest gains in weeks. Stock moves have been relatively small in the U.S. recently, after markets fell sharply and recovered earlier this year. Major indexes last notched a daily gain of at least 1% in mid-April. All 10 sectors of the S&P 500 rose Tuesday, with gains in energy and financial stocks outpacing the broader market. The Dow Jones Industrial Average gained 222 points, or 1.3%, to 17928. The Nasdaq Composite and S&P 500 each rose 1.3%. Assets investors consider havens such as gold and U.S. government debt were steady, a sign many weren't convinced that the rally will last, traders and analysts said. "You have a very thin market without a lot of conviction," said Rob Bernstone, managing director of equity trading at Credit Suisse. Trading volume was relatively light compared with other days when stocks have gained sharply, traders said. Investors are struggling to reconcile a recent rebound in stock prices with a lackluster earnings season and concerns about the health of the global economy. "I see OK earnings and OK valuations, but nothing in a world of uncertainty that's making investors want to pay up for stocks," said David Lafferty, chief market strategist at Natixis Global Asset Management. Goldman Sachs rose 2.5%, adding about 27 points to the Dow industrials. J.P. Morgan Chase gained 1.4%. Shares in Asia reversed earlier losses to end mostly higher on Tuesday, led by a surge in Japanese stocks after officials warned that the government could intervene against a sharp rise in the yen. FOREX: The dollar rose against the yen Tuesday, after Japan's finance ministry warned that it was ready to intervene if the country's currency continued to strengthen. The dollar was recently up 0.9% at ¥109.27. The Wall Street Journal Dollar Index, which measures the buck against a basket of 16 currencies, was up 0.1% at 86.62. Japanese Finance Minister Taro Aso said Monday he was "prepared to undertake intervention" in the foreign exchange market if the yen rose further, the latest official to warn that the country won't tolerate an excessively strong currency. At the same time, Federal Reserve officials have their stepped up hawkish rhetoric in recent days, helping the dollar move higher. On Friday, St. Louis Fed President James Bullard warned that the very slow pace of U.S. rate increases seen by financial markets is likely at odds with what the central bank could deliver. Higher rates are a boon to the dollar, as they make the currency more attractive to yield-seeking investors. The recent comments show "there could be a higher risk of a rate (increase) in the months ahead than the recent tone of U.S. economic data alone may be suggesting," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, in a note to clients. The dollar fell against the currencies of commodity producers, as oil prices rose. The greenback was recently down 1.2% against the Brazilian real at 3.4750. It gave up 1.1% against the Mexican peso, to 17.98. BONDS: U.S. government bonds were little changed Tuesday as solid demand on a three-year note auction offset higher stock and oil prices. The resilience of the haven bond market suggests many investors remain cautious in chasing riskier markets amid a muddy global economic growth and inflation outlook. The $24 billion sale of three-year Treasury notes generated the strongest demand since January. The yield on the benchmark 10-year Treasury note was 1.760%, compared with 1.759% Monday. Bond yields and prices move inversely to each other. Both the S&P 500 stock index and U.S. crude oil futures rose by more than 1% Tuesday afternoon. U.S. Treasury bond yields remain stubbornly low despite a sharp rebound in stock and oil prices since mid-February. That has confounded many bond traders and made investors hesitant to place large negative wagers on bond prices. On the other hand, some money managers say higher bond yields present a buying opportunity as they don't expect a large increase in bond yields without robust economic growth or a pick-up in inflation. The new three-year notes were offered at a slim yield of 0.875%. It attracted 61.5% indirect bidding, a gauge of demand from foreign investors. That was the latest sign of solid buying interest from foreign investors who are grappling with a large number of government debt in Japan and the eurozone yielding below zero. In that light, U.S. bonds remain an attractive bargain despite low yields. The auction results also suggest that many investors expect the Federal Reserve to be very slow in raising interest rates, a factor that would reduce the risk of a large increase in yields. "There is a broad sense of doubt that the Fed is going to [raise rates] again in 2016," said Thomas Simons, vice president and money-market economist in the Fixed Income Group at Jefferies. COMMODITIES: Oil prices rose on expectations that supply outages from Canada to Nigeria would help to alleviate the global glut of crude. Light, sweet crude for June delivery settled up $1.22, or 2.8%, to $44.66 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose $1.89, or 4.3%, to $45.52 a barrel on ICE Futures Europe. Oil-production outages in some regions are helping reduce crude output, boosting expectations that the global glut of crude that has battered prices since mid-2014 could be shrinking. But analysts say that these disruptions are temporary and most of those barrels will come back online soon. In addition, Saudi Arabia's state-owned oil company said Tuesday that it plans to increase its output this year. Analysts and traders also expect U.S. inventory data set for release Wednesday to show that domestic crude inventories rose to a new record last week. Wildfires in Canada's oil-rich Alberta province have removed about 1.6 million barrels a day of production, or more than 1% of global supply, from the market, according to consulting firm Energy Aspects. The extent and duration of the outages remains uncertain. Canada is a major exporter of oil to the U.S. "The market is trying to assess the damage," said Phil Flynn, analyst at Price Futures Group in Chicago. "It's definitely a supportive factor." Gold prices settled lower in U.S. trading, as investors sought out riskier assets amid a stock-market rally and an increase in oil prices. TODAY'S HEADLINES: Disney Results Boosted by Recent Films Disney's earnings rose a weaker-than-expected 1.7% in the latest quarter. as the popularity of the films "Star Wars" and "Zootopia" were offset by costs related to its new park in Shanghai. Facebook Rebuts Claim It Suppresses Conservative News Facebook denied allegations from former workers who said the social media site suppressed news about conservative issues on its popular "trending" news feature. Electronic Arts Leans on 'Star Wars' and Sports to Power Profit Electronic Arts closed out its fiscal year with better-than-expected revenue and profit, aided by its "Star Wars" and sports franchises. Goldman, Jefferies Put LendingClub Deals on Hold The banks are reviewing events that led to the ousting of LendingClub Chief Executive Renaud Laplanche, which could delay or jeopardize a number of closely watched securitization deals. Wall Street Firms Under Investigation for Treatment of Retail Investors Federal and state authorities are investigating whether Wall Street firms that handle millions of orders annually for retail clients have lived up to their obligation to provide the best possible treatment for those investors. Wal-Mart Sues Visa Over Chip-Enabled Debit Card Transactions Wal-Mart filed a lawsuit against Visa, saying the payments network is preventing the retailing giant from requiring customers to verify their purchases with a personal identification number when they use a chip-enabled debit card. Fed's Williams: Highly Unlikely U.S. Would Go Negative on Rates San Francisco Fed President John Williams said it is highly unlikely the U.S. would need to push interest rates into negative territory to spur economic growth, in an online session with question-and-answer website Quora. Dell Plans $16 Billion Investment-Grade Bond Sale Dell plans to begin marketing around $16 billion of secured bonds this week as part of its acquisition of EMC, a person familiar with the matter said, as the computer maker tries to take advantage of a hot market for highly rated debt. Amazon Launches YouTube-Like Video Service Amazon.com is intensifying its rivalry with Google with a new ad-supported video service that resembles YouTube, letting anyone upload clips. New York Fed, Bangladesh, Swift Join in Effort to Trace Stolen Funds The New York Fed, Bangladesh's central bank and internal financial messaging provider Swift will work together to trace the $81 million still missing from Bangladesh's account at the Fed. RECENT DJ EXCLUSIVES: Wal-Mart Sues Visa Over Chip-Enabled Debit Card Transactions Gap: Being Big Is Out of Fashion -- Heard on the Street Macy's Stock Is Cheap for a Reason -- Ahead of the Tape Oil Bust Gives Billionaire Deal-Maker Buyer's Remorse Goldman, Jefferies Pause Buying LendingClub Loans TODAY'S CALENDAR (Times in GMT, followed by country and event) 2100 NZ RBNZ Financial Stability Report 2245 NZ Mar Accommodation Survey 2300 SKA Apr Economically Active Population Survey, incl Unemployment 2350 JPN Apr International Reserves / Foreign Currency 0030 AUS May Westpac - Melbourne Institute Consumer Sentiment Survey 0100 PHI Mar Merchandise Export Performance 0130 AUS Mar Housing Finance 0400 AUS May Monthly Leading Indicator of Employment 0500 JPN Mar Indexes of Business Conditions - Preliminary Release 0600 GER Mar Manufacturing turnover 0700 THA Bank of Thailand Monetary Policy Committee meeting and decision 0830 UK Mar UK monthly industrial production figures 0900 GER Q2 Ifo World Economic Climate 1000 FRA Mar OECD Composite Leading Indicators 1100 US 05/06 MBA Weekly Mortgage Applications Survey 1315 UK George Osborne questioned by MPs on EU membership 1400 UK Apr NIESR Monthly GDP Estimates 1430 US 05/06 EIA Weekly Petroleum Status Report 1800 US Apr Monthly Treasury Statement of Receipts & Outlays of the U.S. Govt 2301 UK Apr RICS Residential Market Survey 2350 JPN Apr Provisional Trade Statistics for 1st 20 days of Month 2350 JPN Apr International Transactions in Securities 2350 JPN Mar Balance of Payments 2350 JPN Apr Bank Lending 2350 JPN Bank of Japan's Summary of Opinions
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787847976
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787847976?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The Saudi Reform Opening; Riyadh tries to reduce the size of the state and break its oil addiction.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 May 2016: n/a.
Abstract:
MbS also wants to boost the work-force participation rate of women, cut unemployment from the current rate of 11.6%, privatize state industries and gradually eliminate utility subsidies for citizens who can afford market rates.
Full text: Saudi Arabia has long been one of the world's most hidebound regimes, but that appears to be changing as King Salman tries to address the challenges of lower oil prices, changing demographics and Iran's bid for regional hegemony. The stakes are high for the Kingdom--and the West. One sign of change was the appointment this weekend of Khalid al-Falih, a 55-year-old technocrat, to replace 81-year old Oil Minister Ali al-Naimi, who had held the position since 1995. Mr. al-Falih will likely maintain Riyadh's policy of maximizing market share to squeeze geopolitical rival Iran and U.S. shale producers at the margins. The real shift concerns domestic reform. Mr. al-Falih is a close ally of Deputy Crown Prince Mohammed bin Salman, widely known as MbS. The 30-year-old Prince is the force behind a wider push to break the Kingdom's "addiction to oil," as he put it. As the King's favorite son, MbS enjoys a broad mandate to reorder the Saudi economy. His Vision 2030 plan promises to increase the private share of gross domestic product to 65% by 2030, up from 40%. MbS also wants to boost the work-force participation rate of women, cut unemployment from the current rate of 11.6%, privatize state industries and gradually eliminate utility subsidies for citizens who can afford market rates. The reforms are remarkable given that Riyadh runs one of the world's largest welfare states, in which Saudis trade political rights for cradle-to-grave benefits. Saudis have become accustomed to high-paying government posts while foreign workers do lower-paying jobs in private industry, especially services. That's not a sustainable model when oil sales account for 70% of government revenue, and idle young men living on the dole are attracted to the lure of jihad. MbS has made important headway in recent months, stacking important government offices with allies like Mr. al-Falih. Now attention will shift to the crucial but unknown specifics. The next step for the reformers is to lower barriers to investment, business-creation, and hiring and firing. It takes too many steps--21--to start a firm in Saudi Arabia, with sign offs often required from multiple ministries, according to the McKinsey Global Institute, which last year conducted a detailed study of the economy. There are too many licensing requirements, and entire industries remain off limits to foreign investors. Bankruptcy, arbitration and collections processes are onerous. Dismissing native Saudi workers is extremely difficult. All of this will be politically challenging. Reform moments are often times of political peril in authoritarian regimes as long-dormant forces of change emerge and become difficult to contain. The mere removal of utility subsidies has triggered popular uprisings elsewhere in the region. To boost female employment, the Kingdom must ease regulations mandating entirely separate facilities. The ban on women driving makes it difficult for many women to get to work. The government would need to negotiate these and other questions with the powerful Wahhabi religious establishment. But as the Deputy Crown Prince recognizes, the status quo may carry greater political risks. The Saudis need a more diverse and dynamic economy to adapt to lower oil prices, resist Iranian hegemony, and meet the needs of its young people. The U.S. interest lies in a moderate and prosperous Sunni Arab world, so it should wish the reformers well and do what it can to help.
Subject: Young adults; Subsidies; Politics; Economic growth; Gross Domestic Product--GDP; Hegemony
Location: Riyadh Saudi Arabia Iran United States--US Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia Naimi, Ali I
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 10, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787853093
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787853093?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Crude Oil Falls in Asia; Trading Is Choppy; July Brent crude fell $0.19 to $45.33 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 May 2016: n/a.
Abstract:
On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $44.45 a barrel at 0240 GMT, down $0.21 in the Globex electronic session.
Full text: Crude-oil prices fell in early Asia trade Wednesday as investors weighed reports of a growing surplus from Saudi Arabia and supply disruptions in Canada and Africa. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $44.45 a barrel at 0240 GMT, down $0.21 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.19 to $45.33 a barrel. Overnight, prices rose as supply outages in Canada fed hope that the supply glut, which has depressed prices since the middle of 2014, is slowly abating. Wildfires in the oil-rich province of Alberta have resulted in a loss of about 1.6 million barrels a day, according to Energy Aspects. Political strife in Libya and a series of attacks on Nigerian oil facilities are also hurting the countries' crude exports. But analysts say that these disruptions are likely to be short lived and the market remains oversupplied, underpinned by ballooning output by major producers such as Saudi Arabia and Iran, who are locked in a heated battle for market share. On Tuesday, Amin Nasser, the chief executive of Saudi Arabian Oil Co., said the country plans to increase crude production this year to satisfy rising demand. "We're seeing a global increase in demand," said Mr. Nasser, adding that Saudi Aramco sees the current market as challenging but an "excellent opportunity for growth." Iran's pledge to accelerate output and exports is also hindering global oil prices from rising further. In an interview with The Wall Street Journal, Mohsen Ghamsari, director of international affairs at the National Iranian Oil Co., said Iran was able to regain its lost crude exports within four months of international sanctions being lifted. The country plans to keep its oil exports at two million barrels a day, on average, this year. Increased output from the Middle East comes at a time when U.S. crude inventory is already at an eight-decade high, despite signs of a steady production decline in recent months. An analyst survey by the Journal estimates a 400,000-barrel increase in U.S. crude stocks last week. Industry group American Petroleum Institute forecasts an expansion of 3.4 million barrels. Official data by the Energy Information Administration is scheduled to be released later Wednesday. However, bullish analysts are banking on a near-term rally as more energy companies falter on dried-up cash flow. "There were 18 bankruptcies in March and April in North America as creditors began to choke off lending to shale oil producers. The bankruptcies accounted for a combined $8.9 billion in debt," said Gordon Kwan, head of regional oil-and-gas research at Nomura. Adding to the positive sentiment is the EIA's latest increased estimate for global demand. In its outlook report released Tuesday, the agency said it expects global consumption of petroleum and other liquid fuels to increase by 1.4 million barrels a day in 2016 and 1.5 million barrels a day in 2017, growth that is 300,000 barrels a day and 200,000 barrels a day higher, respectively, than forecast figures given last month. "Even with those changes, however, it won't take that much additional [OPEC] output to keep the market in a moderate surplus over the balance of the year," said Tim Evans, a Citi Futures analyst. "For now, a smaller surplus is still a surplus." Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 38 points to $1.4819 a gallon, while June diesel traded at $1.3392, 17 points higher. ICE gasoil for May changed hands at $397.25 a metric ton, up $4.00 from Tuesday's settlement --Benoit Faucon, Bill Spindle and Summer Said contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Exports; Futures; Crude oil prices; Energy industry
Location: Iran Asia Canada Africa Saudi Arabia
Company / organization: Name: National Iranian Oil Co; NAICS: 324110; Name: Saudi Arabian Oil Co; NAICS: 211111; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 11, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787861086
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787861086?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Finance: Saudi Aramco Signals Rise in Oil Output --- CEO cites rising global demand, namely in U.S. and India, for likely bump in production
Author: Spindle, Bill; Said, Summer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 May 2016: C.3.
Abstract:
Saudi Arabia's state-owned oil company is likely to increase production to meet rising demand this year, its chief executive said, as the company begins an expansion that includes a partial initial public offering and new refining capabilities.
Full text: DHAHRAN, Saudi Arabia -- Saudi Arabia's state-owned oil company is likely to increase production to meet rising demand this year, its chief executive said, as the company begins an expansion that includes a partial initial public offering and new refining capabilities. "We're seeing a global increase in demand," Amin Nasser, chief executive of Saudi Arabian Oil Co., known as Saudi Aramco, said at a news briefing Tuesday at company headquarters. "We are meeting that call on us." Saudi Arabia, the world's largest exporter of crude oil, is already pumping at near-record levels of about 10.2 million barrels a day. That output was part of an overall Saudi strategy for dealing with oil prices that collapsed more than 70% from June 2014 to January 2016: Pump flat out and compete with other countries for crude buyers. The country no longer regulates its production levels to keep global supply and demand in balance and stabilize prices. Mr. Nasser's comments suggest the kingdom's oil company isn't changing course. Saudi Arabia's output tends to increase in the summer to deal with rising air-conditioner use when temperatures in the kingdom reach scorching levels, but Mr. Nasser said Aramco would pump more to meet demand elsewhere, particularly in the U.S. and India. Mr. Nasser said Aramco expected demand to rise about 1.2 million barrels a day around the world this year, in line with other analysts' estimates. On Tuesday, Brent crude, the global benchmark, gained 4.3% to $45.52 a barrel, while U.S.-traded oil rose 2.8% to $44.66. The CEO's remarks come in the midst of great change for Saudi Arabia's oil policy. A new oil minister, Khalid al-Falih, was recently named to succeed long-serving predecessor Ali al-Naimi amid a plan to move the kingdom's economy away from its dependence on oil. Saudi Arabia plans a public listing of up to 5% of Aramco in Riyadh and possibly other markets, potentially raising more than $100 billion and opening the company's finances and reserves to more scrutiny. The company would share more information as required for an IPO, but production levels are a "sovereign decision," Mr. Nasser said. The options include a share listing in Saudi Arabia, a dual listing with a foreign market and listings in more than two places, Mr. Nasser said. Saudi officials have previously said New York, London and Hong Kong are potential options. Saudi Aramco, the world's largest oil company by output, is planning to expand as other big energy companies scale back during a period of sharply lower crude prices and a global glut of oil. Royal Dutch Shell PLC, BP PLC and other large independent oil firms have announced spending cutbacks, delayed projects and thousands of layoffs as revenue plummets. In the U.S., the shale-oil boom has added to global supplies, with U.S. levels at their highest in more than 80 years. Recent supply disruptions, most notably in Canada and Nigeria, have helped reduce crude output, but analysts say these are temporary and expect operations to be back online soon. Meanwhile, global crude inventories remain near record highs. Mr. Nasser declined to give an average figure for crude production this year but said the new output would come mostly from expansion of current fields. Mr. Nasser said global oil supplies and demand, which have been out of whack for almost two years, would come into balance around the end of 2016. Credit: By Bill Spindle and Summer Said
Subject: Supply & demand; Petroleum production; Crude oil prices
Location: Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Classification: 8510: Petroleum industry; 9178: Middle East
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: May 11, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787893811
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787893811?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
In Wake of Price Bust, Oil Man Gets Cold Feet --- Energy Transfer's boss lost faith in $33 billion purchase; seller won't let go
Author: Hoffman, Liz; Sider, Alison
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 May 2016: A.1.
Abstract:
Kelcy Warren became a billionaire oil man by making deal after deal, including purchases of thousands of miles of pipelines after Enron Corp. collapsed. Recent examples include Pfizer Inc.'s proposed $150 billion takeover of fellow drugmaker Allergan PLC and the $35 billion merger of oil-field services companies Halliburton Inc. and Baker Hughes Inc., which crumbled under pressure from U.S. regulators.
Full text: Kelcy Warren became a billionaire oil man by making deal after deal, including purchases of thousands of miles of pipelines after Enron Corp. collapsed. Now he is suffering from a severe case of buyer's remorse. As low oil prices spread pain throughout the energy industry, Energy Transfer Equity LP, the Dallas company where Mr. Warren is chairman, is scrambling to restructure or escape a $33 billion agreement announced just seven months ago to acquire Williams Cos., based in Tulsa, Okla. The deal would create a 100,000-mile network of pipelines. Mr. Warren, 60 years old, has overseen a series of moves that could torpedo the biggest acquisition of his life, such as an unusual convertible preferred share issue that would dilute Williams shareholders and increase his own stake in the combined company. When Williams Chairman Frank MacInnis called in February to complain, Mr. Warren responded curtly, according to Mr. MacInnis. "No one was going to tell him how to run his company," Mr. MacInnis said in the unredacted version of a court filing reviewed by The Wall Street Journal. The comment is crossed out of a public copy of the filing. Energy Transfer disputes the comment but says the two men have talked a number of times about what would be in the best interest of shareholders. The company says Mr. Warren isn't trying to kill the deal but is emphatic that it needs to be restructured. The deal, one of the largest announced in 2015, is now in danger of becoming one of the highest-profile corporate casualties of the oil bust. After Messrs. Warren and MacInnis announced the agreement on Sept. 28, oil prices fell about 40%, though they have since rebounded. The share prices of both companies are still down by roughly half. The tumult also cost Energy Transfer's chief financial officer his job. The mess shows how vulnerable many deals are to souring financial markets. Deals touted as mutually beneficial when announced can quickly turn better for one side than the other. The same thing happened when credit dried up in the financial crisis and droves of buyers scrambled to get out of deals. So far this year, about $378 billion in U.S. mergers and acquisitions have been abandoned, more than 40% higher than in all of 2015, according to Dealogic. This year's broken-deal total will be a record even if no more deals fall apart. Recent examples include Pfizer Inc.'s proposed $150 billion takeover of fellow drugmaker Allergan PLC and the $35 billion merger of oil-field services companies Halliburton Inc. and Baker Hughes Inc., which crumbled under pressure from U.S. regulators. Honeywell International Inc. and Canadian Pacific Railway Ltd. walked away from reluctant targets. Williams has filed lawsuits against Energy Transfer and Mr. Warren over the share issuance, alleging that it cheats Williams shareholders. After initially resisting the deal, Williams now is considering asking a judge to force Energy Transfer to complete the takeover, say people familiar with the matter. Williams says a failed deal would cost its shareholders $10 billion in lost value. Mr. Warren has long kept a tight grip on his sprawling pipeline empire, launched two decades ago. In addition to Energy Transfer, he essentially controls three other publicly traded companies stitched together so complicatedly that some analysts decline to follow them, they say. He also is one of the country's richest men, with a net worth estimated at $7 billion by Forbes. Mr. Warren owns a private island in Honduras and an 8,000-acre property near Cherokee, Texas, that was once an exotic-animal ranch and is still home to roving zebras and buffalo. His 23,000-square-foot Dallas mansion, bought for $30 million in 2009, includes a bowling alley and a baseball diamond that features a scoreboard with "Warren" as one of the teams. He is an avid music fan and owns an independent recording studio that produced in 2014 a Jackson Browne tribute album with cover songs by musicians such as Bonnie Raitt and Don Henley. Mr. Warren has boasted of seeing opportunity in downturns. He launched Energy Transfer in the wake of Enron's demise and then expanded. In 2012, another company he runs, Energy Transfer Partners, agreed to buy Sunoco Inc. for $5.3 billion while Sunoco was in the middle of a complex restructuring. The $5.7 billion takeover of pipeline company Southern Union Co., also in 2012, came after a hostile bidding war. In 2013, he hired Jamie Welch, a longtime energy investment banker at Credit Suisse Group AG who shared Mr. Warren's hearty appetite for deals. The two men saw an opening in the oil rout that started in 2014, which Mr. Welch described as "a once-in-a-lifetime opportunity." During a brief uptick in oil prices early last year, Mr. Warren told analysts: "This is going to sound odd to you, almost sadistic, but I was disappointed to see a rebound in crude prices. . .I was excited to see who might be more vulnerable if we saw this market continue a downward trend." Energy Transfer set its sights on Williams and its crown jewel: the 10,000-mile Transco gas pipeline. But Williams stiff-armed Energy Transfer for months, according to securities filings. When Energy Transfer made an all-stock offer in June then valued at $48 billion, Williams rejected it as too cheap and plowed ahead with plans to absorb an affiliate. By the fall, Williams's outlook had worsened. In addition to sapping pipeline demand, oil's slide had hurt Williams's gas-processing business, which is especially vulnerable to price swings. A big customer, Chesapeake Energy Corp., looked increasingly troubled, too. At a meeting of Williams's board of directors in Tulsa in September, the company's advisers said investors were losing patience, according to people familiar with the matter. Hopes briefly flickered for a white-knight transaction with Warren Buffett-backed MidAmerican Energy Co., which expressed last-minute interest, but talks went nowhere, some of the people say. Energy Transfer kept pushing for a deal, but the Williams board was divided seven to six against it. With tensions running high, the group took a break for dinner. Unable to find a private dining room big enough to accommodate them, they split into two groups, one "for" and the other "against," people familiar with the matter say. When the meeting reconvened in the morning, two directors had changed their minds. The deal was approved by an 8-5 vote. Energy Transfer shareholders, who had bid up the stock price when the offer first surfaced, were unimpressed with the details of the takeover announcement. Energy Transfer shares fell 13% in one day. Early signs that regret was setting in came when Mr. Welch, Energy Transfer's finance chief, painted the deal unfavorably in conversations with some Williams shareholders in January. He even suggested that they consider voting against it if they weren't able to persuade Williams's board of directors to revise the deal's terms, these people say. The merger contract is written with unusually tight provisions on how Energy Transfer can get out of the deal. Williams shareholders can vote it down. Word of Mr. Welch's efforts, which were earlier reported by the New York Times, filtered back to Williams. Integration meetings were postponed and progress slowed, people familiar with the matter say. Energy Transfer's public statements about the deal got noticeably cooler. In March, the company slashed its estimate of annual cost savings at the combined companies by more than 90%, said it would suspend cash distributions for at least two years and warned that a credit-rating downgrade was possible because of the combined companies' heavy debt load. Energy Transfer also backed away from its promise to keep a major presence in Williams's hometown of Tulsa after the deal is completed. Last month, Energy Transfer said its lawyers couldn't guarantee the transaction would be tax-free to Williams investors, a condition of the merger's completion. Williams disputes Energy Transfer's legal position and says it is an attempt by Energy Transfer to wriggle out of the deal. On an earnings call last week, Mr. Warren was dour about the takeover. "Absent a substantial restructuring of this transaction, which Energy Transfer has been very willing and actually desiring to do -- absent that, we don't have a deal," he said. Mr. Warren declined to comment for this article. One big sticking point is the $6 billion cash portion of the deal, or $8 a share. Energy Transfer and some analysts are worried that the cash payout would saddle the combined company with too much debt. "Kelcy is firing every bullet he has," says Benjamin Michaud, an analyst at asset manager H.M. Payson & Co., which owns $10 million of Williams shares and supports the takeover. "But from the standpoint of a Williams shareholder, $8 [a share] is very significant." Some Williams shareholders say there is so much acrimony between the two companies that it is hard to imagine them getting along if the deal goes through. "There's got to be a lot of bad feelings on both sides of the aisle," says Jay Rhame, a portfolio manager at Reaves Asset Management. Tulsa Mayor Dewey Bartlett Jr. says that he sees nothing good about the proposed takeover and that he recently told Mr. MacInnis that in a meeting in New York. Mr. MacInnis declined to comment for this article. The biggest flashpoint is the convertible-share issuance. In March, Energy Transfer insiders, including Mr. Warren, President John McReynolds and two directors, swapped their existing shares for special units, which would forgo cash distributions over the next nine quarters. Those units are convertible into regular shares at a discount to the market price, giving their holders a bigger stake than they started with. Energy Transfer has said the move would save $518 million to help pay down debt. The company says it wanted to offer the shares to all its investors, but Williams withheld its consent. Williams says it opposed the move because it would hurt Williams shareholders. In April, Energy Transfer said it intended to suspend cash distributions after the merger, meaning the insiders will have given up nothing but still stand to receive more equity when the units are converted in 2018. People familiar with the matter say Mr. Welch disagreed about how far Energy Transfer could go to try to get out of the takeover and balked at the convertible-share issuance. The finance chief told Mr. Warren the share issuance would damage Energy Transfer's reputation on Wall Street. He also told his boss that he wouldn't publicly defend the move, these people say. That was the last straw in a relationship that already had become troubled. The cash portion of the deal terms was Mr. Welch's idea, according to people familiar with the matter. He had argued that by including more cash, Energy Transfer could issue less stock and keep more of the upside of the combined company. But as the industry's outlook worsened and investors grew concerned about the combined company's debt load, what seemed like a win for Energy Transfer became a liability. Mr. Warren ordered Mr. Welch's firing, according to people familiar with the matter. The company announced Feb. 5 that he had been replaced. Mr. Welch has sued Energy Transfer for compensation he says he is owed by the company. Mr. Welch has said his termination was "motivated by an agenda unrelated" to his performance as finance chief. Mr. Warren told analysts that "the decision was made by me that we needed to make a move, and we did." Last month, Williams filed one lawsuit in Delaware seeking to undo the convertible preferred share issue and another in Texas alleging that Mr. Warren interfered with the deal. Energy Transfer responded with a countersuit and says Williams breached the merger agreement by refusing to give its consent for the shares to be offered to all investors. Unless the companies reach a surprise settlement, the deal's fate will likely be decided by a judge in Delaware. A court hearing is scheduled for mid-June. Credit: By Liz Hoffman and Alison Sider
Subject: Equity stake; Energy industry; Pipelines
People: Warren, Kelcy
Company / organization: Name: Williams Cos Inc; NAICS: 486910, 517110, 523130, 325312, 211111; Name: Energy Transfer Equity LP; NAICS: 48621 0
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: May 11, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787893832
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787893832?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Nymex Crude Settles at New 2016 High; Energy Information Administration says crude-oil stockpiles slipped by 3.4 million barrels in the latest week
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 May 2016: n/a.
Abstract:
Crude inventories fell even though imports and production levels remained relatively steady and refineries processed less crude oil compared with the prior week, the EIA said.
Full text: U.S. oil prices jumped to a new 2016 high Wednesday as weekly inventory data showed a surprise drop in domestic crude stockpiles. Light, sweet crude for June delivery settled up $1.57, or 3.5%, at $46.23 a barrel on the New York Mercantile Exchange, the highest mark since Nov. 4. Brent, the global benchmark, rose $2.08, or 4.6%, to $47.60 a barrel on ICE Futures Europe. Both benchmarks had been down ahead of the weekly inventory report. U.S. crude-oil stockpiles dropped by 3.4 million barrels in the week ended May 6, the Energy Information Administration said Wednesday. Analysts surveyed by The Wall Street Journal had expected a 400,000-barrel increase. U.S. stockpiles of crude oil still stand near the highest level in more than 80 years, evidence of the global glut of crude oil that has weighed on prices since mid-2014. But "the market sentiment has definitely shifted" away from worries about the current oversupply, said Kyle Cooper, analyst at IAF Advisors in Houston. "We'll see if the momentum can continue upward." The U.S. oil benchmark has surged 76% since hitting a 13-year low earlier in the year, buoyed by falling U.S. output and production outages in some parts of the world. But ample inventories have capped price gains, with some investors saying they don't think the current rally can last before global stockpiles of crude oil decline. Crude inventories fell even though imports and production levels remained relatively steady and refineries processed less crude oil compared with the prior week, the EIA said. This type of data mismatch is common and is typically smoothed out in the EIA's monthly data sets, which are considered more reliable. Crude stockpiles typically fall at this time of year as refineries complete seasonal maintenance and process more crude oil into refined products like gasoline. Analysts expect to see a drop in imports in the coming week due to wildfires in Canada that prompted some companies to halt oil-sands production. "We should see pipeline flows drop in the coming two weeks," said Matt Smith, director of commodity research at shipping tracker ClipperData. In another boost to prices, the EIA estimated that U.S. crude production fell slightly last week to 8.8 million barrels a day, the lowest level since September 2014. Supplies of gasoline and distillates, including diesel fuel and heating oil, also fell. Ongoing outages in Nigeria, Canada and elsewhere also supported prices. Shell Petroleum Development Co. of Nigeria this week shut off exports from a major pipeline due to a leak. This is in addition to an offshore production platform and an export terminal in Nigeria that have also been shut this year. Nigeria produced about 1.7 million barrels a day of crude oil in March, the lowest level since 2009, according to the International Energy Agency. In Canada, companies are preparing to restart oil production . More than a million barrels a day have been offline due to the fires in the oil-rich province of Alberta, which has supported prices in recent days. Traders are also concerned about hampered production in Libya due to political unrest. The country's oil production fell by 140,000 barrels a day to 220,000 barrels a day following the blockage of a port last week, said a spokesman for the internationally recognized National Oil Co. in Tripoli. Analysts say that these disruptions are likely to be short lived and the market remains oversupplied, underpinned by ballooning output by major producers such as Saudi Arabia and Iran, which are locked in a heated battle for market share. Gasoline futures rose 9.58 cents, or 6.4%, to $1.5815 a gallon. Diesel futures rose 5.92 cents, or 4.4%, to $1.3967 a gallon. Georgi Kantchev, Miriam Malek and Benoit Faucon contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Crude oil; Inventory; Crude oil prices; Petroleum production; Petroleum refineries
Location: United States--US Canada
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 11, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1787906090
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1787906090?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Pipeline Outage Adds to Nigerian Oil Disruptions; Several output interruptions globally are helping to support crude prices
Author: Kent, Sarah; Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 May 2016: n/a.
Abstract:
LONDON--Royal Dutch Shell PLC on Wednesday said its exports of Nigerian crude oil had been significantly disrupted, adding to a slew of stoppages that have knocked out around 500,000 barrels a day of oil output in the West African country.
Full text: LONDON--Royal Dutch Shell PLC on Wednesday said its exports of Nigerian crude oil had been significantly disrupted, adding to a slew of stoppages that have knocked out around 500,000 barrels a day of oil output in the West African country. It is the latest hit to oil exports across the world, leading to mounting concerns about the global crude supply. A series of output interruptions from Canada to Libya have illustrated how quickly the global glut of oil could be cleared out after nearly two years of weighing on prices. Canadian outages caused by rampant wildfires, supply disruptions caused by political disagreements in Libya and the Nigerian stoppages now add up to 3.5 million barrels of offline oil a day, said Seth Kleinman, a Citigroup analyst. "The growing level of supply disruptions should tighten near-term balances," Mr. Kleinman wrote in a note. Global oil production still outpaces demand by more than 1 million barrels on any given day, weighing down crude prices that fell to their lowest levels in 13 years in 2016. Oil-market experts, including Saudi Arabia, believe supply and demand won't balance more permanently until the end of 2016. Oil prices were up on Wednesday as new data showed U.S. oil stock inventories had been drawn down . Nigeria's oil production looks particularly vulnerable amid an alarming increase in militant attacks on infrastructure in the country's oil-rich south. Though it remains unclear what caused the latest outage, it follows a series of attacks that knocked out a significant volume of production since the start of the year. In an emailed statement, Shell's Nigerian subsidiary said it had declared force majeure as of Tuesday, a move that gives it legal indemnity for being unable to fulfill its export obligations. The company said a leak had closed the Nembe Creek Trunk line which pipes crude through the Niger Delta to Shell's export terminal. The disruption will affect about 200,000 barrels a day of crude exports this month, according to a trader familiar with Nigeria's export program. Shell didn't comment on the cause of the leak or the size of any associated spill. The Anglo-Dutch oil major sold the pipeline to Nigerian energy company Aiteo last year as part of a series of divestments from the restive Niger Delta, and referred further questions on the incident to the African company. Aiteo didn't respond to a request for comment. The incident comes a week after an attack shut down Chevron Corp.'s Okan platform off the Nigerian coast , knocking out 35,000 barrels a day of the company's crude output. Another of Shell's export terminals has been out of action since February, cutting off a further 250,000 barrels a day of the country's oil output. Both attacks were claimed by a group calling itself the Niger Delta Avengers, which says it wants locals to have more control over the region's oil resources and revenues. Nigeria's rich oil fields have a long history of militancy and criminality that frequently force oil companies to shut down production. In the 1990s, protests over oil spills forced Shell out of one part of the Niger Delta, and militant attacks last decade frequently shut down big chunks of the country's output. But large and sophisticated attacks on Nigeria's oil fields seemed to die down in the wake of a 2009 government amnesty for militants. That truce may be coming to an end, with severe implications for Nigeria's oil output. Last month, the International Energy Agency said supply from Nigeria fell to 1.7 million barrels a day in March--its lowest level since the middle of 2009. That was before the latest set of disruptions hit. The Niger Delta Avengers has threatened fresh attacks and said it would target international oil companies. Earlier this week, Shell evacuated nonessential personnel from one of its oil fields off the coast of Nigeria, though it said operations were continuing. Georgi Kantchev contributed to this article. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent and Miriam Malek
Subject: International markets; Supply & demand; Exports; Petroleum production; Militancy
Location: Nigeria Canada Niger Delta Libya
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Chevron Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788027566
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788027566?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Oil, Windfall Taxes and Bad Long-Term Economic Policy; Tax "windfall profits" of oil companies when oil prices are high, but there is a tax-increase symmetry when oil prices are low.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 May 2016: n/a.
Abstract:
Regarding Stephen Moore's "Alaska's Folly: Politicians Contemplate a State Income Tax " (Cross Country, April 30): Politicians clamor to tax "windfall profits" of oil companies when oil prices are high, but now it seems that there is a tax-increase symmetry that kicks in when oil prices are low.
Full text: Regarding Stephen Moore's "Alaska's Folly: Politicians Contemplate a State Income Tax " (Cross Country, April 30): Politicians clamor to tax "windfall profits" of oil companies when oil prices are high, but now it seems that there is a tax-increase symmetry that kicks in when oil prices are low. Alaska's proposed tax hikes, including revival of an income tax (despite the state's $51 billion Permanent Fund), make little economic sense, but that's par for the course in political responses to oil price changes. When oil prices soared, the consensus was that high oil prices were wrecking the economy. Then, when oil prices collapsed, the new narrative was that low prices were causing U.S. energy sector contraction that was killing the economy. As one of many ex-residents of Connecticut, I can attest that the state's introduction and ratcheting up of an income tax depressed economic growth and spurred many departures from the state. Connecticut has no reserve fund that might be used to fill budget gaps, so economic downturns require reduction in state spending or ever-higher taxes. So far, the latter is undefeated versus the former. Bill Greene Williamsburg, Va.
Subject: State taxes; Windfall profits; Tax increases; Income taxes; Price increases
Location: Alaska United States--US Connecticut
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 11, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788027701
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788027701?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Linn Energy Files for Bankruptcy; Houston oil and gas producer had previously warned of possible chapter 11
Author: Beckerman, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 May 2016: n/a.
Abstract:
Related * Linn Energy Says Bankruptcy May Be 'Unavoidable' (March 15, 2016) * Oil Companies Ultra Petroleum, Midstates File for Bankruptcy (May 2, 2016) * Energy XXI Files for Bankruptcy in Debt-for-Equity Swap (April 14, 2016) * MLP Investors Face Tax Hit On Top of Big Losses (March 9, 2016) * Oil Plunge Sparks Bankruptcy Concerns (Jan. 11, 2016) The Houston company expects normal operations to continue during the chapter 11 process.
Full text: Oil and gas producer Linn Energy LLC, which had previously said it could file for chapter 11 bankruptcy protection, did so on Wednesday with arrangements for a $2.2 billion credit facility. The oil and gas producer warned in March that a bankruptcy filing may be "unavoidable," and said last month that it reached a settlement with bondholders on a restructuring that could take place through a chapter 11 reorganization. Linn said Wednesday that it expects available cash during the bankruptcy process will be sufficient for its operations, and it doesn't intend to seek debtor-in-possession financing. Related * Linn Energy Says Bankruptcy May Be 'Unavoidable' (March 15, 2016) * Oil Companies Ultra Petroleum, Midstates File for Bankruptcy (May 2, 2016) * Energy XXI Files for Bankruptcy in Debt-for-Equity Swap (April 14, 2016) * MLP Investors Face Tax Hit On Top of Big Losses (March 9, 2016) * Oil Plunge Sparks Bankruptcy Concerns (Jan. 11, 2016) The Houston company expects normal operations to continue during the chapter 11 process. "After our review of the available options...we determined that this court supervised financial restructuring process is the best course of action for the company and our stakeholders," Linn said. Linn has struggled as distress has spread through the oil and gas industry, which has been crippled by persistently low prices. Linn focuses its exploration and production efforts in the Colorado Rockies, California, Hugoton Basin, Mid-Continent, Permian Basin, east Texas and north Louisiana, Michigan, Illinois and South Texas. Write to Josh Beckerman at josh.beckerman@wsj.com Credit: By Josh Beckerman
Subject: Bankruptcy reorganization; Bankruptcy; Corporate profiles
Location: California
Company / organization: Name: Colorado Rockies; NAICS: 711211
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 11, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788100447
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788100447?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
EPA Ready to Issue Methane Limits for New Oil and Gas Wells; Regulations, to be released Thursday, aim to cut emissions for first time
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 May 2016: n/a.
Abstract:
The final regulations, which EPA proposed last year, are the latest in a series of rules the Obama administration is pursuing in a broad agenda clamping down on greenhouse gas emissions from fossil fuels.
Full text: WASHINGTON--The Environmental Protection Agency is set to issue on Thursday the first federal standards aimed at curbing methane emissions from the oil and natural gas industry, according to multiple people familiar with the plan. The final regulations, which EPA proposed last year, are the latest in a series of rules the Obama administration is pursuing in a broad agenda clamping down on greenhouse gas emissions from fossil fuels. The rules are one piece of an administration goal to cut methane emissions from the oil and gas industry by as much as 45% from their 2012 levels over the next decade. The rules, which will only affect new oil and natural gas wells, will require companies to install technologies to monitor and limit inadvertent emitting of methane during the production and transmission process of natural gas, whose primary component is methane, and also require new practices, such as regular inspections for leaks. A spokeswoman for the EPA declined to comment on the rules' release. Over the past year, the Obama administration has focused increasingly on methane emissions, which the EPA says have a warming effect on the planet at least 25 times that of carbon dioxide. Write to Amy Harder at amy.harder@wsj.com Credit: By Amy Harder
Subject: Emissions; Natural gas
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 11, 2016
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788104405
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788104405?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
A Climate Courtroom Crusade Scorches Due Process; Attorneys general demand Exxon's files without first asking a judge--a case of the fox guarding the hens.
Author: Hamburger, Philip
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 May 2016: n/a.
Abstract:
[...]an attorney general who wanted to rifle through a private company's filing cabinet had to get a warrant signed by a judge based on probable cause, or had to ask a court overseeing a grand jury to issue a subpoena. Regrettably, this evasion of judicial subpoenas is only the beginning of the due-process problem, for Mr. Schneiderman and other attorneys general have the power to bring not simply administrative, but criminal, charges on the basis of the information they force out of private parties.
Full text: Six months ago, New York Attorney General Eric Schneiderman issued a subpoena demanding that Exxon Mobil turn over records concerning its research on climate change. In March, Mr. Schneiderman took the predictable next step, announcing that a coalition of attorneys general will hold fossil fuel companies accountable. "The First Amendment, ladies and gentlemen, does not give you the right to commit fraud," he said. The threat to scientific inquiry and political speech is obvious. Not so widely recognized is the underlying violation of due process. Start with the fact that Mr. Schneiderman and the other attorneys general have relied, as their opening move, on a nonjudicial subpoena to force the disclosure of information. Traditionally, federal and state governments could demand testimony, papers or other information in only very limited ways. A legislative committee could call witnesses and insist that they appear and testify. But an attorney general who wanted to rifle through a private company's filing cabinet had to get a warrant signed by a judge based on probable cause, or had to ask a court overseeing a grand jury to issue a subpoena. Otherwise the attorney general had to wait until he brought civil or criminal charges, and in a criminal case he could get only a very limited version of discovery. As the founding generation knew from experience, government demands for papers could be dangerous. Much has changed over the past century. When civil discovery of evidence, now a common process, evolved in the late 19th and early 20th centuries, some states, for the sake of convenience, allowed subpoenas for such purposes to be signed not by judges, but by clerks, and then even by parties in cases. The subpoena power thus began to drift out of the hands of the judiciary. Although this initial step was trivial, it offered legitimacy for what followed: Over the 20th century, Congress gave administrative agencies, from the Agriculture Department to the Department of Health and Human Services, statutory authority to issue subpoenas in their own name. And state legislators have granted such power to their equivalent agencies. All sorts of administrators, at both levels of government, thereby acquired an expansive power to demand information without initially working through a judge. This was bad enough, but it gets worse. Lawmakers also granted subpoena authority to their attorneys general. New York did so in 1921. Even prosecutors thus can now read through private papers on demand. The Supreme Court upheld the subpoena power of agencies in United States v. Morton Salt (1950), on the theory that administrators are exercising the power of a grand jury. This is improbable, but it is even more improbable for prosecutors, who lead grand jury proceedings. Having a role in facilitating grand juries, a prosecutor cannot, by himself, be assumed to act as one. Even if the Morton Salt argument really justifies administrative subpoenas, it cannot explain an attorney general's subpoena. Nor can the dangers of giving a subpoena power to prosecutors be waved away. In a grand jury, a judge oversees the proceedings to prevent excessive intrusions into private papers and lives. In a government agency, the administrator typically is not an elected official, and therefore is not using the subpoena power to generate public support for his own political campaign. But when an attorney general issues a subpoena, the opposite conditions prevail: There is no ongoing judicial supervision and far too much politics. Regrettably, this evasion of judicial subpoenas is only the beginning of the due-process problem, for Mr. Schneiderman and other attorneys general have the power to bring not simply administrative, but criminal, charges on the basis of the information they force out of private parties. They thereby dangerously combine the roles of grand jury and prosecutor. If Mr. Schneiderman were bringing a civil case, he could seek discovery only after filing a complaint about a concrete injury, and his demands would be subject to judicial supervision, including protective orders to narrow their scope. If he were bringing a criminal case, he would have difficulty getting much information at all from the defendant through discovery. But with the usurped subpoena power, he can engage in a roving investigation, unlimited by any formal accusation, and then can use the results to bring criminal charges. This is a dangerous amalgam of grand-jury and prosecutorial power in one person. Mr. Schneiderman's subpoena to Exxon Mobil thus stands apart. His ability to demand information in this way is a quintessential case of the fox guarding the henhouse. The threats to privacy in our society are not merely technological; they also are legal. In addition to electronic surveillance, nonjudicial subpoenas allow government to examine private documents as if they were an open book. And as shown by Mr. Schneiderman, when attorneys general can issue such subpoenas, a valuable judicial power becomes a prosecutorial threat to liberty and due process. Mr. Hamburger is a law professor at Columbia University and the author of "Is Administrative Law Unlawful?" (University of Chicago Press, 2014). Credit: By Philip Hamburger
Subject: Attorneys general; Grand juries; Subpoenas; Government agencies; Court hearings & proceedings
Location: New York
Company / organization: Name: Congress; NAICS: 921120; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Department of Health & Human Services; NAICS: 923120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 11, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788106778
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788106778?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Linn Energy Files for Bankruptcy; Houston oil and gas producer had previously warned of possible chapter 11
Author: Beckerman, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 May 2016: n/a. [Duplicate]
Abstract:
Linn Energy formed joint venture agreements last year with Blackstone Group's credit arm, GSO Capital Partners, and energy-focused private- equity firm Quantum Energy Partners when the company was seeking fresh capital to fund exploration and development.
Full text: Oil and gas producer Linn Energy LLC, which had previously said it could file for chapter 11 bankruptcy protection, did so on Wednesday with arrangements for a $2.2 billion credit facility. The oil and gas producer warned in March that a bankruptcy filing may be "unavoidable," and said last month that it reached a settlement with bondholders on a restructuring that could take place through a chapter 11 reorganization. Linn Energy formed joint venture agreements last year with Blackstone Group's credit arm, GSO Capital Partners, and energy-focused private- equity firm Quantum Energy Partners when the company was seeking fresh capital to fund exploration and development. At press time, it was not immediately clear how the bankruptcy filing would affect those joint ventures. Linn said Wednesday that it expects available cash during the bankruptcy process will be sufficient for its operations, and it doesn't intend to seek debtor-in-possession financing. The Houston company expects normal operations to continue during the chapter 11 process. "After our review of the available options...we determined that this court supervised financial restructuring process is the best course of action for the company and our stakeholders," Linn said. Linn has struggled as distress has spread through the oil and gas industry, which has been crippled by persistently low prices. Linn focuses its exploration and production efforts in the Colorado Rockies, California, Hugoton Basin, Mid-Continent, Permian Basin, east Texas and north Louisiana, Michigan, Illinois and South Texas. --Laura Kreutzer contributed to this article. Credit: By Josh Beckerman
Subject: Bankruptcy reorganization; Bankruptcy
Location: California
Company / organization: Name: Colorado Rockies; NAICS: 711211; Name: Quantum Energy Partners; NAICS: 523910; Name: GSO Capital Partners LP; NAICS: 525990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 11, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788199086
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788199086?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Reverse Gains But Uptrend Intact; July Brent crude fell $0.33 to $47.27 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
The resurgence of U.S. producers will likely prompt other producers -- especially those in the Organization of the Petroleum Exporting Organization -- to keep pumping at top speed, further exacerbating the global glut and wiping out any likelihood of a collective output cap at the next OPEC meeting in June.
Full text: Oil prices lost traction in early Asian trade Thursday on profit-taking after a sharp rise overnight, driven by the unexpected drop in U.S. crude stockpiles and continuing supply outages in Canada and Africa. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $45.96 a barrel at 0159 GMT, down $0.27 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.33 to $47.27 a barrel. U.S. crude-oil stockpiles upstaged analysts' expectation by dropping 3.4 million barrels in the week ended May 6, data from Energy Information Administration showed. While inventories still remain near the highest levels in more than 80 years, investors are taking comfort in the steady decline in U.S. production. EIA data show U.S. crude output fell last week to the lowest level since September 2014 to 8.8 million barrels a day. Prices were also supported by ongoing supply outages in Canada due to wildfires in the country's oil-sands hub, as well in Nigeria, where militant attacks on oil facilities have squeezed crude exports. Shell Petroleum Development Co. of Nigeria this week shut off exports from a major pipeline due to a leak. This is in addition to an offshore production platform and an export terminal in Nigeria that have also been shut this year. Nigeria produced about 1.7 million barrels a day of crude oil in March, the lowest level since 2009, according to the International Energy Agency. Political upheaval in Libya has also hindered production there. The country's oil production fell by 140,000 barrels a day to 220,000 barrels a day following the blockage of a port last week, said a spokesman for the internationally recognized National Oil Co. in Tripoli. "Prices have broken the resistance and will need further outages to push prices higher," said Stuart Ive, a client manager at OM Financial. Market watchers say that while moving sideways on a daily basis, oil prices will likely enjoy a modest uptrend in the near term, but warn of strong headwinds ahead. U.S. shale producers that were sidelined earlier by the sub-$30 prices might jump back into the game when prices climb higher to make up for lost time, said Aaron Lynch, a Sydney-based energy analyst at OptionsXpress. The resurgence of U.S. producers will likely prompt other producers -- especially those in the Organization of the Petroleum Exporting Organization -- to keep pumping at top speed, further exacerbating the global glut and wiping out any likelihood of a collective output cap at the next OPEC meeting in June. "It will be an everyman for himself situation all over again," said Mr. Lynch. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 113 points to $1.5702 a gallon, while June diesel traded at $1.3902, 65 points lower. --Nicole Friedman contributed to this article. Credit: By Jenny Hsu
Subject: Crude oil prices; Petroleum production; Crude oil; Price increases
Location: United States--US Nigeria Canada Africa
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788121406
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788121406?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Pipeline Outage Adds to Nigerian Oil Disruptions; Several output interruptions globally are helping to support crude prices
Author: Kent, Sarah; Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
LONDON--Royal Dutch Shell PLC on Wednesday said its exports of Nigerian crude oil had been significantly disrupted, adding to a slew of stoppages that have knocked out around 500,000 barrels a day of oil output in the West African country.
Full text: LONDON--Royal Dutch Shell PLC on Wednesday said its exports of Nigerian crude oil had been significantly disrupted, adding to a slew of stoppages that have knocked out around 500,000 barrels a day of oil output in the West African country. It is the latest hit to oil exports across the world, leading to mounting concerns about the global crude supply. A series of output interruptions from Canada to Libya have illustrated how quickly the global glut of oil could be cleared out after nearly two years of weighing on prices. Canadian outages caused by rampant wildfires, supply disruptions caused by political disagreements in Libya and the Nigerian stoppages now add up to 3.5 million barrels of offline oil a day, said Seth Kleinman, a Citigroup analyst. "The growing level of supply disruptions should tighten near-term balances," Mr. Kleinman wrote in a note. Global oil production still outpaces demand by more than 1 million barrels on any given day, weighing down crude prices that fell to their lowest levels in 13 years in 2016. Oil-market experts, including Saudi Arabia, believe supply and demand won't balance more permanently until the end of 2016. Oil prices were up on Wednesday as new data showed U.S. oil stock inventories had been drawn down . Nigeria's oil production looks particularly vulnerable amid an alarming increase in militant attacks on infrastructure in the country's oil-rich south. Though it remains unclear what caused the latest outage, it follows a series of attacks that knocked out a significant volume of production since the start of the year. In an emailed statement, Shell's Nigerian subsidiary said it had declared force majeure as of Tuesday, a move that gives it legal indemnity for being unable to fulfill its export obligations. The company said a leak had closed the Nembe Creek Trunk line which pipes crude through the Niger Delta to Shell's export terminal. The disruption will affect about 200,000 barrels a day of crude exports this month, according to a trader familiar with Nigeria's export program. Shell didn't comment on the cause of the leak or the size of any associated spill. The Anglo-Dutch oil major sold the pipeline to Nigerian energy company Aiteo last year as part of a series of divestments from the restive Niger Delta, and referred further questions on the incident to the African company. Aiteo didn't respond to a request for comment. The incident comes a week after an attack shut down Chevron Corp.'s Okan platform off the Nigerian coast , knocking out 35,000 barrels a day of the company's crude output. Another of Shell's export terminals has been out of action since February, cutting off a further 250,000 barrels a day of the country's oil output. Both attacks were claimed by a group calling itself the Niger Delta Avengers, which says it wants locals to have more control over the region's oil resources and revenues. Nigeria's rich oil fields have a long history of militancy and criminality that frequently force oil companies to shut down production. In the 1990s, protests over oil spills forced Shell out of one part of the Niger Delta, and militant attacks last decade frequently shut down big chunks of the country's output. But large and sophisticated attacks on Nigeria's oil fields seemed to die down in the wake of a 2009 government amnesty for militants. That truce may be coming to an end, with severe implications for Nigeria's oil output. Last month, the International Energy Agency said supply from Nigeria fell to 1.7 million barrels a day in March--its lowest level since the middle of 2009. That was before the latest set of disruptions hit. The Niger Delta Avengers has threatened fresh attacks and said it would target international oil companies. Earlier this week, Shell evacuated nonessential personnel from one of its oil fields off the coast of Nigeria, though it said operations were continuing. Georgi Kantchev contributed to this article. Write to Sarah Kent at sarah.kent@wsj.com and Miriam Malek at Miriam.Malek@wsj.com Credit: By Sarah Kent and Miriam Malek
Subject: International markets; Supply & demand; Exports; Petroleum production; Militancy
Location: Nigeria Canada Niger Delta Libya
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Chevron Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788121631
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788121631?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Nigeria Disruptions Curb Oil Exports
Author: Kent, Sarah; Malek, Miriam
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 May 2016: B.3.
Abstract:
Royal Dutch Shell PLC on Wednesday said its exports of Nigerian crude oil had been significantly disrupted, adding to many stoppages that have knocked out around 500,000 barrels a day of oil output in the West African country.
Full text: LONDON -- Royal Dutch Shell PLC on Wednesday said its exports of Nigerian crude oil had been significantly disrupted, adding to many stoppages that have knocked out around 500,000 barrels a day of oil output in the West African country. It is the latest hit to oil exports across the world, leading to mounting concerns about the global crude supply. A series of output interruptions from Canada to Libya have illustrated how quickly the global glut of oil could be cleared out after nearly two years of weighing on prices. Canadian outages caused by rampant wildfires, supply disruptions caused by political disagreements in Libya and the Nigerian stoppages now add up to 3.5 million barrels of offline oil a day, said Seth Kleinman, a Citigroup analyst. "The growing level of supply disruptions should tighten near-term balances," Mr. Kleinman wrote in a note. Global oil production still outpaces demand by more than 1 million barrels on any given day, weighing down crude prices that fell to their lowest levels in 13 years in 2016. Oil-market experts, including Saudi Arabia, believe supply and demand won't balance more permanently until the end of 2016. Oil prices were up on Wednesday as new data showed U.S. oil stock inventories had been drawn down. Nigeria's oil production looks particularly vulnerable amid an alarming increase in militant attacks on infrastructure in the country's oil-rich south. Though it remains unclear what caused the latest outage, it follows a series of attacks that knocked out a significant volume of production since the start of the year. In an emailed statement, Shell's Nigerian subsidiary said it had declared force majeure as of Tuesday, a move that gives it legal indemnity for being unable to fulfill its export obligations. The company said a leak had closed the Nembe Creek Trunk line which pipes crude through the Niger Delta to Shell's export terminal. The disruption will affect about 200,000 barrels a day of crude exports this month, according to a trader familiar with Nigeria's export program. Shell didn't comment on the cause of the leak or the size of any associated spill. The Anglo-Dutch oil major sold the pipeline to Nigerian energy company Aiteo last year as part of a series of divestments from the restive Niger Delta, and referred further questions on the incident to the African company. Aiteo didn't respond to a request for comment. The incident comes a week after an attack shut down Chevron Corp.'s Okan platform off the Nigerian coast, knocking out 35,000 barrels a day of the company's crude output. Another of Shell's export terminals has been out of action since February, cutting off a further 250,000 barrels a day of the country's oil output. Both attacks were claimed by a group calling itself the Niger Delta Avengers, which says it wants locals to have more control over the region's oil resources and revenues. Nigeria's rich oil fields have a long history of militancy and criminality that frequently force oil companies to shut down production. In the 1990s, protests over oil spills forced Shell out of one part of the Niger Delta, and militant attacks last decade frequently shut down big chunks of the country's output. But large and sophisticated attacks on Nigeria's oil fields seemed to die down in the wake of a 2009 government amnesty for militants. That truce may be coming to an end, with severe implications for Nigeria's oil output. Last month, the International Energy Agency said supply from Nigeria fell to 1.7 million barrels a day in March -- its lowest level since the middle of 2009. That was before the latest set of disruptions hit. --- Georgi Kantchev contributed to this article. Credit: By Sarah Kent and Miriam Malek
Subject: Exports; Crude oil
Location: Nigeria
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Classification: 8510: Petroleum industry; 9177: Africa
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: May 12, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788165993
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788165993?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil, Windfall Taxes and Bad Long-Term Economic Policy
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 May 2016: A.14.
Abstract:
Regarding Stephen Moore's "Alaska's Folly: Politicians Contemplate a State Income Tax" (Cross Country, April 30): Politicians clamor to tax "windfall profits" of oil companies when oil prices are high, but now it seems that there is a tax-increase symmetry that kicks in when oil prices are low.
Full text: Regarding Stephen Moore's "Alaska's Folly: Politicians Contemplate a State Income Tax" (Cross Country, April 30): Politicians clamor to tax "windfall profits" of oil companies when oil prices are high, but now it seems that there is a tax-increase symmetry that kicks in when oil prices are low. Alaska's proposed tax hikes, including revival of an income tax (despite the state's $51 billion Permanent Fund), make little economic sense, but that's par for the course in political responses to oil price changes. When oil prices soared, the consensus was that high oil prices were wrecking the economy. Then, when oil prices collapsed, the new narrative was that low prices were causing U.S. energy sector contraction that was killing the economy. As one of many ex-residents of Connecticut, I can attest that the state's introduction and ratcheting up of an income tax depressed economic growth and spurred many departures from the state. Connecticut has no reserve fund that might be used to fill budget gaps, so economic downturns require reduction in state spending or ever-higher taxes. So far, the latter is undefeated versus the former. Bill Greene Williamsburg, Va.
Subject: State taxes; Windfall profits; Tax increases; Income taxes; Price increases
Location: Alaska United States--US Connecticut
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.14
Publication year: 2016
Publication date: May 12, 2016
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788166552
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788166552?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Oil Glut to Shrink Despite Iranian Output Surge, IEA Says; Oil watchdog sees global stocks falling 200,000 barrels a day in the last six months of 2016
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
In April, non-OPEC production fell 125,000 barrels a day to 56.6 million barrels a day as planned and unplanned outages add to declines caused by lower oil prices and spending cuts.
Full text: Iran's oil production has risen faster than expected, reaching levels not seen since before Western sanctions were tightened in 2011, but a global oversupply of crude is still shrinking, the International Energy Agency said Thursday. The Islamic Republic ramped production up by 300,000 barrels a day month-on-month in April, hitting 3.56 million barrels a day, according to the IEA's closely watched monthly oil-market report. The output is now at levels not seen since international sanctions were extended to curb the country's nuclear program. Iranian exports increased at greater rate, with preliminary data suggesting a month-on-month rise of 600,000 barrels a day to about 2 million barrels a day. However, the dramatic increase from 1.4 million barrels a day seen the previous month, may have been helped by loadings that spilled over from March , the Paris-based agency said. China was Iran's largest customer, importing 800,000 barrels a day of crude. Despite the strength of Iran's rebound, global oil markets are moving closer to balance in the second half of the year as unplanned disruption to production in countries such as Canada and Nigeria are helping to run down a global overhang of crude inventories. Global oil stocks will diminish to 200,000 barrels a day in the last six months of the year from 1.3 million in the first half, it said. The IEA has previously projected supply will exceed demand by an average of 1.5 million barrels a day in the first six months of 2016. "Further oil price rises, though, are likely to be limited by brimming crude oil and products stocks that will remain a feature of the market until more normal levels of inventory are reached," it said. Production outside the Organization of the Petroleum Exporting Countries will decline by 800,000 barrels a day this year, the adviser to industrialized nations said, an acceleration from the previous forecast for a drop of 710,000. In April, non-OPEC production fell 125,000 barrels a day to 56.6 million barrels a day as planned and unplanned outages add to declines caused by lower oil prices and spending cuts. Output is expected to drop further in May due to the wildfires in Canada, it said. The IEA maintained its forecast for global demand growth broadly at 1.2 million barrels a day for this year, but said the risks to future forecasts lay to the upside. "Any changes to our current 2016 global demand outlook are now more likely to be upward than downward, as gasoline demand grows strongly in nearly every key market, more than offsetting weakness in middle distillates," the IEA said. OPEC's April output rose by 330,000 barrels a day in April to 32.76 million barrels a day, its highest level since 2008, on higher supplies from Iran, Iraq and the United Arab Emirates, which more than offset outages in Kuwait and Nigeria, the IEA said. The grouping's April output is about 500,000 barrels a day more than the average required for this year, the report showed. Saudi Arabia's output was steady in April near 10.2 million barrels a day, it said. Write to Summer Said at summer.said@wsj.com Credit: By Summer Said
Subject: Supply & demand; Cartels; Petroleum production
Location: Iran Nigeria Canada
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788179472
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further re production or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Rise After IEA Report; International Energy Agency sees global oil stocks increasing before 'dramatic reduction'
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
The Paris-based agency said global oil stocks will experience a "dramatic reduction" in the second half of the year, but also warned that they will continue to increase in the first half of the year as Iran ramps up its production, adding to the nearly two years of oversupply.
Full text: U.S. oil prices rose to a fresh six-month high in topsy-turvy action with traders divided about whether the oil market is balancing faster than expected or on its way to another major retreat. A report from the International Energy Agency was the one clear new catalyst in the market Thursday, but even it drew mixed interpretations. The Paris-based agency said global oil stocks will experience a "dramatic reduction" in the second half of the year, but also warned that they will continue to increase in the first half of the year as Iran ramps up its production, adding to the nearly two years of oversupply. Oil prices initially rose on the report as many saw it as an affirmation of the recent 76% rally in crude prices and the signs that oversupply is waning. But the market also spent a good chunk of U.S. trading hours in retreat with brokers saying some traders took profits from recent gains or sold expecting that oil's ascent to $50 a barrel will bring more producers selling into the market. The crude markets ended higher for their third straight winning session. Light, sweet crude for June delivery settled up 47 cents at $46.70 a barrel on the New York Mercantile Exchange, the highest mark since November. Brent, the global benchmark, rose 48 cents, or 1%, to $48.08 a barrel on ICE Futures Europe. Many traders already see the market in "rebalancing mode," said Dominick Chirichella, analyst at the Energy Management Institute. The IEA's report confirms that, and contradicts many bears who have predicted demand may not be strong enough to help absorb the oversupply, with strong demand gains in India, China and Russia, traders said. U.S. demand already set records in March. "Demand is solid world-wide," said Tim Rudderow, president of Mount Lucas Management, which oversees $1.6 billion in assets. "Even in the U.S., we have given up on high-mileage [per gallon] cars and jumped back into our trucks and SUVs." Production in most of the world continues to decline, the IEA said, led by falling output in the U.S. It added that recent outages in Nigeria, Ghana and Canada have exceeded 1.5 million barrels a day so far. But it also said combined output of the Organization of the Petroleum Exporting Countries climbed in April to 32.76 million barrels a day, the highest since April 2008. The rise in Iran's oil production and exports after the lifting of international sanctions has been faster than expected, the agency added. Iran increased daily oil output by 300,000 barrels in April to 3.56 million barrels a day, a level last achieved in November 2011. "The market remains awash with oil as rising Middle Eastern output is more than offsetting declining U.S. shale production and the various temporary disruptions," said Norbert Ruecker, head of commodities research at Julius Baer. The recent supply "disruptions are temporary, and we believe that support to price should remain short-lived." Gasoline futures rose 0.18 cent, or 0.1%, to $1.5833 a gallon. Diesel futures rose 0.27 cent, or 0.2%, to $1.3940 a gallon. Summer Said and Jenny W. Hsu contributed to this article. Write to Timothy Puko at tim.puko@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Timothy Puko and Georgi Kantchev
Subject: Supply & demand; Crude oil prices; Petroleum production; Price increases
Location: United States--US Iran
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788184334
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Producer Crescent Point Posts Wider First-Quarter Loss; Steep drop in oil prices offset record quarterly output
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
Crescent Point Energy Corp. on Thursday reported a wider first-quarter loss and a 13% decline in cash flow as a steep drop in oil prices offset record quarterly production.
Full text: Crescent Point Energy Corp. on Thursday reported a wider first-quarter loss and a 13% decline in cash flow as a steep drop in oil prices offset record quarterly production. The Calgary, Alberta-based oil producer said it produced 178,241 barrels of oil equivalent a day in the quarter ended March 31, up 16% from a year earlier. Average selling prices, however, slumped 29% amid the continuing global oil glut. Like many of its oil-patch peers, Crescent Point has undertaken a number of cost-cutting measures to contend with slumping commodity prices, including scaling back capital-spending plans and slashing its dividend. It said its spending and output guidance for this year and initial plans for next year remain unchanged. It is targeting capital spending of 950 million Canadian dollars ($739 million) each year, down around 40% from 2015 levels, and average annual production of 165,000 barrels of oil equivalent a day. "We remain disciplined in our capital spending plans, including drilling and development capital as well as acquisitions," Chief Executive Scott Saxberg said in a release. He said the company's acquisition strategy remains focused on "internally funded opportunities" in its core plays, adding the company would consider noncore asset sales.Crescent Point has light and medium-oil, and natural-gas assets across western Canada and in the U.S. The company said it has reduced capital costs in many of its core resource plays by about 4% since the end of 2015. Crescent Point said its first-quarter loss widened to C$875 million, or 17 Canadian cents a share, from a loss of C$46 million, or 10 Canadian cents a year earlier. Adjusted to exclude certain items, it posted a loss of 1 Canadian cent a share. Analysts polled by Thomson Reuters had expected a loss of 11 Canadian cents. Cash flow fell to C$378 million from about C$434 million a year earlier, as average selling prices declined 29%. Write to Judy McKinnon at judy.mckinnon@wsj.com Credit: By Judy McKinnon
Subject: Financial performance; Cash flow; Capital costs; Capital expenditures
Location: Calgary Alberta Canada
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Crescent Point Energy Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788217298
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Penn Virginia Files for Chapter 11 Bankruptcy Protection; Oil-and-gas company cites low energy prices, seeks to cut debt by $1 billion
Author: Stech, Katy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
Read More * Penn Virginia Exploring Sale of Company * Energy Companies Gird for Weaker Prices in 2016 * Linn Energy Files for Bankruptcy "In the fall of 2014, oil prices plummeted due principally to global oversupply and have yet to recover," Chief Restructuring Officer R. Seth Bullock said in court papers.
Full text: Energy producer Penn Virginia Corp., one of the largest oil and natural gas drillers in Texas' Eagle Ford Shale, filed for bankruptcy Thursday after halting drilling in February. In court papers, Penn Virginia officials said plummeting oil and natural gas prices prompted them to negotiate a break with lenders on more than $1.2 billion of debt. The company's chapter 11 filing will help the company execute the reorganization, which already has support from nearly 90% of funded debtholders. The plan still needs a vote from other creditors and approval from Judge Keith L. Phillips of the U.S. Bankruptcy Court in Richmond, Va. First, however, Penn Virginia is asking Judge Phillips for permission to begin spending a $25 million bankruptcy loan from the company's existing lenders. The judge is expected to look over that request at a hearing Friday. The 96-worker company, based in Radnor, Pa., near Philadelphia, said in court papers its biggest operations to extract oil and natural gas from the ground are located in Texas, where the company and its affiliates own roughly 100,000 net acres. The company also drills in Oklahoma and in its home state's Marcellus Shale. As of Dec. 31, the company said in court papers it has 44 million barrels of oil equivalent in total proved reserves. Founded in 1882 as Virginia Coal & Iron Co., Penn Virginia mostly profited by leasing coal properties until 2001, when company officials expanded to focus on other land-management activities like timber sales. Penn Virginia also expanded its oil and natural gas exploration footprint by acquiring properties throughout the Appalachia region and in states like Texas, Louisiana and Mississippi. The energy price crash, which has prompted dozens of other oil and gas producers to seek bankruptcy protection, cut the company's revenue in half during the span of one year. Last year, Penn Virginia took in $305 million in revenue, down from $637 million in revenue recorded in 2014, court papers said. Read More * Penn Virginia Exploring Sale of Company * Energy Companies Gird for Weaker Prices in 2016 * Linn Energy Files for Bankruptcy "In the fall of 2014, oil prices plummeted due principally to global oversupply and have yet to recover," Chief Restructuring Officer R. Seth Bullock said in court papers. In response, Penn Virginia officials laid off employees and reduced the number of operating rigs in the Eagle Ford Shale to one from eight. But the cost-cutting wasn't enough. "The capital intensive nature of the [companies'] businesses, together with [its] highly leveraged capital structure, have made it difficult to withstand current headwinds," Mr. Bullock added. As part of the restructuring, Penn Virginia officials have proposed a $50 million rights offering and a new $128 million loan to fund its exit from bankruptcy. In January, the company was delisted from the New York Stock Exchange for having a too-low share price. Shares closed at 8 cents Wednesday, down from more than $10 in 2014 and $5 as recently as June. Penn Virginia's proposed restructuring would cancel its existing shares and holders wouldn't receive any payment, according to court papers. Austen Hufford contributed to this article. Write to Austen Hufford at austen.hufford@wsj.com Credit: By Katy Stech
Subject: Bankruptcy reorganization; Bankruptcy; Court hearings & proceedings; Stock market delistings; Energy industry; Natural gas prices
Location: Texas
Company / organization: Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788217550
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788217550?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11 -23
Database: The Wall Street Journal
U.S. Import Prices Rose For Second Straight Month in April; Firming oil prices could be pushing up inflation pressures
Author: Anna Louie Sussman
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
Read More on the Economy * U.S. Jobless Claims Spike Again * U.S. Budget Deficit Expanded in April * WSJ Survey: Most Economists Expect Next Fed Rate Increase in June The latest figures suggest core import prices "are likely to move toward stability on a year-over-year basis in the months ahead," said Joshua Shapiro, an economist at MFR, Inc. And import prices for non-petroleum industrial supplies and materials, such as metals and building materials, rose 0.4% in April, the first monthly advance since December 2014.
Full text: WASHINGTON--Prices for imported goods rose for the second straight month in April, a sign firming oil prices could be pushing up inflation pressures in the U.S. Import prices rose 0.3% in April , the Labor Department said Thursday, following an upwardly revised 0.3% rise in March. Economists surveyed by The Wall Street Journal had expected a 0.4% rise last month. The monthly increase again largely reflected an uptick in oil prices. Petroleum import prices advanced 4.1% in April, and March's rise was upwardly revised to a 9.6% monthly gain. Over the year, petroleum prices are still down 37.4%. But prices for non-petroleum imports also rose, albeit more slowly, ticking up 0.1% from March, "probably reflecting the weakening in the dollar," said Steven Ricchiuto, chief economist at Mizuho Securities USA. That is the first monthly advance since March 2014. Slow growth in overseas economies has tamped down demand for many commodities, weighing on their prices on the global market. A stronger dollar, meanwhile, makes imports relatively cheaper for U.S. consumers and exports more expensive for overseas buyers. But the dollar has weakened since the beginning of the year, and oil prices have also firmed since hitting decade lows near $30 a barrel in January. "The disinflationary impulse of the dollar has been easing," said Zina Bushra Saijid, an analyst with J.P. Morgan Chase, "and this is likely starting to pass through to nonfuel import prices." Excluding the volatile food and fuel categories, import prices were flat from March and are down 2% from April 2015. Read More on the Economy * U.S. Jobless Claims Spike Again * U.S. Budget Deficit Expanded in April * WSJ Survey: Most Economists Expect Next Fed Rate Increase in June The latest figures suggest core import prices "are likely to move toward stability on a year-over-year basis in the months ahead," said Joshua Shapiro, an economist at MFR, Inc. And import prices for non-petroleum industrial supplies and materials, such as metals and building materials, rose 0.4% in April, the first monthly advance since December 2014. That could signal some stirring in the U.S. manufacturing sector. Overall import prices are still down 5.7% from a year earlier. The year-over-year figure has fallen each month for 21 straight months, but the annual decline has been shrinking since September. U.S. export prices rose 0.5% in April, matching the largest advance since March 2014. Export prices are down 5% year-over-year. The U.S. imports roughly $2.7 trillion annually in goods and services, or around 16% of gross domestic product. In recent months, the U.S. has been importing oil despite abundant domestic production, because high domestic transport costs make it more economical to bring in oil from overseas. Last month, Federal Reserve officials held off on raising interest rates , in part because of worries about when inflation would reach the central bank's 2% target. Inflation has undershot 2% for nearly four years. Fed officials cited lower energy prices and "falling prices of non-energy imports" in their most recent monetary policy statement, although they believe these factors will prove transitory. Unlike other price gauges measured by the government, import prices aren't seasonally adjusted. Write to Anna Louie Sussman at anna.sussman@wsj.com Credit: By Anna Louie Sussman
Subject: Economic models; Prices
Location: United States--US
Company / organization: Name: MFR Inc; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788224399
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Shell Plans Oil-Asset Sale in Gabon, Says President; Oil major's divestment plan threatens Central African nation already hit by crashing crude prices
Author: Hinshaw, Drew; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
Royal Dutch Shell PLC is looking to sell oil blocks in Gabon, the country's president said, as the company's mammoth divestment plan threatens a Central African nation already hard hit by crashing crude prices.
Full text: Royal Dutch Shell PLC is looking to sell oil blocks in Gabon, the country's president said, as the company's mammoth divestment plan threatens a Central African nation already hard hit by crashing crude prices. In an interview in Kigali, Rwanda, Gabon's President Ali Bongo said Shell was pulling out of the onshore oil developments as part of a move to trim overhead amid a global oil glut. "What we're going through now, everybody is trying to cut expenses," said Mr. Bongo, adding that Shell's assets would probably be sold to a handful of Middle Eastern, European, and American companies that are bidding for them. "It's natural. You can't blame them." He didn't specify which assets, their value or output: "There are buyers interested," he said. Shell is in the process of selling off $30 billion of assets in the wake of its roughly $50 billion acquisition of BG Group PLC earlier this year. The deal gives the Anglo-Dutch oil major a strong position in the fast-growing liquefied-natural-gas market and lucrative deep-water blocks offshore Brazil, but investments that don't fit within those core areas are likely to come under serious scrutiny as the company looks for cash to bring down its debt level. Shell declined to comment on its intentions in Gabon, but a spokesman said the company "continuously evaluates opportunities for our global portfolio in line with our business strategy." Shell plans to spread its divestment program over the next three years. Shell's chief financial officer Simon Henry has said sales this year are more likely to focus on assets such as refineries because oil fields are less valuable and fetch lower sales prices with the crude market in the gutter. Oil prices have risen in recent weeks to as high as $48 a barrel on Thursday, but still remain down almost 60% from highs in June 2014, when the market began a long swoon. "We are working on a series of packages, but we're not about to jump into a fire sale, into a market that is clearly weak at the moment," Mr. Henry said earlier this month. Shell has been active in Gabon since the 1960s and is one of the biggest investors in the country's oil-and-gas sector. The country remains a sizable producer, but its output has been on the decline for more than a decade, raising issues for the government which relies on oil revenue for a substantial proportion of its budget. The collapse of crude prices has been hard on a swath of African countries--from Nigeria in the west, to Angola in the south--that depend on oil to pay civil servants and build new infrastructure. Gabon, in the heart of Central Africa, is a case in point. Last month, the rating agency Moody's downgraded the country's credit score by one notch on the "expectation that the government finances will continue to deteriorate in 2016." That won't stop the country from issuing a eurobond soon for electrical projects, among other infrastructure, Mr. Bongo said, without commenting on the size or timeline for that bond. Meanwhile, Gabon is in talks to rejoin the Organization of the Petroleum Exporting Countries, which it left in 1995. "These are our former partners, so we know them very well, and yeah, we're talking," said Mr. Bongo, who added that his government needs oil at $55 a barrel to fill a revenue gap. "It's not so much about influence, as the common effort we should all be doing to protect the market." OPEC officials have said Gabon is likely to be readmitted on June 2, when the cartel that controls a third of the world's oil production meets. In August, Mr. Bongo, the French-educated son of Gabon's previous president, Omar Bongo, will face what is shaping up to be the tightest election in Gabonese history. The 57-year-old incumbent is pitted against Jean Ping, the former African Union chairman and son of a Chinese migrant. "Unfortunately, this situation with oil comes at the wrong time," he said. Write to Drew Hinshaw at drew.hinshaw@wsj.com and Sarah Kent at sarah.kent@wsj.com Credit: Drew Hinshaw, Sarah Kent
Subject: Chemical industry; Price increases; Divestments
Location: Rwanda Gabon
People: Henry, Simon
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BG Group PLC; NAICS: 486210, 211111, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788242035
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fed's Mester Sees Signs of Inflation Moving Up Toward Goal; Cleveland Fed chief says inflation weakness is driven by transitory oil weakness and dollar strength
Author: Derby, Michael S
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
Related * Rosengren Sees 2nd-Quarter Growth Making Way for Higher Rates * Mester Sees Signs of Inflation Moving Up Toward Goal * Democratic Lawmakers Say Fed Should Increase Its Diversity * WSJ Survey: Economists Divided Over Next Fed Rate Increase * WSJ Survey: Economists See Slower Pace of Fed Rate Increases After an extended failure to achieve the central bank's official 2% price rise target, the data suggests a more benign price dynamic may be emerging.
Full text: Federal Reserve Bank of Cleveland President Loretta Mester said Thursday that inflation is making a welcome move higher. Her comments came from the text of remarks to be given to a conference in Germany. Her speech was largely academic and devoted to working through the issues of what the Federal Reserve does and doesn't know about what drives price increases and declines in the economy. The voting member of the interest-rate-setting Federal Open Market Committee didn't comment on the outlook for U.S. monetary policy or the economy. "For a monetary policymaker, price stability is the Holy Grail--price stability is the one thing that monetary policy can ensure over the longer run, and monetary policy is the only tool that can ensure price stability over the longer run," Ms. Mester said. Related * Rosengren Sees 2nd-Quarter Growth Making Way for Higher Rates * Mester Sees Signs of Inflation Moving Up Toward Goal * Democratic Lawmakers Say Fed Should Increase Its Diversity * WSJ Survey: Economists Divided Over Next Fed Rate Increase * WSJ Survey: Economists See Slower Pace of Fed Rate Increases After an extended failure to achieve the central bank's official 2% price rise target, the data suggests a more benign price dynamic may be emerging. "Inflation has been low for quite some time," Ms. Mester said, but "the most recent data are encouraging and consistent with the FOMC's view that inflation will gradually move back to target over time." The personal-consumption expenditures price index, the central bank's preferred inflation gauge, the rose 0.8% in March from a year ago. But underlying prices are closer to the 2% goal, with the core PCE price index, which takes out food and energy costs, up 1.6% from March 2015. A lack of inflation has been a key force causing the Fed to move cautiously with interest-rate rises. At the same time, mixed signals on the outlook for inflation derived from surveys and market sources have added to the reluctance to move rates up quickly. Ms. Mester said low inflation is unlikely to represent some permanent shift in price dynamics. "Inflation has been kept down by the decline in energy and other commodity prices, and in the U.S., a rise in the value of the dollar, which puts downward pressure on the prices of imports into the U.S.," she said. The official added that "in the U.S., as oil prices and the dollar have shown some stability of late, the headline and underlying measures of inflation have moved higher, in accordance with the pattern anticipated by the FOMC," she said. Ms. Mester said she would like to see the Fed offer more information about its inflation views as well as convey how uncertain it is about its forecasts. Ms. Mester also said that market-based measures of expected inflation need to be judged with some caution. Weakness there hasn't been matched to the same degree in surveys of the public and economists, and many believe market measures are influenced by other, noneconomic considerations. "Given the measurement challenges and the volatility we saw in financial markets last summer and at the turn of the year, I think we need to be somewhat cautious when inferring a signal about changes in inflation expectations from these market measures," Ms. Mester said. "Nonetheless, I also think it is worth monitoring all of the available indicators of inflation expectations because of the important role expectations play in inflation dynamics." Write to Michael S. Derby at michael.derby@wsj.com Credit: By Michael S. Derby
Subject: Central banks; Inflation; Economic models; Prices; Monetary policy; Economists
Location: United States--US Germany
Company / organization: Name: Federal Open Market Committee--FOMC; NAICS: 921130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788242582
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788242582?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oaktree's Venezuela Bet Spurs Long-Running Dispute; Distressed-debt investor Oaktree in fight over arbitration award paid by Venezuela state oil company
Author: Cumming, Chris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract: None available.
Full text: Oaktree Capital Management LP is known for its astute backing of troubled companies, but a dispute over the restructuring of a group of oil-and-gas services companies highlights the risks of this investment approach. Six years ago, Oaktree invested in the Gulmar Group, an undersea oil-services contractor, after the companies ran short of cash when their assets were seized by the Venezuelan government. They subsequently won a large arbitration award against state oil company Petróleos de Venezuela SA, or PdVSA, but the ownership of the proceeds now is in dispute between Oaktree and some of Gulmar's minority shareholders. Last year, this dispute led to a United Arab Emirates court passing a jail sentence on an Oaktree employee. A federal court in Sharjah, U.A.E., convicted Martin David Graham, a senior vice president in Oaktree's London office, of "breach of trust." The charge was based on allegations by Gulmar's founder that, as managing director of one of the Gulmar companies, Mr. Graham stole on Oaktree's behalf a portion of the $644 million PdVSA arbitration award. In a statement, Oaktree called the charges against Mr. Graham "meritless," and said it expects the conflict with the Gulmar shareholders "will eventually be resolved in the ordinary course of business." "Mr. Graham received no prior notice of [the charges] and thus had no opportunity to appear or defend himself," the statement said. "Oaktree fully expects the conviction, which lacks any factual basis, will ultimately be overturned or withdrawn." Los Angeles firm Oaktree, the world's largest distressed-debt investor, is known for profiting from contrarian investment strategies that others deem too risky, like home mortgages bought after the economic downturn or European assets during the region's debt crisis. The strategy of buying troubled companies also has left the firm tangled at times in court fights, bankruptcies and battles with creditors. Oaktree's investment in the Gulmar Group was a risky bet from the start, given the companies' troubled financial position. Gulmar had been hired to work on Venezuela's oil infrastructure in 2008, but after a dispute over payment, Hugo Chávez's government temporarily nationalized three of Gulmar's ships, putting the companies in desperate need of cash. In August 2010, an Oaktree fund paid $100 million for a 78% stake in the group. A little more than a year after it invested, after restructuring talks failed, Oaktree withdrew funding from the Gulmar Group, placed the companies into liquidation and bought their primary assets, according to a report from the companies' administrator. In the liquidation, the main Gulmar operating company and three of Gulmar's ships were sold to an Oaktree affiliate based in the Cayman Islands for about $640,000 cash, plus the reduction of about $60 million of debt owed Oaktree. The firm also assumed other debt on the assets. This restructuring left the Gulmar Group's minority shareholders owning a shell of a company. But they still had a potential windfall in the form of a breach-of-contract claim against PdVSA, which was being pursued by a Gulmar subsidiary called Gulmar Offshore Middle East, or GOME, based in Sharjah. Mr. Graham was made managing director of that company in 2012 and led the efforts to get PdVSA to pay out. The next year, he helped secure the $644 million judgment against PdVSA from a London arbitration panel. That money was to be shared between GOME and Kaplan Industry, a Panamanian company that was also party to the contract with PdVSA. What isn't clear, however, is how much of the $644 million GOME actually received. PdVSA said in a 2014 annual report that it has paid the sum in full. But a person with knowledge of the matter said that GOME agreed to settle with PdVSA for a fraction of the full sum. The terms of the settlement are confidential, the Gulmar Group's administrator said. GOME paid Oaktree, its sole secured creditor, part of the PdVSA award--administration documents don't say how much--and then, in July 2015, applied for bankruptcy. Its administrator, AlixPartners LLP, has received a further $74 million from the PdVSA award as of March 31, which it planned to distribute to GOME's unsecured creditors. AlixPartners declined to comment. PdVSA and Kaplan industry didn't respond to requests for comment. The allegations against Mr. Graham, the Oaktree employee convicted in the U.A.E., were brought by the founder of the Gulmar Group, Jean-Michel Tissier, a French national based in Sharjah who leads the group of minority investors who believe they are entitled to a share of the PdVSA award. The court sentenced Mr. Graham to three years in prison and ordered him to pay the equivalent of about $1.6 million to Mr. Tissier, according to court documents. He remains employed by Oaktree in London. Write to Chris Cumming at chris.cumming@wsj.com Credit: By Chris Cumming
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788248123
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
EPA Issues Final Rules Cutting Oil, Natural Gas Methane Emissions; Regulations, part of Obama's climate-change agenda, to impose standards for new oil, natural gas wells
Author: Harder, Amy; Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
WASHINGTON--The Environmental Protection Agency on Thursday issued the first-ever federal standards aimed at curbing methane emissions from the oil and natural gas industry, the latest in a series of regulations the Obama administration is pursuing in an effort to clamp down on greenhouse gas emissions from fossil fuels.
Full text: WASHINGTON--The Environmental Protection Agency on Thursday issued the first-ever federal standards aimed at curbing methane emissions from the oil and natural gas industry, the latest in a series of regulations the Obama administration is pursuing in an effort to clamp down on greenhouse gas emissions from fossil fuels. The final regulations, which the EPA initially proposed last year , are part of a broader Obama administration goal to cut methane emissions from oil and gas production by as much as 45% from 2012 levels over the next decade. Related * U.S. Targets Oil, Gas Wells to Cut Methane Emissions (March 10) * Obama Administration Proposes Cutting Methane Waste from Oil, Natural Gas Production (Jan. 22) The rules, which affect new oil and natural gas wells only, will require companies to install technologies that monitor and limit inadvertent emission of methane during the production and transmission process of natural gas, whose primary component is methane, and require new practices, such as regular inspections for leaks. EPA Administrator Gina McCarthy called the completed rules, which cover more wells and include more frequent inspections than initially proposed, common sense. "The actions we're announcing today will help combat climate change, it will reduce air pollution that directly harms public health, and it will make sure that the oil and gas industry can continue to operate safely and responsibly as a vital source of energy for Americans across the country," Ms. McCarthy told reporters. The EPA estimates the regulations will cost $530 million in 2025, but yield climate-related benefits worth $690 million. Analysts at FBR & Co. said the rules appear consistent with the Obama administration's middle-of-the-road approach in its efforts to curb climate environmental impacts while allowing for industry growth. Kyle Isakower, vice president of regulatory and economic policy for the American Petroleum Institute, said the industry is already working to reduce emissions and decried the regulations as burdensome for the shale-energy industry. He said on a call with reporters that the rules are likely to be much more expensive than the EPA expects. A previous analysis done for the group estimated associated costs at $800 million annually. "The industry is already leading the way on methane reductions, because it is good for the environment and good for business," said Mr. Isakower. "Imposing a one-size-fits-all scheme on the industry could actually stifle innovation and discourage investments in new technologies that could serve to further reduce emissions." Mr. Isakower said it is too early to say whether API will try to challenge the rule in court, but would keep its options open. Administration officials said in March the EPA was also in the early stages of pursuing regulations targeting the hundreds of thousands of existing wells across the U.S. , a step that would affect the oil and gas industry significantly more than the rules for new sources are expected to. The agency said Thursday it was launching that effort by issuing requirements for companies to provide information that will help shape emission regulations for existing wells. Ms. McCarthy promised swift action on that front, but her agency doesn't expect to finish collecting that information until next year, when a new president will be in the White House. Jim Kibler, policy chair for One Future, a coalition of natural gas companies and electricity providers working to reduce methane emissions from existing sources, said he was pleased Thursday to hear Ms. McCarthy recognize the voluntary efforts of groups such as his. As the EPA moves forward on an emissions rule to govern existing oil and gas wells, Mr. Kibler said cost-effectiveness and flexibility should be key considerations. Thursday's announcement is the latest step in a broader effort to target domestic greenhouse-gas emissions and show the U.S. is following through on a global deal on climate change reached by roughly 200 nations late last year. In addition to the EPA move on all existing oil and gas wells, the Interior Department is working to complete rules aimed at cutting methane emissions from existing oil and natural-gas operations on federal lands, though these account for a small portion of domestic drilling. Over the past year, the Obama administration has focused increasingly on methane emissions, which the EPA says have a warming effect on the planet at least 25 times that of carbon dioxide. Andrew Logan, director of the oil and gas program at the environmental group Ceres, said the federal standards are a good first step, helping natural gas remain a viable bridge fuel as the nation tries to reduce its reliance on more carbon-intensive fossil fuels. "Without addressing methane, natural gas risks becoming part of the problem rather than part of the solution to climate change," Mr. Logan said. "We are happy to see the administration moving forward with a first attempt at nationwide regulation of methane." The EPA released new data in April showing that the oil and natural gas industry is the nation's top emitter of methane, accounting for about 33% of all U.S. methane emissions and surpassing that of the agricultural sector, which was previously thought to be the top emitter, primarily through cows' digestive processes. The updated data reflect an increase in oil and natural gas production over the last several years, more comprehensive data collection by the EPA and a higher initial baseline than previously thought. Mark Brownstein, a vice president of the Environmental Defense Fund who focuses on the oil and gas industry, said moving toward regulating existing wells is critical. "The vast majority of methane emissions that are coming from this sector are coming from the wide array of existing systems already out in the field today," Mr. Brownstein said. "That's the reason why the next step needs to be a set of regulations to address existing sources." Write to Amy Harder at amy.harder@wsj.com and Erin Ailworth at Erin.Ailworth@wsj.com Credit: By Amy Harder and Erin Ailworth
Subject: Emissions; Outdoor air quality; Climate change; Energy industry; Natural gas utilities
Location: United States--US
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788248151
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788248151?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Glencore, Vitol Near Deal to Buy Iranian Crude; National Iranian Oil Co. wants to dictate where crude is sold
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
Glencore--which trades large quantities of oil in addition to the copper, coal and other commodities it mines and sells--became the first Western company to load Iranian oil products since the end of sanctions, but the cargo was made of fuel oil, rather than more expensive crude.
Full text: TEHRAN--Glencore PLC and Vitol Group, the world's two largest independent oil traders, are close to signing a long-term deal to purchase Iranian crude, a top Iranian official said. The potential deal would mark the return of two of Iran's biggest oil trading partners before Western sanctions over the country's nuclear program were tightened in 2012. Iran has sought to ramp up production since those sanctions ended in January. But many Western buyers have been reluctant to purchase its oil because their banks are concerned about falling foul of remaining U.S. sanctions. Glencore and Vitol representatives declined to comment. Iran and the two Swiss-based companies are close to reaching separate agreements with state-owned National Iranian Oil Co., said Mohsen Ghamsari, the company's director of international affairs, in an interview. Mr. Ghamsari said one of the main issues to iron out is that the state company wants to choose the destination of the crude that it sells Glencore and Vitol. It isn't unusual for Iran's state oil company--or those in other countries --to dictate where oil traders market their crude. In a separate interview, Iran's deputy oil minister Amir Hossein Zamaninia said Glencore and Vitol have purchased mostly oil products from Iran until now. Glencore--which trades large quantities of oil in addition to the copper, coal and other commodities it mines and sells--became the first Western company to load Iranian oil products since the end of sanctions, but the cargo was made of fuel oil, rather than more expensive crude. It has struggled to find financing for the crude purchase, according to an Iranian trader involved in the deal. Many European banks have been wary of doing business involving Iran while U.S. sanctions over terrorism and weapons are still in place and a ban remains on dollar-denominated transactions. European banks like HSBC and Standard Chartered have settled previous allegations of doing illegal business with Iran. U.S. Secretary of State John Kerry traveled to London Thursday to tell European bankers to address their concerns. He said banks could do "legitimate business" in Iran. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Sanctions; International finance
Location: United States--US Iran
People: Kerry, John F
Company / organization: Name: National Iranian Oil Co; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788306109
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788306109?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude-Oil Production Drops Again in North Dakota; Output falls 1% to 1.10 million barrels a day from 1.11 million barrels a day
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract:
The steady drop in output comes amid a downturn in crude prices, which has cut into profit margins from wells in the Bakken formation in North Dakota and other U.S. shale-oil fields.
Full text: North Dakota crude-oil production fell for the fourth month in a row, dropping about 1% in March and hitting its lowest level in nearly two years. The steady drop in output comes amid a downturn in crude prices, which has cut into profit margins from wells in the Bakken formation in North Dakota and other U.S. shale-oil fields. Related * North Dakota Cities Use Oil Slump to Regroup (Jan. 14) * North Dakota Oil Production Falls for Third Month in a Row (April 15) Oil production in the state dropped to 1.10 million barrels a day in March from 1.11 million barrels a day in February, according to the latest data from the North Dakota Department of Mineral Resources. The state's output hasn't been that low since June 2014, and it marks the fourth straight month of declines, data from the department show. The Bakken formation is one of the highest-cost sources of U.S. production. The fall in oil prices to below $50 a barrel has forced many operators to reduce or halt drilling of new wells and shut in production from some existing wells. State figures show that North Dakota sweet crude recently traded around $33 a barrel, which is below the profitability break-even point for some wells in less-prolific parts of the Bakken and other shale-oil plays. There are 27 drilling rigs, a barometer of future production, active in the state, down from 29 in April and matching a low for rigs at work in oil fields in October 2005. At its peak, North Dakota had 218 rigs drilling in May of 2012. Meanwhile, natural-gas production in North Dakota rose 1.2% in March to a record 1.70 billion cubic feet a day, reflecting a sharp falloff in the amount of natural gas burned off, or flared, at well sites. State data show that operators flared 9.7% of the natural-gas produced in March, the first dip below the 10% level since December 2007. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil fields; Natural gas; Petroleum production
Location: United States--US North Dakota
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788342572
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788342572?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Brazil's Petrobras Swings to a Loss; Troubled state-run oil company lost $340 million as revenue declined
Author: Connors, Will
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 May 2016: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--Brazil's troubled state-run oil company Petróleo Brasileiro SA reported Thursday a first-quarter loss of 1.2 billion reais ($340 million) from a net profit of 5.3 billion reais in the same period a year earlier, hit by a drop in oil production and weaker domestic fuel sales amid Brazil's worst recession in decades. Revenue declined 5.4% from the first quarter of 2015 to 70.3 billion. Petrobras's operating results also fell. Earnings before interest, taxes, depreciation and amortization, a measure of cash flow known as Ebitda, declined 2% to 21.1 billion reais, after adjusting for nonrecurring impacts. After reporting in March the company's biggest quarterly loss ever , when it wrote off 49.75 billion reais ($13.79 billion) in assets and investments, investors were looking for any signs of progress on a more than year-old revitalization plan under chief executive Aldemir Bendine. Mr. Bendine, who didn't appear at a news conference announcing the first quarter results, may not be in his post much longer. On Thursday Brazil's Senate voted that President Dilma Rousseff should face an impeachment trial, handing the presidency, at least temporarily, to Vice President Michel Temer. Mr. Temer announced a new cabinet Thursday, and has said he has executives in mind to take the helm at Brazil's state-run companies. The chief executive job at government-owned Petrobras is one of the more high profile jobs in the country and generally changes along with changes in Brazil's political leadership. Ivan Monteiro, Petrobras' chief financial officer, deflected questions Thursday about the political shake up in Brasília, saying that the company is "completely focused" on its results and delivering good returns to shareholders. Petrobras is slashing investment spending and has worked to sell off numerous assets. Earlier this month Petrobras sold parts of its assets in Chile and Argentina for a combined $1.4 billion , part of a $15.1 billion divestment program. On Thursday Petrobras said it had entered into exclusive talks with Canada's Brookfield Asset Management, Inc. to sell its gas pipeline unit Nova Transportadora do Sudeste (NTS). It didn't disclose terms of the potential sale. Talking about asset sales, Mr. Monteiro compared Petrobras to a patient with high cholesterol who has to start living a "more healthy life." The company still has a long way to go to slice into its industry-leading debt load. The company's total debt in the first quarter was $126.4 billion. Write to Will Connors at william.connors@wsj.com Credit: By Will Connors
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 12, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788365218
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788365218?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Oil Glut to Shrink Despite Iranian Output Surge, IEA Says; Oil watchdog sees global stocks falling 200,000 barrels a day in the last six months of 2016
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
In April, non-OPEC production fell 125,000 barrels a day to 56.6 million barrels a day as planned and unplanned outages add to declines caused by lower oil prices and spending cuts.
Full text: Iran's oil production has risen faster than expected, reaching levels not seen since before Western sanctions were tightened in 2011, but a global oversupply of crude is still shrinking, the International Energy Agency said Thursday. The Islamic Republic ramped production up by 300,000 barrels a day month-on-month in April, hitting 3.56 million barrels a day, according to the IEA's closely watched monthly oil-market report. The output is now at levels not seen since international sanctions were extended to curb the country's nuclear program. Iranian exports increased at greater rate, with preliminary data suggesting a month-on-month rise of 600,000 barrels a day to about 2 million barrels a day. However, the dramatic increase from 1.4 million barrels a day seen the previous month, may have been helped by loadings that spilled over from March , the Paris-based agency said. China was Iran's largest customer, importing 800,000 barrels a day of crude. Despite the strength of Iran's rebound, global oil markets are moving closer to balance in the second half of the year as unplanned disruption to production in countries such as Canada and Nigeria are helping to run down a global overhang of crude inventories. Related * Oil Prices Rise After IEA Report * Glencore, Vitol Near Deal to Buy Iranian Crude Global oil stocks will diminish to 200,000 barrels a day in the last six months of the year from 1.3 million in the first half, it said. The IEA has previously projected supply will exceed demand by an average of 1.5 million barrels a day in the first six months of 2016. "Further oil price rises, though, are likely to be limited by brimming crude oil and products stocks that will remain a feature of the market until more normal levels of inventory are reached," it said. Production outside the Organization of the Petroleum Exporting Countries will decline by 800,000 barrels a day this year, the adviser to industrialized nations said, an acceleration from the previous forecast for a drop of 710,000. In April, non-OPEC production fell 125,000 barrels a day to 56.6 million barrels a day as planned and unplanned outages add to declines caused by lower oil prices and spending cuts. Output is expected to drop further in May due to the wildfires in Canada, it said. The IEA maintained its forecast for global demand growth broadly at 1.2 million barrels a day for this year, but said the risks to future forecasts lay to the upside. "Any changes to our current 2016 global demand outlook are now more likely to be upward than downward, as gasoline demand grows strongly in nearly every key market, more than offsetting weakness in middle distillates," the IEA said. OPEC's April output rose by 330,000 barrels a day in April to 32.76 million barrels a day, its highest level since 2008, on higher supplies from Iran, Iraq and the United Arab Emirates, which more than offset outages in Kuwait and Nigeria, the IEA said. The grouping's April output is about 500,000 barrels a day more than the average required for this year, the report showed. Saudi Arabia's output was steady in April near 10.2 million barrels a day, it said. Write to Summer Said at summer.said@wsj.com Credit: By Summer Said
Subject: Supply & demand; Cartels; Crude oil prices; Petroleum production
Location: Iran Nigeria Canada
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788386168
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788386168?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permissio n of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall as Oversupply Worries Trump Bullish IEA Report; July Brent crude fell $0.45 to $47.63 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
" "China will remain to a bright spot for crude oil market due to strong appetite by the local private refineries as well as the government's effort to fill up the strategic petroleum reserve," said Barnabas Gan, an OCBC commodities analyst and economist, adding that the decline in prices Friday was mainly driven by profit-taking.
Full text: Crude oil prices were down in early Asian trade Friday on profit-taking as worries over possible production increases outweighed a bullish outlook report released by the International Energy Agency yesterday. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $46.11 a barrel at 0136 GMT, down $0.59 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.45 to $47.63 a barrel. Oil prices settled at a fresh six-month high overnight after the world's top energy watchdog said global oil stocks would undergo a "dramatic reduction" in the second half of the year to 200,000 barrels a day from 1.3 million barrels a day in the first six months of the year. On demand, the agency stood pat on its 2016 global demand growth forecast at 1.2 million barrels day, but said strong demand from India and China means any future changes to its estimates "are now more likely to be upward than downward." "China will remain to a bright spot for crude oil market due to strong appetite by the local private refineries as well as the government's effort to fill up the strategic petroleum reserve," said Barnabas Gan, an OCBC commodities analyst and economist, adding that the decline in prices Friday was mainly driven by profit-taking. However, some analysts worry the rise in prices could encourage oil producers to ramp up production, resulting in more pressure on prices. "The higher the price goes, the less likely an agreement to cap production," said Tim Evans, an energy analyst at Citi Futures, adding that producers might see the market as rebalancing on its own. He said that higher prices could tempt Saudi Arabia, OPEC's largest producer, to boost output to cover its peak summer power demand rather than pare exports. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 115 points to $1.5718 a gallon, while June diesel traded at $1.3858, 82 points lower. ICE gasoil for June changed hands at $414.25 a metric ton, up $3.25 from Thursday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil; Crude oil prices; Profits; Production increases
Location: China
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788388337
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788388337?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Crude Prices Fall as Investors Take Profits; Oil hit six-month high on Thursday following bullish report from IEA
Author: Puko, Timothy; Baxter, Kevin; Hsu, Jenny W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
Mr. Poulsen, oil risk manager at the Copenhagen-based Global Risk Management, predicted volatile trading on Friday and said the price of Brent could swing back into territory and hit $49 a barrel.
Full text: Crude oil prices fell on Friday as investors took profits following Thursday's steep gains and the dollar added to its recent rally. Light, sweet crude for June delivery settled down 49 cents, or 1%, at $46.21 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 25 cents, or 0.5%, to $47.83 a barrel on ICE Futures Europe. Both finished the week higher. Nymex oil rose 3.5%, its 10th winning week in the past 13. Brent gained 5.4%, its fifth gain in the past six weeks. That string of gains peaked at fresh six-month highs on Thursday in part from a bullish report on supply and demand from the Paris-based International Energy Agency. It focused on recent supply outages and strong demand world-wide, which helped revive oil's rally in the past week. But many of those supply disruptions are temporary, analysts said. Some production is already ramping back up from a wildfire-related slowdown in Canada, making it unlikely these disruptions can undo an oversupply that has lingered for about two years, analysts said. With those outages now fully accounted for, it made Friday a logical time for some to cash out winning bets, said Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates. "A lot of the short-term traders went to the bank today," said Donald Morton, senior vice president at Herbert J. Sims & Co., who runs an energy-trading desk. Oil's decline started overnight as the dollar rose, a broker and analyst said. Oil is commonly influenced by dollar trading. A stronger dollar can lead to weaker prices for dollar-denominated commodities by making them more expensive for traders using other currencies. Some said the market is gearing up for a big move in one direction or the other. The market is still very popular among momentum- and algorithm-based traders and is likely to next move either $7 to $8 a barrel up or down, Mr. Morton added. Mr. Morton and others believe a fall could happen because production and inventories are still so high. The Organization of the Petroleum Exporting Countries climbed in April to 32.76 million barrels a day, the highest since April 2008, the IEA had said. OPEC itself on Friday said its production hit 32.44 million barrels in April, a 188,000-barrel increase from the prior month, all from Iran. The rise in Iran's oil production and exports after the lifting of international sanctions has been faster than expected, IEA said. Iran increased daily oil output by 300,000 barrels in April to 3.56 million barrels a day, a level last achieved in November 2011. OPEC said that production was just 3.45 million barrels a day, up 198,000 barrels from the month prior. "The current huge surplus has been able to easily absorb the disruption" from Canada, Mr. Ritterbusch said in a note. Despite Friday's falls, the next move is likely up, said Michael Poulsen, oil risk manager at the Copenhagen-based Global Risk Management. He predicted volatile trading on Friday and said the price of Brent could swing back into territory and hit $49 a barrel. Mr. Poulsen, oil risk manager at the Copenhagen-based Global Risk Management, predicted volatile trading on Friday and said the price of Brent could swing back into territory and hit $49 a barrel. Mr. Poulsen cites production outages in Canada and Nigeria as factors which will likely continue to dominate the short-term outlook in oil. Canadian oil production has been hit by a wildfire in the country's crude rich province of Alberta And Middle East producers have been buoyed by strong demand from the region's largest crude oil customers, China and India. The IEA forecasts that both countries will drive global consumption growth in 2016. "China will remain a bright spot for crude oil market due to strong appetite by the local private refineries as well as the government's effort to fill up the strategic petroleum reserve," said Barnabas Gan, an OCBC commodities analyst and economist. Gasoline futures rose 0.49 cent, or 0.3%, to $1.5882 a gallon. Diesel futures rose 0.91 cent, or 0.7%, to $1.4031 a gallon. Benoit Faucon contributed to this article. Write to Timothy Puko at tim.puko@wsj.com , Kevin Baxter at Kevin.Baxter@wsj.com and Jenny W. Hsu at jenny.hsu@wsj.com Credit: By Timothy Puko, Kevin Baxter and Jenny W. Hsu
Subject: Supply & demand; Risk management; Crude oil prices; Petroleum production
Location: Canada
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788513485
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788513485?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
OPEC Sees Rival Oil Production Declining as Markets Rebalance; The reduction in non-OPEC production is cushioning the effect of the cartel's rising output
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
[...]the glutted oil market has started to even out, OPEC's data shows.
Full text: Shrinking U.S. output and massive cuts to investment in new projects will reduce the global oil glut over the course of this year, the Organization of the Petroleum Exporting Countries said Friday, potentially pushing world-wide oil production lower than demand in 2017. OPEC forecast that production by countries outside the cartel will help rebalance a global crude market that is seen prices fall by more than half since 2014, even though OPEC has declined to rein in its own production. OPEC said in its monthly report that non-OPEC production will fall by 740,000 barrels a day from 2015 to 56.4 million barrels a day this year--10,000 barrels a day less than OPEC previously predicted. Most of the decline will stem from cuts that U.S. oil producers are making to cut production that is become unprofitable with the oil-price rout. "Outside the U.S., there have been consistent signs of declines in non-OPEC production, which should likely flip the global oil market into a net deficit in 2017," OPEC said. OPEC forecast U.S. production this year will fall by 431,000 barrels a day from 2015 to 13.56 million barrels a day. The rest of the predicted non-OPEC decline will come from lower investments and production delays in China, Mexico, the U.K., Kazakhstan and Colombia. Overall, oil companies world-wide will cut their exploration and appraisal investments during 2016, 2017 and 2018 to $40 billion annually, half the average annual spending of 2012 through 2014, the group said. The reduction in non-OPEC production is cushioning the effect of OPEC's rising output. A meeting between countries in April to discuss a production freeze collapsed after Saudi Arabia said it would only limit its production if Iran did too , according to officials from Saudi Arabia and other countries involved in the talks. Iran, which was released in January from international sanctions curbing its oil sales, hasn't agreed to production limits. Its oil output in April was 3.45 million barrels a day--up 198,000 barrels from a month earlier, OPEC said. That accounted for the cartel's entire output boost from March. Overall OPEC production last month was up 188,000 barrels a day, to 32.44 million barrels, from a month earlier. OPEC said its higher output will be absorbed by rising global oil demand, which it predicted to increase by 1.2 million barrels a day from last year to 94.18 million barrels a day in 2016. As a result, the glutted oil market has started to even out, OPEC's data shows. Global oil oversupply halved to 950,000 barrels a day, based on OPEC's production numbers in April, compared with overproduction of 2.13 million barrels a day in 2015. The news came after the International Energy Agency said Thursday that a global glut had started to diminish . Worldwide oil stocks will fall to 200,000 barrels a day in the last six months of the year from 1.3 million in the first half, it said. The IEA has previously projected supply will exceed demand by an average of 1.5 million barrels a day in the first six months of 2016. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Cartels; Supply & demand; Petroleum production
Location: Iran United States--US Saudi Arabia
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788513557
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788513557?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright o wner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Dai's Take: Why It Is Hard to Assess Losses From Shale Plays; The number and pace of bankruptcy filings by oil and gas companies--some of them backed by private equity shops--are unprecedented. However, it may be too early to evaluate financial losses.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
[...]commodity prices hit a bottom and begin to stabilize and rebound, it's probably too early to assess firms' losses.
Full text: Welcome to the new WSJ Pro PE Check out our new website, http://www.wsj.com.ezproxy.uta.edu/pro/privateequity , for data, infographics and a 10-year archive of stories. Why It Is Hard to Assess Losses From Shale Plays One of the most baffling questions I face as a journalist covering private equity investment in the oil patch is exactly how much private equity firms stand to lose from the commodity price slump. My colleagues and I have written about dozens of bankruptcies involving oil and gas exploration and production companies this year, some of which are backed by private-equity shops. In some ways, the U.S. oil industry has been a victim of its own success, as increased production helped push down prices. In his newly-published book, "The Green And The Black," Gary Sernovitz, novelist and a managing director in charge of investor relations at private-equity firm Lime Rock Partners, compared the shale revolution to technology-driven disruptions. Mr. Sernovitz wrote that the massive unlocking of U.S. shale plays, while creating winners and lowering costs, "has also led to the destruction of a lot of capital at both conventional assets, second-tier shales, and oil-field service companies." The gains in energy funds since 2004 "have not compensated for the companies hurt by lower prices," Mr. Sernovitz wrote. His views are borne out by data from research firm Cambridge Associates. The data show that natural-resources funds with vintage years of 2004 and later have generated median net internal rates of return of no more than 6% since inception, lower than an 8% hurdle rate a typical private equity fund would guarantee its investors. That is compelling because the mid-2000s marked the height of the U.S. shale gas and oil boom. It is hard to evaluate loss from the most recent downturn because oil prices are less than half of the levels in the summer of 2014, suggesting a long way towards recovery. Until commodity prices hit a bottom and begin to stabilize and rebound, it's probably too early to assess firms' losses. That's maybe an idea for a sequel from Mr. Sernovitz. FRIDAY, MAY 13 -- Teacher Retirement System of Texas MONDAY, MAY 16 -- Orange County Employees Retirement System MONDAY, MAY 16 -- California Public Employees' Retirement System Send us your tips, suggestions and feedback. Write to: Yolanda Bobeldijk ; Laura Cooper ; Chris Cumming ; Shasha Dai ; Jessica Davies ; Braden Kelner ; Laura Kreutzer ; Dawn Lim ; William Louch ; Mike Lucas ; Amy Or ; Becky Pritchard ; David Smagalla ; Chitra Vemuri . Follow us on Twitter: @YEBobeldijk , @LCooperReports , @ShashaDai1 , @JessicaMillsDav , @bradenkelner , @LauraKreutzer , @dawnmlim , @william_louch , @Lucastoons , @beckspritchard , @DSmagalla_DJ
Subject: Pension funds; Private equity; Acquisitions & mergers; Venture capital companies; Rates of return; Prices; Equity
Location: United States--US
Company / organization: Name: Teacher Retirement System-Texas; NAICS: 525110; Name: Orange County Employees Retirement System-California; NAICS: 525110; Name: Lime Rock Partners; NAICS: 523999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788527671
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788527671?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shell Moves to Contain Oil Spill in Gulf of Mexico; The likely cause of the sheen is a release of oil from subsea infrastructure, according to the company
Author: Sider, Alison; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
Royal Dutch Shell PLC said on Friday it has sent boats to clean up and contain an oil spill that leaked an estimated 2,100 barrels of crude oil into the Gulf of Mexico.
Full text: Royal Dutch Shell PLC said on Friday it has sent boats to clean up and contain an oil spill that leaked an estimated 2,100 barrels of crude oil into the Gulf of Mexico. Shell said it is coordinating with the U.S. Coast Guard and National Oceanic and Atmospheric Administration to work out a cleanup plan after isolating the leak and shutting off production from nearby wells. The company said its efforts so far include sending four response vessels as well as aircraft. The federal Bureau of Safety and Environmental Enforcement said on Friday that an initial damage assessment found that the oil was released from a subsea pipeline that carries the oil from the ocean floor to a production platform. A Shell helicopter spotted the spill on Thursday when an oily sheen appeared in the vicinity of four wells that sit along the seafloor in an oil field about 165 miles south-southwest of New Orleans, according to the federal agency . The agency, which regulates offshore oil activity, said the sheen was 2 miles by 13 miles. Oil from those wells flows through an underwater pipeline back to Shell's Brutus platform. Shell said Thursday that there was no drilling going on and the leak wasn't caused by a blowout. "The likely cause of the sheen is a release of oil from subsea infrastructure and in response, we have isolated the leak and shut-in production," the company said in a statement, adding that it didn't cause any injuries. "No release is acceptable, and safety remains our highest priority as we respond to this incident." In a statement published on the NOAA website Thursday, the Coast Guard said that the source of the leak "was reported as secured" and the cause of the incident is under investigation. Write to Alison Sider at alison.sider@wsj.com and Sarah Kent at sarah.kent@wsj.com Credit: By Alison Sider and Sarah Kent
Subject: Underwater pipelines; Oil fields; Oil spills
Location: Gulf of Mexico
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: National Oceanic & Atmospheric Administration--NOAA; NAICS: 924120; Name: Coast Guard-US; NAICS: 928110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788539409
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788539409?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon Mobil Says Nigerian Exports Hit After Pipeline Damage; Company declares 'force majeure' on Nigerian crude exports
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
In the past week, both Royal Dutch Shell PLC and Chevron Corp. have faced disruptions to their Nigerian output and the International Energy Agency said Thursday the country's oil production hit a two-decade low in April.
Full text: LONDON--Exxon Mobil Corp. on Friday said its exports of Nigerian crude had been disrupted after a drilling rig damaged multiple pipelines in the West African country. The incident is the latest blow for Nigeria's oil sector, which has been plagued by a series of outages caused by damage to the country's infrastructure. In the past week, both Royal Dutch Shell PLC and Chevron Corp. have faced disruptions to their Nigerian output and the International Energy Agency said Thursday the country's oil production hit a two-decade low in April. Exxon said the incident occurred on May 8 when a drilling rig owned by Depthwize Nigeria Ltd. and drilling on behalf of Conoil Producing Ltd. experienced mechanical difficulties and damaged Exxon's pipelines. The company said some of its production had been curtailed and declared force majeure, a move that gives it legal indemnity for being unable to fulfil its export obligations. Exxon didn't say how much oil was coming off line and wouldn't confirm the location of pipelines. The company operates the pipelines as a joint venture with Nigerian National Petroleum Corp. Exxon said it is working with NNPC to manage potential supply impacts, and with Depthwize to remove the rig and complete the damage assessment. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Pipelines; Petroleum production
Location: Nigeria
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788539909
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788539909?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil and Gas Giants to Join Wind-Energy Battle, Says Dong CEO; Henrik Poulsen says companies such as Shell and Total are flooding the wind-energy industry with fresh competition
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
While the investments of Europe's biggest energy companies in renewable energy represent only a tiny fraction of investments in their traditional oil and gas business, their interest in the sector marks their growing efforts to deal with investor concerns about climate change and growing global political commitment in the past two years to reduce carbon emissions.
Full text: LONDON--The offshore wind-energy industry will soon be flooded by competition as big oil companies join utilities and small renewable players in the growing sector, said the chief executive of the world's biggest offshore wind company, Dong Energy. Henrik Poulsen also said some new investment in offshore wind energy was coming from companies primarily associated with traditional oil and gas markets, like Royal Dutch Shell PLC, Eni SpA of Italy and Total SA France. "They have been hesitant," said Mr. Poulsen in an interview with The Wall Street Journal. "But I think they've come to a point where they're thinking 'Gee, maybe we should start mobilizing behind renewables, maybe the green transformation won't slow down.'" Dong was once one of Europe's most coal intensive utilities but the state-owned enterprise has steered its business away from coal and oil and gas extraction in the past decade toward offshore wind . The move has helped lift profits thanks to Europe's significant wind power subsidies. The company says it has a 26% share of the installed offshore wind-energy capacity in the world, more than twice as much as its nearest rival. Dong on Thursday announced its plans for an initial public offering this summer in what could be one of Europe's biggest stock market listings this year. The IPO is expected to consist of a sale of at least 15% of the company. The Danish government has a 58.8% stake in Dong but plans to retain a controlling stake of 50.1%. Other shareholders include Goldman Sachs, which has a 17.9% stake. Mr. Poulsen said he was bracing for more competition from bigger companies. "We're talking about huge companies with significant capital and execution power. We need to just keep sharpening our sword," he added. For instance, Dong is bidding against Shell, the Anglo-Dutch oil giant, for a contract to develop two 350-megawatt wind farms off the coast of the Netherlands. Shell said it had substantial expertise in the North Sea and in managing large projects and expected to be able to put its broader experience and capabilities to use in making the Netherlands project a success. This week Italy's Eni SpA said it plans to build renewable energy projects in Italy, Pakistan and Egypt, while French oil major Total SA has set up a natural gas, renewables and power division and this week announced a $1 billion acquisition of French high-technology battery company Saft. A spokeswoman said Total was committed to renewable energy. Norway's Statoil, which last year established a separate energy unit to capitalize on the growing renewable energy sector, said in April it had joined with with utility E. ON AG to develop an offshore wind farm off the coast of Germany. While the investments of Europe's biggest energy companies in renewable energy represent only a tiny fraction of investments in their traditional oil and gas business, their interest in the sector marks their growing efforts to deal with investor concerns about climate change and growing global political commitment in the past two years to reduce carbon emissions. "Oil and gas will remain import for decades to come, but growth in renewables will be steep and we believe we can take part in that growth and create value," a spokesman for Statoil said. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Subject: Offshore; Renewable resources; Alternative energy sources; Investments; Natural gas; Energy industry
Location: Europe Italy
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Eni SpA; NAICS: 324110, 211111; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788578138
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788578138?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Oil Rig Count Falls by Ten in Latest Week; The count continues a declining trend
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs rose by one in the latest week to 87.
Full text: The U.S. oil-rig count fell by 10 to 318 in the latest reporting week, according to oil-field services company Baker Hughes Inc., deepening an extended trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to tumble in 2014. The number of oil rigs in the U.S. peaked at 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs rose by one in the latest week to 87. The U.S. offshore-rig count was 22 in the latest week, down two from the previous week and down 12 from a year earlier. Crude oil prices fell on Friday as investors took profits following Thursday's steep gains and the dollar added to its recent rally. Oil hit fresh six-month highs on Thursday in part from a bullish report on supply and demand from the Paris-based International Energy Agency. It focused on recent supply outages and strong demand world-wide, which helped revive oil's rally in the past week. But many of those supply disruptions are temporary, and the market has effectively accounted for them, making this a logical time for some to cash out. U.S. crude was recently down 1.2% to $46.14 a barrel. Write to Ezequiel Minaya at ezequiel.minaya@wsj.com Credit: By Ezequiel Minaya
Subject: Supply & demand; Oil service industry; Crude oil prices
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788599331
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788599331?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Patch Claims More Victims; Exco Resources forms special committee to explore options, including bankruptcy
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
Two weeks ago, Ultra Petroleum Corp., a Rocky Mountains gas producer that once had a stock market value of more than $15 billion, filed for bankruptcy protection.
Full text: A bleak outlook from Exco Resources Inc. means more losses for big investors who tried to bolster the ailing oil-and-gas producer last year with a new, high-profile chairman. Exco's shares lost more than half their value Friday after the Dallas company said it hired advisers and formed a special committee to explore alternatives, including seeking bankruptcy protection, as relentlessly low oil and gas prices have hurt its business. Private-equity investor Wilbur Ross, Canadian insurance magnate Prem Watsa and Los Angeles investment firm Oaktree Capital Group LLC became Exco's top three shareholders when the stock was much higher. Together through vehicles they control, those investors owned roughly 43% of Exco's shares at end of 2015, according to securities filings. Exco had appeared to be bouncing back under the guidance of turnaround specialist C. John Wilder, who was installed as chairman in September. After bottoming at about 50 cents a share in August, Exco's stock had more than tripled through Thursday's close as the company was able to reduce its debt and cut spending. Friday, though, Exco made clear the progress hasn't been enough. It said the special committee would study various options, including swapping debt for stock, selling assets and restructuring, either in or out of court. "No assurance can be given as to the outcome or timing of this process," the company said. On Friday, Exco shares closed down 59%, to 73 cents. Exco's disclosure is the latest in a particularly painful run in the oil patch, as the 25% rise in U.S. oil prices this year and the 28% that natural gas has gained since hitting a 52-week low in early March have proved too little too late for some outfits. U.S.-traded oil settled at $46.21 on Friday, less than half the price from the summer of 2014. Natural gas closed at $2.096 a million British thermal units and hasn't traded above $3 in a year. Houston's Linn Energy LLC filed for bankruptcy protection on Wednesday with $7.7 billion of debt, and Penn Virginia Corp., founded in 1882 as a coal concern, filed Thursday under $1.2 billion of debt. Two weeks ago, Ultra Petroleum Corp., a Rocky Mountains gas producer that once had a stock market value of more than $15 billion, filed for bankruptcy protection. The tally of North American exploration-and-production companies that have filed for bankruptcy protection since the beginning of 2015 now exceeds 70, based on data from law firm Haynes and Boone LP. Exco was already struggling with high debt and low natural-gas prices before oil prices plunged in the second half of 2014. Mr. Ross, known for betting big on beleaguered companies, doubled down on Exco in 2014, staking $200 million on the company in which he had already invested $286 million. He and colleagues courted Mr. Wilder for over a year, hoping he would help steer a turnaround. Mr. Wilder had earlier led a revival at Texas power provider TXU Corp. before selling it in 2007 to a group of Wall Street firms in the largest-ever and ultimately doomed leveraged buyout. Laden with buyout debt and stung by low natural-gas prices, the company, now called Energy Future Holdings Corp., filed for bankruptcy protection in 2014. Mr. Wilder, who received a severance package valued at roughly $300 million from TXU, has more on the line at Exco than his reputation as the energy sector's Mr. Fix-It. As part of the deal to make him Exco's chairman, his Bluescape Resources Co. agreed to buy $23.5 million of Exco stock, making him the company's fourth-largest shareholder, securities filings show. An Exco spokesman didn't respond to requests for comment from the company and Mr. Wilder. Representatives for Messrs. Ross and Watsa didn't respond to requests for comment. Oaktree declined to comment. Mr. Ross and Oaktree, along with a few other big investors and Exco founder Douglas Miller, had unsuccessfully tried to take Exco private in 2010 near the height of the shale-drilling boom, offering $20.50 a share, or about $4.4 billion. Bets against Exco's stock, known as short interest, rose by at least 3.5 million shares Friday, said Ihor Dusaniwsky, managing director at short-sale tracker S3 Partners LLC, indicating investors believe the stock has further to fall. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Bankruptcy; Investments; Natural gas; Energy industry
Location: Los Angeles California
People: Wilder, C John
Company / organization: Name: Ultra Petroleum Corp; NAICS: 211111; Name: Penn Virginia Corp; NAICS: 211111; Name: Exco Resources Inc; NAICS: 211111; Name: Linn Energy LLC; NAICS: 211112
Publication title: Wall Street Journal (Onl ine); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788603405
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788603405?accountid=7117
Copyright: (c) 201 6 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
1923-2016; Howard Kauffmann Was Exxon President During Uproar Over Oil Prices; After a 39-year career in oil industry, executive ran small company making custom cabinets
Author: Hagerty, James R
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
Howard Kauffmann capped his 39-year career in the oil industry by serving as president of Exxon Corp., the world's largest oil company, at a time of public rage over soaring oil prices. After the war, he joined an affiliate of Standard Oil Co. of New Jersey, which later became Exxon and now is Exxon Mobil Corp. He spent nearly a decade overseas as an Exxon executive in Peru, Colombia and England, where he developed a taste for P.G. Wodehouse novels.
Full text: Howard Kauffmann capped his 39-year career in the oil industry by serving as president of Exxon Corp., the world's largest oil company, at a time of public rage over soaring oil prices. Mr. Kauffmann died May 3 of non-Hodgkin lymphoma at home in Atlanta. He was 93. His death came 16 days after that of his former boss, Clifton Garvin, chief executive of Exxon from 1975 to December 1986. "That was the time when the wheels fell off for the global oil companies," said Daniel Yergin, author of "The Prize," a history of the industry. Major oil companies lost much of their power in the 1970s as countries from Saudi Arabia to Venezuela nationalized oil fields. When prices surged and Americans sometimes had to wait for hours to get gasoline, many blamed Big Oil. Exxon was forced to defend itself, partly by noting that it couldn't control supply or demand. Mr. Garvin got so many abusive calls at home that he needed an unlisted number. When Mr. Kauffmann gave a commencement address in 1978, he said many people regarded his industry as "the source of all recent evil." Amid fears that the world was rapidly running out of crude, oil companies tried to diversify. In 1979, Exxon announced it had devised a synthesizer that would make electric motors far more efficient. The company also purchased Reliance Electric, a Cleveland-based maker of motors. Mr. Kauffmann said the deal would allow rapid introduction of Exxon's energy-saving device. But the synthesizer was later dropped when costs proved too high, and Exxon decided to sell Reliance in 1986. The company also experimented with solar energy and lithium-ion batteries. In the early 1980s, Exxon diversified into office equipment and made such products as Qwip fax machines and Qyx typewriters. That project also flopped, and Exxon exited those businesses in the mid-1980s. Other oil companies also floundered with acquisitions. Mobil Corp. bought Montgomery Ward, a struggling catalog retailer, in the mid-1970s but failed to revive it. Some politicians berated oil companies for diversifying and argued they should focus on finding more oil. Exxon invested in shale oil projects but concluded the costs were too high. The company eventually decided its cash flow far exceeded what it could sensibly spend on oil exploration or acquisitions. So it began spending billions of dollars buying back shares and raising dividends. Howard C Kauffmann was born on Feb. 25, 1923, in Tulsa, Okla. "We don't really know what the middle C stands for, if anything," said Lane Kauffmann, one of his sons, who added that the mysterious middle C was a family tradition. Howard Kauffmann's father, also named Howard C Kauffmann, worked in the oil industry, and the young Howard spent time in the oil fields during summer vacations. At the University of Oklahoma, he received a bachelor's degree in mechanical engineering in 1943. He then served in the Navy as an engineering officer aboard the USS Cleveland in the Pacific during World War II. After the war, he joined an affiliate of Standard Oil Co. of New Jersey, which later became Exxon and now is Exxon Mobil Corp. He spent nearly a decade overseas as an Exxon executive in Peru, Colombia and England, where he developed a taste for P.G. Wodehouse novels. In 1975, he was promoted to president. Mr. Kauffmann balanced his working life with Christian faith and a love of sports. He joined a small prayer group for senior executives in New York. He played tennis and once told a reporter he was "interested in any game that has a ball in it." Lane Kauffmann, his son, recalled that his father always came home before dark and was ready to throw or bat balls around with his sons. He occasionally had to take a business call at home but generally finished his work in the office. He rose early and "was a very efficient time manager," his son said. Just a year younger than Mr. Garvin, the CEO, Mr. Kauffmann was never well-positioned to reach the top job. In 1985, he received a bonus of $1.6 million, the current equivalent of $3.5 million, for retiring early at age 62. Mr. Kauffmann and his wife then built a home on Skidaway Island in Savannah, Ga. Rather than devoting himself entirely to golf and tennis, he invested in a local firm that made custom cabinets and helped run that business for several years. The former Exxon president even occasionally delivered cabinets to customers. When Hurricane Katrina struck the Gulf Coast in 2005, Mr. Kauffmann, then 82, joined a group of Baptist church volunteers who spent several days ripping moldy wallboard out of damaged homes. He also served on the boards of Pfizer Inc., United Technologies Corp. and other companies and was a director of nonprofits including the National Action Council for Minorities in Engineering. His survivors include his wife of 71 years, Suzanne McMurray Kauffmann, four children, seven grandchildren and one great grandchild. Write to James R. Hagerty at bob.hagerty@wsj.com Credit: By James R. Hagerty
Subject: Oil fields; Petroleum industry
Location: Atlanta Georgia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788622096
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788622096?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Exco Shares Lose More Than Half Their Value After Gloomy Outlook; Oil-and-gas producer forms special committee to explore options, including bankruptcy
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 May 2016: n/a.
Abstract:
Laden with buyout debt and stung by low natural gas prices, the company, now called Energy Future Holdings Corp., filed for bankruptcy protection in 2014.
Full text: A bleak outlook Friday from Exco Resources Inc. means more losses for big investors who tried to bolster the ailing oil-and-gas producer last year with a new, high-profile chairman. Exco shares lost more than half their value on Friday, after the Dallas company said it hired advisers and formed a special committee to explore alternatives, including seeking bankruptcy protection, as persistently low oil and gas prices have hurt its business. Private-equity investor Wilbur Ross, Canadian insurance magnate Prem Watsa and Los Angeles investment firm Oaktree Capital Group LLC became Exco's top three shareholders when the stock was much higher. Together, through vehicles they control, those investors owned roughly 43% of Exco's shares at year-end, according to securities filings. The company had appeared to be bouncing back under the guidance of turnaround specialist C. John Wilder, who was installed as chairman in September. After bottoming around 50 cents in August, Exco's shares had more than doubled through Thursday's close as the company was able to reduce its debt and slash spending. Early Friday, though, Exco made clear the progress hasn't been enough. It said the special committee would study various options, including swapping debt for stock, selling assets and restructuring, either in or out of court. "No assurance can be given as to the outcome or timing of this process," the company said. Mr. Ross recruited Mr. Wilder to join Exco. Mr. Wilder had earlier led a revival at Texas power provider TXU Corp. before selling it in 2007 to a group of Wall Street firms in the largest-ever and ultimately doomed leveraged buyout. Laden with buyout debt and stung by low natural gas prices, the company, now called Energy Future Holdings Corp., filed for bankruptcy protection in 2014. Mr. Wilder, who received a severance package worth roughly $300 million from TXU, has more on the line at Exco than his reputation as the energy sector's Mr. Fix-it. As part of the deal to make him the Dallas company's chairman, his Bluescape Resources Co. agreed to buy $23.5 million of Exco stock, making him the company's fourth largest shareholder, securities filings show. Mr. Ross and Oaktree, along with a few other big investors and Exco founder Douglas Miller, had unsuccessfully tried to take Exco private in 2010 near the height the shale-drilling boom, offering $20.50 a share, or about $4.4 billion. On Friday, Exco shares closed down 59% at 72 cents. Short interest in Exco grew by 3.5 million shares Friday, said Ihor Dusaniwsky, managing partner at short-sale tracker S3 Partners LLC, as investors barreled into bets that the stock will fall further. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Bankruptcy; Investments; Energy industry; Natural gas prices
Location: Los Angeles California
People: Wilder, C John
Company / organization: Name: Exco Resources Inc; NAICS: 211111; Name: Energy Future Holdings Corp; NAICS: 221122, 221210; Name: TXU Corp; NAICS: 221122, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 13, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789016685
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789016685?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Patch Claims More Victims --- Exco shares tank after energy firm says it will explore options, a hit to some big investors
Author: Dezember, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 May 2016: B.1.
Abstract:
Two weeks ago, Ultra Petroleum Corp., a Rocky Mountains gas producer that once had a stock market value of more than $15 billion, filed for bankruptcy protection.
Full text: A bleak outlook from Exco Resources Inc. means more losses for big investors who tried to bolster the ailing oil-and-gas producer last year with a new, high-profile chairman. Exco's shares lost more than half their value Friday after the Dallas company said it hired advisers and formed a special committee to explore alternatives, including seeking bankruptcy protection, as relentlessly low oil and gas prices have hurt its business. Private-equity investor Wilbur Ross, Canadian insurance magnate Prem Watsa and Los Angeles investment firm Oaktree Capital Group LLC became Exco's top three shareholders when the stock was much higher. Together through vehicles they control, those investors owned roughly 43% of Exco's shares at end of 2015, according to securities filings. Exco had appeared to be bouncing back under the guidance of turnaround specialist C. John Wilder, who was installed as chairman in September. After bottoming at about 50 cents a share in August, Exco's stock had more than tripled through Thursday's close as the company was able to reduce its debt and cut spending. Friday, though, Exco made clear the progress hasn't been enough. It said the special committee would study various options, including swapping debt for stock, selling assets and restructuring, either in or out of court. "No assurance can be given as to the outcome or timing of this process," the company said. On Friday, Exco shares closed down 59%, to 73 cents. Exco's disclosure is the latest in a particularly painful run in the oil patch, as the 25% rise in U.S. oil prices this year and the 28% that natural gas has gained since hitting a 52-week low in early March have proved too little too late for some outfits. U.S.-traded oil settled at $46.21 on Friday, less than half the price from the summer of 2014. Natural gas closed at $2.096 a million British thermal units and hasn't traded above $3 in a year. Houston's Linn Energy LLC filed for bankruptcy protection on Wednesday with $7.7 billion of debt, and Penn Virginia Corp., founded in 1882 as a coal concern, filed Thursday under $1.2 billion of debt. Two weeks ago, Ultra Petroleum Corp., a Rocky Mountains gas producer that once had a stock market value of more than $15 billion, filed for bankruptcy protection. The tally of North American exploration-and-production companies that have filed for bankruptcy since the beginning of 2015 now exceeds 70, based on data from law firm Haynes and Boone LP. Exco was already struggling with high debt and low natural-gas prices before oil prices plunged in the second half of 2014. Mr. Ross, known for betting big on beleaguered companies, doubled down on Exco in 2014, staking $200 million on the company in which he had already invested $286 million. He and colleagues courted Mr. Wilder for over a year, hoping he would help steer a turnaround. Mr. Wilder had earlier led a revival at Texas power provider TXU Corp. before selling it in 2007 to a group of Wall Street firms in the largest-ever and ultimately doomed leveraged buyout. Laden with buyout debt and stung by low natural-gas prices, the company, now called Energy Future Holdings Corp., filed for bankruptcy protection in 2014. Mr. Wilder, who received a severance package valued at roughly $300 million from TXU, has more on the line at Exco than his reputation as the energy sector's Mr. Fix-It. As part of the deal to make him Exco's chairman, his Bluescape Resources Co. agreed to buy $23.5 million of Exco stock, making him the company's fourth-largest shareholder, securities filings show. An Exco spokesman didn't respond to requests for comment from the company and Mr. Wilder. Representatives for Messrs. Ross and Watsa didn't respond to requests for comment. Oaktree declined to comment. Mr. Ross and Oaktree, along with a few other big investors and Exco founder Douglas Miller, had unsuccessfully tried to take Exco private in 2010 near the height of the shale-drilling boom, offering $20.50 a share, or about $4.4 billion. Bets against Exco's stock, known as short interest, rose by at least 3.5 million shares Friday, said Ihor Dusaniwsky, managing director at short-sale tracker S3 Partners LLC, indicating investors believe the stock has further to fall. Credit: By Ryan Dezember
Subject: Bankruptcy reorganization; Natural gas; Energy industry
Location: Los Angeles California
People: Wilder, C John
Company / organization: Name: Exco Resources Inc; NAICS: 211111
Classification: 8510: Petroleum industry; 3100: Capital & debt management; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: May 14, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789006311
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789006311?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi Arabia, Gulf Neighbors Suffer Ratings Downgrades on Oil Slump; Moody's cuts credit ratings of Saudi Arabia, Oman and Bahrain
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 May 2016: n/a.
Abstract:
Some of these countries have responded by implementing measures including cutting spending, raising taxes, reducing subsidies, issuing debt and drawing down their foreign reserves that they accumulated in recent decades when oil prices were higher.
Full text: DUBAI--Saudi Arabia and two of its oil-exporting neighbors in the Persian Gulf had their debt ratings cut by Moody's Investors Service, as the slide in crude prices continued to afflict the region's economies. The ratings firm during the weekend downgraded Saudi Arabia's long-term issuer ratings by a notch to A1 from Aa3 but maintained its stable outlook on the kingdom. Oman's credit rating was reduced by a notch to Baa1, while Bahrain was cut to Ba2. The collapse in energy prices from their peaks in the middle of 2014 has hit hard the Gulf economies that rely heavily on the sale of oil to fund large-scale infrastructure projects to accommodate their fast-growing populations. Some of these countries have responded by implementing measures including cutting spending, raising taxes, reducing subsidies, issuing debt and drawing down their foreign reserves that they accumulated in recent decades when oil prices were higher. In the case of Saudi Arabia, whose economy is the largest in the Arab world, the country's budget deficit ballooned to nearly $100 billion in 2015 because of the plunge in oil revenues. Simultaneously, its foreign reserves dropped by more than $155 billion from a peak in 2014 to below $600 billion in March, according to government data. Moody's expects those foreign reserves to decline even further until 2019 to $460 billion. It also estimates the Saudi budget deficit to average 9.5% of its gross domestic product each year between 2016 and 2020, a shortfall that will require $324 billion in financing. "A combination of lower growth, higher debt levels and smaller domestic and external buffers leave the Kingdom less well positioned to weather future shocks," said Moody's. Saudi Arabia borrowed $10 billion from international banks last month and is widely expected to issue more debt later this year. But its strongest response so far to the new economic challenges is a raft of reforms announced last month , dubbed Vision 2030, aimed at reducing the country's dependence on oil. The economic overhaul involves listing part of state-owned energy giant Saudi Arabia Oil Co., known as Aramco, but also promoting non-oil industries and making the country more attractive to foreign investors. Moody's said that without any of those reforms, Saudi Arabia's financial troubles would continue to intensify. It said the country's efforts at diversifying its economy, even if only partially successful, would improve the country's creditworthiness. At the same time, Moody's said those plans are still at an embryonic stage and their "impact remains unclear." Moody's had previously changed its outlook on Saudi Arabia's banking sector to negative and put the country's credit rating on review for a potential downgrade. Rival ratings firm Standard & Poor's preceded Moody's in February by lowering Saudi Arabia's rating to A-minus, also citing the impact of low oil prices. Bahrain and Oman don't have the same financial firepower as their Persian Gulf neighbors. Moody's said Bahrain's creditworthiness will continue to weaken despite efforts by the country to reduce spending. In Oman, the government's strategy to tap international debt markets may trigger more spending cuts or put pressure on the state's remaining savings. Separately, Moody's didn't downgrade but assigned a so-called negative outlook to other Persian Gulf states the United Arab Emirates, Qatar and Kuwait, also to reflect the impact of low oil prices. Write to Nicolas Parasie at nicolas.parasie@wsj.com Corrections & Amplifications Standard & Poor's lowered Saudi Arabia's credit rating to A-minus in February. An earlier version of this article incorrectly said it made the rating change last month. (May 15) Credit: By Nicolas Parasie
Subject: Credit ratings; Ratings & rankings; Budget deficits; Economic growth; Gross Domestic Product--GDP
Location: Bahrain Oman Saudi Arabia
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788817414
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788817414?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Big Oil's Big Plans for New Gas Markets; Producers hope to create new markets to boost demand to drag LNG prices out of the doldrums
Author: Stewart, Robb M
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 May 2016: n/a.
Abstract:
PERTH, Australia--Natural gas transported across the world's oceans by ship has helped to displace coal burned in European power plants and Chinese household cookers. Energy Department data show there are about 75 LNG fueling stations around the U.S. Maarten Wetselaar, director of Shell's integrated gas division, said global fuel demand from ships and vehicles is equal to more than 700 million tons of LNG demand a year.
Full text: PERTH, Australia--Natural gas transported across the world's oceans by ship has helped to displace coal burned in European power plants and Chinese household cookers. Now, producers want it to become a fuel for cruise liners, container ships and road trucks. In doing so, Big Oil hopes to boost demand by enough to drag prices of liquefied natural gas out of the doldrums. LNG prices last month sank to a seven-year low in Asia as demand failed to keep up with rising supply from countries including the U.S. and Australia. Wood Mackenzie, a U.K.-based consultancy, expects the global gas glut will take years to clear, with 70 million metric tons of LNG uncontracted by 2021. This downbeat outlook helps to explain why energy companies are continuing to seek new markets in LNG, even as they cut spending elsewhere. Royal Dutch Shell PLC recently signed a deal with cruise operator Carnival Corp. to provide LNG at major ports for AidaPrima, a recently launched liner. Woodside Petroleum Ltd. in April signed a five-year deal with Norway's Siem Offshore Inc. for Australia's first LNG-powered marine-support vessel that will operate along the northwest coast. "Companies are going to have to create new markets. We can't simply rely on buyers to supply it for us," said Peter Coleman, Woodside's chief executive. Global energy companies have invested heavily in massive production facilities that chill natural gas to a liquid so it can be exported. In Australia alone, Shell, Woodside and others have committed close to $200 billion on plants that have positioned the country to emerge as the leading LNG exporter in the coming years. Among those experimenting with LNG is Germany's Deutsche Post DHL Group. The mail and logistics group has around 150 vehicles able to run on both LNG and traditional motor fuels in the U.K. alone, from a standing start seven years ago. A company spokesman said it is currently considering introducing LNG-fueled vehicles throughout Europe for a customer. Colorado-based information and analytics provider IHS Inc. said last year that additional demand for LNG as a transport fuel could be critical in reducing oversupply. It forecast LNG demand in trucking and shipping, where it is still a relatively niche product, would grow to account for 10% of all traded LNG by 2030. Still, there are big challenges. The development of LNG as a transport fuel is being held back by a lack of infrastructure--places to refuel at ports or along highways. Converting trucks and vessels to handle the fuel is costly. On ships, LNG storage tanks need to be much larger than traditional containers even though liquefied gas is denser than diesel. Another big problem is the stubbornly low oil price. Noel Tomnay, Wood Mackenzie's head of gas and LNG research, said the industry's efforts to promote LNG had been slowed by the affordability of diesel and other transport fuels. Oil prices are around 50% lower than in July 2014. Energy companies are shouldering some of the risk. Shell has built LNG-refueling stations for trucks across North America and in countries such as the Netherlands to encourage fuel sales. Energy Department data show there are about 75 LNG fueling stations around the U.S. Maarten Wetselaar, director of Shell's integrated gas division, said global fuel demand from ships and vehicles is equal to more than 700 million tons of LNG demand a year. "So if we can secure only 10% of that heavy transport market, you are talking about 70 million tons of extra demand, that's almost as much as Japan, and there's no reason why over time it wouldn't go beyond," he said. Experts, however, have repeatedly tripped up when forecasting global gas demand growth. Four years ago, the International Energy Agency published a report heralding a "golden age of gas" led by China and India--hopes that have since largely fizzled out. Energy companies believe global efforts to rein in pollution will be a tailwind for LNG versus diesel. Engines running on LNG don't burp clouds of black smoke and run more quietly, an advantage for ships berthed at ports or trucks making nighttime deliveries in residential areas, they say. "One cruise liner with 7,000 to 8,000 people on board can use the same amount of fuel as a small city with a population of around 30,000. These ships are essentially floating power stations," Mr. Wetselaar said. Many buyers say the market holds promise. Yoon Namgoong, principal researcher at Korea Gas Corp., said LNG as a marine fuel is forecast to rise to as much as 13 million tons a year in 2020 and up to 64 million tons in 2030. Woodside, whose profit was almost wiped out last year by the oil-price slump and hefty impairment charges , is among companies positioning themselves for higher demand from shipping. It is building facilities that can store and transfer LNG to ships in the Australian port of Dampier. Dampier and nearby ports host massive ships carrying iron ore from Western Australian mines, which could be future LNG buyers. Shell already supplies LNG as fuel to ferries and fishing boats in Norway and other parts of Northern Europe, and is investing in a terminal and specialized bunker vessel in Rotterdam. Write to Robb Stewart at robb.stewart@wsj.com Credit: By Robb M. Stewart
Subject: LNG; Natural gas; Prices; Ports; Energy industry
Location: United States--US Asia Australia
Company / organization: Name: Woodside Petroleum Ltd; NAICS: 211111; Name: Carnival Corp; NAICS: 483112; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 15, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788901480
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788901480?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Where Oil Prices Go From Here; With political change in Saudi Arabia and the market rebalancing, look for $50 a barrel by the fall.
Author: Yergin, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 May 2016: n/a.
Abstract:
The oil business, he said, "is a free market that is governed by supply and demand and this is how we deal with the market." The day after his appointment, Mr. Falih stated that Saudi Arabia could well expand output "to its maximum sustainable capacity," from the current 10.2 million barrels a day to more than 12 million, a number that could go higher with new investment. [...]Saudi Arabia doesn't intend to give up one barrel of market share to an Iran that is ramping up its own exports now that economic sanctions have been lifted after the nuclear deal.
Full text: Leaders of major oil-exporting countries used to talk about "saving the oil" for their grandchildren. But now the grandchildren are in charge, and they want to monetize the oil. That is certainly so in Saudi Arabia, where Deputy Crown Prince Mohammed bin Salman--a grandson of the country's founder, Abdul Aziz ibn Saud--has launched an ambitious plan to reduce the country's dependence on oil. Decrees issued this month announced far-reaching changes in Saudi ministers and government organization. Yet the result could end up making Saudi Arabia, which now produces one out of eight barrels of the world's crude, an even bigger player in the global oil market. Prince Mohammed's Vision 2030 plan comes as the oil market is working back toward balance, having crashed to a low of $26 a barrel in February from $100 in 2014. Current prices in the mid-to-high $40s are signaling a turn in the market. And a turn is due. It has been 18 months since the November 2014 meeting when OPEC members made the historic decision to let market forces manage the market--in what became known as a "battle for market share." World production still exceeds consumption. Yet by autumn declining production and rising demand should put the market roughly in balance, with prices around $50 a barrel, although still with a big overhang in oil inventories. The effect of the oil-price collapse over the past two years can be seen in the postponement, delay or cancellation of multibillion-dollar exploration and production projects around the world. The latest report from my company, IHS, notes that 2015 marked the lowest level of new conventional oil discoveries since 1952. Even as prices fell during 2015, resilient and ingenious U.S. shale producers dramatically reduced costs and kept increasing output. But now even they have run out of running room. Some have gone bankrupt. For most, survival and protecting their balance sheets has become priority No. 1, and they have slashed investment. So U.S. total production is now falling--by later this year probably by more than a million barrels a day from the 9.7 million peak month of April 2015. Yet by 2020 world oil consumption could be 5.7 million barrels a day higher than this year's 95.6 million. So prices will have to rebound to provide the signal for new investment. U.S. shale will play an important role because it is "short cycle": New shale production can be brought on much more quickly than multibillion-dollar megaprojects that can require a decade or more. But a big part of the new demand is likely to be met by Saudi Arabia and other Gulf countries. And here is where the changing stance in Saudi Arabia--the "new new factor" in the oil market--will have a big impact. Among the decrees this month, Saudi Arabia announced the retirement of petroleum minister Ali al-Naimi, a commanding figure for two decades, and his replacement by the experienced CEO of Saudi Aramco, Khalid al-Falih. In his new job Mr. Falih will be in charge of petroleum and an expanded Ministry of Energy, Industry and Mineral Wealth, as it is thought that the country has significant, largely untapped reserves of minerals ranging from phosphates and uranium to gold. Continuity is clear in Saudi Arabia's deployment of this new market-forces policy that first emerged at the 2014 OPEC meeting. Prince Mohammed reaffirmed it in April. The oil business, he said, "is a free market that is governed by supply and demand and this is how we deal with the market." The day after his appointment, Mr. Falih stated that Saudi Arabia could well expand output "to its maximum sustainable capacity," from the current 10.2 million barrels a day to more than 12 million, a number that could go higher with new investment. Moreover, Saudi Arabia doesn't intend to give up one barrel of market share to an Iran that is ramping up its own exports now that economic sanctions have been lifted after the nuclear deal. The heightened tension between the two countries is a central factor in today's oil market. Yet change is clear in the Saudis' new orientation toward oil. After consolidating most of the Arabian Peninsula in the 1920s into the kingdom of Saudi Arabia, Ibn Saud depended overwhelmingly on rising receipts from the Haj, the annual pilgrimage to Mecca. When the flow of pilgrims collapsed with the Great Depression, so did the country's finances. The signing of an oil concession in 1933 with Standard Oil of California rescued the kingdom with upfront payments, and it has continued to live off the revenues from oil exports. But that strategy no longer works when 70% of the population is age 30 or younger and unemployment is officially 11.6%, and about 30% among young people. The new Saudi strategy is to use oil revenues to diversify the economy and build the world's largest sovereign-wealth fund as the investment engine for development. Ninety percent of the government's revenues came from oil between 2010 and 2014; with the fall in oil prices, it is temporarily down to about 80%. The new target is to increase non-oil government revenues at least sixfold by 2030. A key step is the proposed IPO of up to 5% of Saudi Aramco, by far the world's largest oil company. This shift is also driven by geopolitical forces--the rivalry with Iran, the need to blunt the appeal of jihadists, and the fraying of the Saudi-U.S. alliance. Saudi Arabia intends to bolster its role in the world and make itself a major force in global financial markets. The nation also wants to raise its status as a geopolitical player: As of 2015, Saudi Arabia had the world's third-largest military budget, trailing only the U.S. and China, and ahead of Russia. Achieving these goals in a traditional society in the designated time frame is challenging. Yet ironically, reducing dependence on oil cannot be achieved without reliable petroleum revenues. This means Saudi Arabia will seek to capitalize on its position as the world's lowest-cost producer to expand output and enhance the competitive position of its oil in what is destined to become an ever-more-competitive global energy market. Mr. Yergin, the vice chairman of IHS, is the author of "The Quest: Energy, Security, and the Remaking of the Modern World" (Penguin 2012). Credit: By Daniel Yergin
Subject: Oil consumption; Prices; Market shares
Location: California United States--US Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 15, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788908696
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788908696?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Libyan Oil Blockade Partially Lifted; Spokesman says domestic shipments from Marsa al-Hariga allowed to go to Libya's West
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 May 2016: n/a.
Abstract:
A National Oil Co. official in Tripoli said the two sides had acknowledged the need to resume domestic shipments to avoid damage to pipelines, avert a financial crisis and ensure power supplies wouldn't be interrupted.
Full text: Libya's divided oil officials have agreed to allow petroleum to flow again between the country's east and west but have yet to end a crisis that is blocking exports, Libyan officials said Sunday. The factions that control Libya's east will allow crude oil to be shipped to refineries in the west, a spokesman for the east said, the first step in resolving a dispute that has further eroded the country's ability to profit from its huge oil reserves. The eastern group had been blocking all shipments from the port of Marsa al-Hariga after the United Nations stopped it from exporting oil recently. Under Libyan law, enforced by the U.N., Libyan oil must be shipped via the country's official National Oil Co., which is based in the western capital of Tripoli. The east has formed its own national oil company and wants to export by its own means. A blockade on exports from Marsa al-Hariga will remain in effect until the two sides reach further agreement. Libya's production has collapsed to less that a quarter of its capacity of 1.5 million barrels a day following attacks by Islamic State and the sometimes violent conflict between factions in the eastern and western sections of the country. Libya became divided in the chaos that emerged from the 2011 ouster and death of dictator Moammar Gadhafi. A UN-backed peace effort resulted in a new unity government being installed in Tripoli, but the east has yet to recognize it and instead has tried to develop its own stream of revenue by exporting oil . On Sunday, Mustafa Sanallah, the chairman of the Tripoli-based National Oil Co., and Naji Almugrabi, the chief of the eastern company, signed a draft memorandum of understanding promising to end the impasse, according to Mr. Sanallah and a spokesman for Mr. Almugrabi. The main goal of the meeting is "to rescue the Libyan petroleum industry and fulfill the Libyan people's urgent needs," the spokesman for Mr. Almugrabi said. He added the MOU also proposed a unification of both companies and a single payment channel to the central bank. A National Oil Co. official in Tripoli said the two sides had acknowledged the need to resume domestic shipments to avoid damage to pipelines, avert a financial crisis and ensure power supplies wouldn't be interrupted. Any agreement among the oil officials would need to be approved by the parliament that rules the east. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Privatization; Shipments
Location: Libya
People: Qaddafi, Muammar El
Company / organization: Name: United Nations--UN; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788910821
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788910821?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
As Oil Reserves Dwindle, Russia Weighs Tax Increases to Fill Budget Gaps; Russian officials say the potential measures would take place after 2018, a presidential election year.
Author: Mills, Laura; Ostroukh, Andrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 May 2016: n/a.
Abstract:
The government has also announced a highly publicized privatization campaign, vowing to sell minority stakes in major state-controlled companies such as oil giant OAO Rosneft or VTB Bank, the country's second-largest lender.
Full text: MOSCOW--Russia is exploring a raft of potentially unpopular new tax measures in the coming years, government officials say, as the oil-dependent country runs out of ways to plug holes in the budget. Several Russian officials say the government is considering raising income-tax levels and increasing value-added tax but that any changes would only take place after 2018--a presidential election year. Any increase would be a sensitive issue in Russia, where real incomes shrank 9.5% in 2015 and the number of those living below the poverty line was projected to grow in 2016 at its fastest rate since the 1998 crisis, according to the World Bank. "Discussions are going on now about how not to look excessive and not to hit people too hard," said one official. While Russia has run budget deficits in the past, sanctions imposed after Moscow annexed the Black Sea peninsula of Crimea have changed that equation, making it tougher for Russia to borrow on international markets. Russian President Vladimir Putin himself has long favored minimal borrowing abroad and supported the idea of bringing the budget deficit to zero. While the government is now spending its oil reserves to shore up the budget, officials privately say that won't be enough to fill the gap between revenues and expenditures within just a few years. One official familiar with the matter said that the government was considering a progressive tax, under which income tax for richer Russians would rise from its current 13% flat rate. Another official said that the government was more likely to maintain a flat rate but raise it to 20%. Both officials said raising value-added tax was a likely option, but that any changes to the tax system would likely be postponed until after presidential elections in 2018. Buffeted by a precipitous slide in the price of oil, Russia's biggest export, and the Western sanctions, the country's gross domestic product shrank 3.7% in 2015 and is expected to contract again this year. Market players and international institutions such as the World Bank and the International Monetary Fund have since mostly praised Russia's government and central bank for their handling of the recession. Russia avoided creating a massive hole in its largely oil-dependent budget by allowing the ruble to depreciate by 60% against the dollar in 2015 alone, and held budget spending down. Officials say that while there is no final consensus and, ultimately, any decision would come from the political leadership, tougher cuts and tax increases may be on the horizon. Previously, Mr. Putin pledged that the government would refrain from tax increases amid a full-blown economic crisis. "The government promised not to raise taxes until 2018, and it has kept its word," said Alexander Machevsky, spokesman for First Deputy Prime Minister Igor Shuvalov. "After 2018 there will be a new government and the taxation could be revised. A progressive tax scale is being considered." So far, Russia has been able to rely on reserves built up over almost a decade of high oil prices to shore up the budget. But the Reserve Fund dropped to $44.9 billion this month--its lowest point in four years and down from about $90 billion two years ago. Russia has another oil fund, called the National Welfare Fund, which currently stands at $73.9 billion but which is used to fund pensions and long-term infrastructure projects, not the budget. That means that, while Russia can still fall back on reserves to cover this year's deficit--which Mr. Putin pledged to hold down to 3% of GDP, but which many analysts estimate will be at least 4%-- the government will have to look for alternative means of funding and cost-cutting, officials say. Russia has already introduced a tax on road usage for truck drivers late last year, a measure that sparked protests , and slashed health care and medical spending. Other sources of funding have been hard for Moscow to come by. Earlier this year, Russia said it was planning to borrow on the international market, but Western banks shied away from the Eurobond placement because of the sanctions. The government has also announced a highly publicized privatization campaign, vowing to sell minority stakes in major state-controlled companies such as oil giant OAO Rosneft or VTB Bank, the country's second-largest lender. While government officials expect the budget to be bolstered by funds from the privatization of at least three smaller companies, including up to 75% of the midsize oil producer Bashneft, they say there are few prospects the largest companies will be sold this year. Still, officials say they hope they will manage to avoid raising taxes with major spending cuts elsewhere. The government has already pushed through cuts to health care and education. Officials now publicly say they will have to raise the pension age to 65 from its current 55 for women and 60 for men, as well as eliminate pensions for those who are still working. The average life expectancy in Russia is around 65 for men and 77 for women. Thus far, the economic crisis hasn't dented Mr. Putin's approval rating, which hovers around 80%. Two officials said they hoped the pension overhaul would start being implemented gradually this or next year, but are prepared for resistance with upcoming parliamentary elections in September. "We hope it starts to get implemented next year, but we are all aware of the elections," said one official. "We need a political decision to be made as to what option is best." Credit: By Laura Mills and Andrey Ostroukh
Subject: Tax increases; Tax reform; Sanctions; Economic development; Budget deficits; Recessions; Funding; Flat rates; Progressive taxes
Location: Russia
Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120; Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 15, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788910823
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788910823?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Big Oil's Big Plans for New Gas Markets; Producers hope to create new markets to boost demand to drag LNG prices out of the doldrums
Author: Stewart, Robb M
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a.
Abstract:
PERTH, Australia--Natural gas transported across the world's oceans by ship has helped to displace coal burned in European power plants and Chinese household cookers. Energy Department data show there are about 75 LNG fueling stations around the U.S. Maarten Wetselaar, director of Shell's integrated gas division, said global fuel demand from ships and vehicles is equal to more than 700 million tons of LNG demand a year.
Full text: PERTH, Australia--Natural gas transported across the world's oceans by ship has helped to displace coal burned in European power plants and Chinese household cookers. Now, producers want it to become a fuel for cruise liners, container ships and road trucks. In doing so, Big Oil hopes to boost demand by enough to drag prices of liquefied natural gas out of the doldrums. LNG prices last month sank to a seven-year low in Asia as demand failed to keep up with rising supply from countries including the U.S. and Australia. Wood Mackenzie, a U.K.-based consultancy, expects the global gas glut will take years to clear, with 70 million metric tons of LNG uncontracted by 2021. This downbeat outlook helps to explain why energy companies are continuing to seek new markets in LNG, even as they cut spending elsewhere. Royal Dutch Shell PLC recently signed a deal with cruise operator Carnival Corp. to provide LNG at major ports for AidaPrima, a recently launched liner. Woodside Petroleum Ltd. in April signed a five-year deal with Norway's Siem Offshore Inc. for Australia's first LNG-powered marine-support vessel that will operate along the northwest coast. "Companies are going to have to create new markets. We can't simply rely on buyers to supply it for us," said Peter Coleman, Woodside's chief executive. Global energy companies have invested heavily in massive production facilities that chill natural gas to a liquid so it can be exported. In Australia alone, Shell, Woodside and others have committed close to $200 billion on plants that have positioned the country to emerge as the leading LNG exporter in the coming years. Among those experimenting with LNG is Germany's Deutsche Post DHL Group. The mail and logistics group has around 150 vehicles able to run on both LNG and traditional motor fuels in the U.K. alone, from a standing start seven years ago. A company spokesman said it is currently considering introducing LNG-fueled vehicles throughout Europe for a customer. Colorado-based information and analytics provider IHS Inc. said last year that additional demand for LNG as a transport fuel could be critical in reducing oversupply. It forecast LNG demand in trucking and shipping, where it is still a relatively niche product, would grow to account for 10% of all traded LNG by 2030. Still, there are big challenges. The development of LNG as a transport fuel is being held back by a lack of infrastructure--places to refuel at ports or along highways. Converting trucks and vessels to handle the fuel is costly. On ships, LNG storage tanks need to be much larger than traditional containers even though liquefied gas is denser than diesel. Another big problem is the stubbornly low oil price. Noel Tomnay, Wood Mackenzie's head of gas and LNG research, said the industry's efforts to promote LNG had been slowed by the affordability of diesel and other transport fuels. Oil prices are around 50% lower than in July 2014. Energy companies are shouldering some of the risk. Shell has built LNG-refueling stations for trucks across North America and in countries such as the Netherlands to encourage fuel sales. Energy Department data show there are about 75 LNG fueling stations around the U.S. Maarten Wetselaar, director of Shell's integrated gas division, said global fuel demand from ships and vehicles is equal to more than 700 million tons of LNG demand a year. "So if we can secure only 10% of that heavy transport market, you are talking about 70 million tons of extra demand, that's almost as much as Japan, and there's no reason why over time it wouldn't go beyond," he said. Experts, however, have repeatedly tripped up when forecasting global gas demand growth. Four years ago, the International Energy Agency published a report heralding a "golden age of gas" led by China and India--hopes that have since largely fizzled out. Energy companies believe global efforts to rein in pollution will be a tailwind for LNG versus diesel. Engines running on LNG don't burp clouds of black smoke and run more quietly, an advantage for ships berthed at ports or trucks making nighttime deliveries in residential areas, they say. "One cruise liner with 7,000 to 8,000 people on board can use the same amount of fuel as a small city with a population of around 30,000. These ships are essentially floating power stations," Mr. Wetselaar said. Many buyers say the market holds promise. Yoon Namgoong, principal researcher at Korea Gas Corp., said LNG as a marine fuel is forecast to rise to as much as 13 million tons a year in 2020 and up to 64 million tons in 2030. Woodside, whose profit was almost wiped out last year by the oil-price slump and hefty impairment charges , is among companies positioning themselves for higher demand from shipping. It is building facilities that can store and transfer LNG to ships in the Australian port of Dampier. Dampier and nearby ports host massive ships carrying iron ore from Western Australian mines, which could be future LNG buyers. Shell already supplies LNG as fuel to ferries and fishing boats in Norway and other parts of Northern Europe, and is investing in a terminal and specialized bunker vessel in Rotterdam. Write to Robb Stewart at robb.stewart@wsj.com Credit: By Robb M. Stewart
Subject: LNG; Natural gas; Prices; Ports; Energy industry
Location: United States--US Asia Australia
Company / organization: Name: Woodside Petroleum Ltd; NAICS: 211111; Name: Carnival Corp; NAICS: 483112; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788923455
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788923455?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Climb on Hopes of Smaller Supply; Brent crude gained $0.68 to $48.53a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a.
Abstract:
Crude oil prices rose higher in early Asian trade Monday, but analysts said gains were likely to be limited given a lack of catalysts to pull prices in either direction.
Full text: Crude oil prices rose higher in early Asian trade Monday, but analysts said gains were likely to be limited given a lack of catalysts to pull prices in either direction. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February last traded at $46.92 a barrel, up $0.71 in the Globex electronic session. Brent crude on London's ICE Futures exchange gained $0.68 to $48.53a barrel. Oil prices fell over the weekend due to profit-taking but ended the week higher. Nymex oil was on its 10th winning week in the past 13 weeks while Brent rose for five weeks in a row in the past six weeks. "Prices are definitely on an uptrend, but profit-taking will keep prices under $50 for a while unless there are any dramatic events that could help rebalance the market," Gao Jian, energy analyst at SCI International said. An overproduction of crude has been largely responsible for keeping oil prices in the doldrums in the past two years. Even though prices have climbed more than 80% after hitting its 13-year nadir back in February, they are still ways off from their mid-2014 levels when oil was trading above $100 a barrel. However, upbeat forecasts for faster demand growth and a deceleration in supply growth is helping to buoy sentiment. Last week, the International Energy Agency said global oil stocks will undergo a "dramatic reduction" in the second half of the year even though they will continue to increase in the first six months as Iran ramps up its production. Organization of the Petroleum Exporting Countries has offered similar views. The cartel now forecasts production by non-OPEC players will fall by 740,000 barrels a day from 2015 to 56.4 million barrels a day this year--10,000 barrels a day less then OPEC's previous estimates. Most of the cuts will come from U.S. shale producers who are sidelined amid low prices. OPEC forecast in its latest report that U.S. production this year will fall by 431,000 barrels a day from 2015 to 13.56 million barrels a day. A sign of the decrease in output was the eighth straight week of decline in U.S. oil-rig count by 10 to 318, for the week ended May 13. Apart from the U.S., the market will see few barrels from China, Mexico, the U.K., Kazakhstan and Colombia due to cuts in investments and production delays, OPEC said. In April, OPEC's crude production rose 188,000 barrels a day to average 32.44 million barrels a day. OPEC said its higher output will be absorbed by rising global oil demand, which it predicted to increase by 1.2 million barrels a day from last year to 94.18 million barrels a day in 2016. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Supply & demand; Crude oil; Price increases
Location: United States--US
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788926686
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788926686?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Treasury Yields Rise With Oil
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a.
Abstract:
Industrial & Commercial Bank of China, the nation's largest lender by assets, is selling U.S. dollar-denominated bonds via its Hong Kong branch, according to a term sheet seen by The Wall Street Journal.
Full text: Demand for safe-haven bonds retreats as U.S. oil futures hit fresh 2016 highs. Higher crude is seen by many as a sign of risk-taking, and it could also increase inflation risks--though price pressures in the U.S. remain contained amid uneven global economic growth. CPI is a key U.S. datapoint this week; it comes tomorrow. The April FOMC minutes are Wednesday while corporate supply is another focus this week. So far, new debt sales haven't pushed up Treasury yields as subzero ones overseas continue to push money into U.S. bonds. Following Friday's gains, the 10-year yield is at 1.726%; Friday set a 1-month low at 1.705%. Write to Min Zeng at min.zeng@wsj.com Credit: By Min Zeng
Subject: Bond issues; International finance; Banking industry
Location: United States--US Hong Kong
Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Standard Chartered Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Markets
Publisher: Dow Jon es & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1788981307
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1788981307?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Companies Are Still Paying Their CEOs to Pump; Many big production firms still base executives' bonuses largely on how much crude they find and extract
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a.
Abstract:
"Many shareholders hope that [bonuses] reflect the pain that investors are feeling in their portfolio values," said John Roe, managing director at ISS Corporate Solutions, a unit of investment adviser Institutional Shareholder Services Inc. Incentive pay in the oil patch helps explain why U.S. producers have been slow to dial down their output despite a global glut of crude and domestic natural-gas oversupply. Rewarding executives for growth at any cost is rooted in Wall Street's treatment of exploration and production shares as growth stocks. Since the advent of shale drilling more than a decade ago, analysts and investors tended to favor future prospects over profitability.
Full text: If investors hoped the biggest oil bust in decades would change the way oil industry executives are getting paid, they are probably disappointed. Many large production companies last year continued to incentivize their executives based, in large part, on how much crude they found and extracted, according to a Wall Street Journal review of filings from the largest U.S. energy producers. Executives received sizable cash bonuses for finding and producing more oil and gas than the year before, even though plummeting commodity prices made it unprofitable to keep drilling many wells. At Chesapeake Energy Corp., one of the country's largest producers, Chief Executive Doug Lawler received $1.56 million last year for exceeding production and reserve targets, securities filings show. That was more than half his total bonus of $2.69 million, according to the filings. Chesapeake's production rose 4.9% last year, more than twice its 2% target. But its earnings plummeted, and its stock lost 77%. A Chesapeake spokesman declined to comment. "There needs to be a more returns-focused element in this industry," said Paul Grigel, a Macquarie Group Ltd. senior analyst who tracks pay-policy changes among energy producers. "This is an issue for a lot of longer-term investors; it's something they're becoming very impassioned about." Mr. Grigel found that 14 of the 25 companies he studied either made no change in 2015, or didn't disclose the details of their bonus calculations. Four companies increased their emphasis on production and reserve growth last year, while seven lessened the importance of these factors. Exploration and production companies in recent proxy filings have disclosed their formulas that determined last year's cash bonuses. These will be followed by annual meetings, where shareholders will have a say on pay practices. Some corporate-governance observers warn that investors won't tolerate big bonuses based on increased production if earnings and share prices are down. "Many shareholders hope that [bonuses] reflect the pain that investors are feeling in their portfolio values," said John Roe, managing director at ISS Corporate Solutions, a unit of investment adviser Institutional Shareholder Services Inc. Incentive pay in the oil patch helps explain why U.S. producers have been slow to dial down their output despite a global glut of crude and domestic natural-gas oversupply. U.S. oil production has declined about 7% since peaking at a four-decade high of about 9.7 million barrels last year. Natural-gas output, meanwhile, has remained on an upward trajectory despite a yearslong price slump. Rewarding executives for growth at any cost is rooted in Wall Street's treatment of exploration and production shares as growth stocks. Since the advent of shale drilling more than a decade ago, analysts and investors tended to favor future prospects over profitability. The collapse in commodity prices has put that practice into question, though, as many companies struggle under debt they piled up acquiring land and drilling. Yet producers are hesitant to stop incentivizing growth all together. These companies' borrowing abilities hinge on how much oil and gas they have discovered but not yet extracted and sold. If they don't replace enough of the volumes they sell each year with new discoveries, they risk losing funding. Overall, bonuses, which usually account for less than a third of total compensation, broadly declined last year because low commodity prices crimped profits and sent stock prices tumbling. Continental Resources Inc., which drills in North Dakota and Oklahoma, reduced the weight given to production and reserve growth in its bonus math from 75% in 2014 to 34% last year, replacing its incentives to simply find more oil and gas with one aimed at keeping down the cost of doing so. Continental didn't respond to requests for comment. Approach Resources Inc., which idled rigs on its West Texas drilling land last year in response to low oil prices, eliminated reserve and production targets. It increased the importance of capital efficiency and debt relative to profits. In 2014, production and reserve goals accounted for a quarter of possible bonuses. "We made the decision, given commodity prices, that what was more important was achieving attractive rates of return with shareholder capital, preserving balance-sheet liquidity and living within cash flow," said Sergei Krylov, Approach's finance chief. Devon Energy Corp. in its proxy filing urged shareholders to reject a shareholder proposal to eliminate reserve growth metrics from its bonus formula. "Exploring for and developing undiscovered oil and natural-gas reserves is fundamental to the company's business and critical to its ability to build and sustain value," Devon said. The Oklahoma City company made production and reserve growth each worth 15% of possible bonuses, up from 10% and 5%, respectively, in 2014. Though Devon exceeded its production target, low commodity prices prompted the company to write down the value of its drilling fields by $19.2 billion last year as many of its drilling properties became uneconomical. That led to a net reduction of reserves. Missing its goal of adding the equivalent of 140.4 million barrels of oil to its reserves cost CEO David Hager more than $200,000, Devon's proxy shows. Mr. Hager's 2015 bonus was $1.55 million, about half what his predecessor earned the year before. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Profits; Rates of return; Commodities; Prices; Investments; Bonuses; Profitability; Natural gas; Petroleum production; Growth stocks
Location: United States--US
Company / organization: Name: Macquarie Group; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789005833
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789005833?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Prices Settle at 2016 High; Futures approach $50 a barrel as Goldman sees supply shortfall; supply disruptions in Canada and Nigeria coincide with strong demand from China and India
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a.
Abstract:
More Coverage * Energy Firms for Which Oil Rebound Came Too Late * Some Companies Still Pay CEOs to Pump The U.S. benchmark oil price jumped 3.3%, or $1.51, to close at $47.72 a barrel on the New York Mercantile Exchange.
Full text: NEW YORK--Oil prices rose to new 2016 highs Monday as production outages persisted and Goldman Sachs Group Inc. said the global glut of crude has turned into a deficit. Global oil production has exceeded demand for nearly two years, as countries including the U.S., Saudi Arabia and Russia pumped at full tilt. Inventories of crude around the world stand near record highs. But the oversupply has narrowed in recent weeks due to production outages in Canada , Nigeria and elsewhere and continued strong demand. Production has also started to decline in the U.S. as companies have slashed spending on new drilling. Goldman, which has been one of the most bearish banks on the oil price in recent months, said in a note dated Sunday that the recent outages have pushed the oil market into shortfall. The bank now expects oil prices to rise to $50 a barrel in the second half of the year, up from its April 22 forecast of prices trading between $40 and $45 in the second half. More Coverage * Energy Firms for Which Oil Rebound Came Too Late * Some Companies Still Pay CEOs to Pump The U.S. benchmark oil price jumped 3.3%, or $1.51, to close at $47.72 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, climbed 2.4%, or $1.14, to $48.97 a barrel on ICE Futures Europe. Both contracts settled at their highest levels since Nov. 3. Goldman shocked the market in September when it called for oil prices to fall as low as $20 a barrel before recovering. The bank remains somewhat negative on the outlook for the energy sector, saying that low-cost oil producers could push the market back into surplus by early 2017. Oil prices are up more than 20% this year, and sentiment among traders and analysts is increasingly positive. "There is little doubt that momentum in these markets is firmly on the side of higher prices," said fuel distributor TAC Energy in a note. Oil-production outages currently stand at the highest level in years, said consulting firm ClearView Energy Partners LLC in a note. Nigerian production has dropped to a multiyear low due to multiple pipeline outages, and Canadian oil-sands output was halted in recent weeks due to wildfires. Traders are also worried about production levels in Libya due to political unrest. Production is also falling in some countries as aging wells become depleted and less money is spent on new drilling. The Energy Information Administration said Monday that production in the seven key shale-drilling regions would fall by 113,000 barrels a day in June compared with May. U.S. output fell from a peak of 9.7 million barrels a day in April 2015 to 9 million barrels a day in April 2016, the EIA said last week. Strong demand from China and India is also boosting oil prices, said Barclays PLC in a note. Despite the rally in recent months, oil prices remain too low for many producers to make money, and analysts expect widespread pain in the U.S. oil patch and elsewhere to continue. SandRidge Energy Inc., an Oklahoma City producer, filed for bankruptcy protection Monday after reaching a deal with its creditors to swap debt for control of the company. SandRidge joins dozens of other U.S. producers that have filed for bankruptcy. Gasoline futures settled up 1.81 cents, or 1.1%, to $1.6063 a gallon, the highest settlement since August. Diesel futures rose 3.7 cents, or 2.6%, to $1.4401 a gallon. Kevin Baxter, Georgi Kantchev and Patrick Fitzgerald contributed to this article Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Bankruptcy; Futures; Crude oil prices; Petroleum production; Energy industry
Location: Russia United States--US Nigeria Canada Saudi Arabia
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789016769
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789016769?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Breitburn Energy Partners Files for Chapter 11 Bankruptcy; L.A.-based company joins the crowd of oil-and-gas businesses in bankruptcy amid plunging oil prices
Author: Brickley, Peg; Corrigan, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a.
Abstract:
Breitburn's hedging assets, contracts that cushion the company's cash holdings against price volatility, will be a central factor in restructuring talks, according to the court papers.
Full text: Breitburn Energy Partners LP filed for chapter 11 bankruptcy protection Sunday, taken down by plunging oil prices. Business operations will continue while Breitburn negotiates a restructuring of its balance sheet, continuing talks with creditors that began a month ago, Chief Executive Hal Washburn said in a release. The decision to file for bankruptcy was made when it became "abundantly clear that those negotiations could not be concluded and an appropriate restructuring consummated on an out-of-court basis" in time to avert a cascade of defaults that would have squeezed Breitburn's liquidity, James Jackson, chief financial officer of a Breitburn subsidiary, wrote in a court filing. Breitburn's hedging assets, contracts that cushion the company's cash holdings against price volatility, will be a central factor in restructuring talks, according to the court papers. The company estimates proceeds of its hedging agreements could be up to $500 million. Outside bankruptcy, hedges are "a significant source of liquidity." In bankruptcy, however, a dispute is brewing with Breitburn's senior lenders, many of whom are also counterparties to the hedge agreements. The company hopes negotiations will avoid litigation over the question of whether it is entitled to use the hedging proceeds, according to court papers. Meanwhile, Breitburn has come to terms with senior lenders on financing arrangements that will support normal operations in bankruptcy. "We think we can get to the finish line in relatively quick order if there is consensus," Ray Schrock, a lawyer for Breitburn, said during a bankruptcy court hearing Monday. The Los Angeles company joined a crowd of oil-and-gas firms in bankruptcy, including Linn Energy LLC, which also attracted investors with partnership tax benefits. In April, Breitburn suspended distributions to preferred investors and skipped bond interest payments. Distributions to common shareholders were cut, then suspended last year, as Breitburn took steps to get its finances in line with plunging oil prices. Citing the "prolonged decline in commodity prices," Mr. Washburn said Breitburn's existing debt is unsustainable. In papers filed in the U.S. Bankruptcy Court in New York, Breitburn reported assets of $4.7 billion and debts of $3.4 billion as of March 31. About $3 billion of Breitburn's debts are bank and bond debt, topped by $1.25 billion in loans from lenders led by Wells Fargo Bank, NA. Breitburn is carrying $650 million of senior secured second-lien bonds and $1.1 billion in unsecured bonds. Breitburn said it has been in talks with bondholders about a balance-sheet restructuring. The company has lined up $75 million in bankruptcy financing, and is in talks with senior lenders about bankruptcy emergence financing. Chapter 11 financing from existing senior lenders could include an additional $75 million, if certain conditions are met, according to court papers. Shares of the energy exploration and production company have plummeted over the past year, as the price of oil sank and losses mounted. Breitburn's estimated proven reserves, which were valued at $4.5 billion at the end of 2014, were worth only $1.3 billion as of the end of 2015. Breitburn has crude oil and natural gas assets in the Midwest, Ark-La-Tex, the Permian Basin, the Mid-Continent, the Rockies, the Southeast and California. Write to Peg Brickley at peg.brickley@wsj.com and Tom Corrigan at tom.corrigan@wsj.com Credit: By Peg Brickley and Tom Corrigan
Subject: Bankruptcy reorganization; Bankruptcy; Prices; Debt; Federal courts
Location: California
Company / organization: Name: Linn Energy LLC; NAICS: 211112; Name: Bankruptcy Court-US; NAICS: 922110; Name: Wells Fargo Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789025600
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789025600?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Norway Oil Fund to Sue Volkswagen Over Emissions Scandal; Sovereign-wealth fund plans to join a class-action lawsuit against the German auto maker
Author: Chopping, Dominic; Dauer, Ulrike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a.
Abstract:
In March, 278 investors, including Calpers, California's public pension fund, joined a class-action suit in Germany seeking around $3.57 billion in damages as a result of the dramatic erosion of the car maker's share price after the scandal broke in September.
Full text: Norway's sovereign-wealth fund Monday said it has informed Volkswagen AG about its intention to join a class-action lawsuit filed against the German auto maker over its emissions scandal , adding the world's biggest fund by assets to a long list of angry share and stakeholders. "Norges Bank Investment Management intends to join a legal action against Volkswagen arising out of [the fact] that the company provided incorrect emissions data," fund spokeswoman Marthe Skaar said. The fund has notified Volkswagen about the planned litigation, she said. "We have been advised by our lawyers that the company's conduct gives rise to legal claims under German law. As an investor it is our responsibility to safeguard the fund's holding in Volkswagen," she added. A spokesman at Volkswagen declined to comment. The $852 billion oil fund said its holding in Volkswagen was worth $750 million at the end of 2015, after 4.9 billion Norwegian kroner ($599 million) was wiped from the value of the stake in the third quarter of 2015 as a result of the scandal. Volkswagen in September admitted to using so-called defeat devices that could detect when a car was being tested and modify its performance, to ensure the car's emissions were suppressed during the testing period. It said last month that it has taken a [euro]16.2 billion charge related to the emissions-cheating scandal, forcing it to slash its 2015 dividend and post a deep loss. In March, 278 investors, including Calpers, California's public pension fund, joined a class-action suit in Germany seeking around $3.57 billion in damages as a result of the dramatic erosion of the car maker's share price after the scandal broke in September. Last month, Volkswagen projected nearly [euro]8 billion to buy back tainted diesel-powered cars and roughly [euro]7 billion more for "legal risks"--the costs of legal claims, penalties and compensation. News about the Norwegian fund's litigation plan was first reported by the Financial Times. RELATED ARTICLES * VW Shares Up on Activist Investor Demands for Restructure (5/9/16) * Lawyer Takes Aim at Volkswagen in Europe Over Emissions Scandal (4/24/16) * U.S. Sues Volkswagen Over Emissions Scandal (1/5/16) Write to Dominic Chopping at dominic.chopping@wsj.com and Ulrike Dauer at ulrike.dauer@wsj.com Credit: Dominic Chopping, Ulrike Dauer
Subject: Automobile industry; Scandals; Litigation
Location: California Norway
Company / organization: Name: Norges Bank Investment Management; NAICS: 523920; Name: Financial Times; NAICS: 511110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789025756
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789025756?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
SandRidge Energy Files for Bankruptcy Protection; Oklahoma City oil and gas company becomes latest victim of downturn in energy sector
Author: Ailworth, Erin; Gleason, Stephanie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a.
Abstract:
Related * MoneyBeat: For These Firms, Oil Rebound Came Too Late * Oil Patch Claims More Victims (May 13) Some 77 North American energy companies have now declared bankruptcy since the start of 2015, soon after oil prices collapsed from a peak of more than $100 a barrel and began weighing on balance sheets, according to Houston law firm Haynes & Boone LLP.
Full text: SandRidge Energy Inc., an early player in the American shale boom and onetime Wall Street darling, became the latest oil and gas company to file for bankruptcy Monday in what is becoming the largest wave of corporate restructurings since the financial crisis. The Oklahoma City-based driller is the fifth energy company to file for bankruptcy in five days, part of an accelerating parade of defaults in a sector that has been struggling with low oil prices for more than 18 months. Related * MoneyBeat: For These Firms, Oil Rebound Came Too Late * Oil Patch Claims More Victims (May 13) Some 77 North American energy companies have now declared bankruptcy since the start of 2015, soon after oil prices collapsed from a peak of more than $100 a barrel and began weighing on balance sheets, according to Houston law firm Haynes & Boone LLP. This year, 175 oil-and-gas producers around the world are in danger of declaring bankruptcy, and the situation is nearly as dire for another 160 companies, many in the U.S., according to a report from Deloitte's energy consultants. Casualties of the bust will continue even though the price of crude has rebounded to more than $47 Monday since hitting a 13-year low of around $26 a barrel in mid-February. For many American oil companies, the oil market's revival is too little, too late. Most of the companies facing financial duress are small and midsize U.S. shale producers and the service companies that help them drill. Fueled by cheap debt from Wall Street, these companies rapidly expanded over the last decade as the U.S. unlocked vast new oil-and-gas reserves with advanced technologies like hydraulic fracturing, or fracking. Linn Energy LLC, Berry Petroleum Co. and Penn Virginia Corp. all filed in recent days in Texas; Breitburn Energy Partners LP declared bankruptcy late Sunday in a New York court. Exco Resources Inc. said Friday that it hired advisers and formed a special committee to explore alternatives, including seeking bankruptcy protection. "Keep an eye out, there'll be more," said Charles Beckham Jr., a law partner at Haynes & Boone. "For the industry it's kind of a dreadful watch." A subsidiary of American Energy Partners LP, a firm formerly led by late shale pioneer Aubrey McClendon, has defaulted on a $450 million loan, according to people familiar with the situation. Oil and gas companies this year have defaulted on $26 billion, according to Fitch Ratings data. That figure already surpasses the total for 2015, $17.5 billion. These numbers have driven the number of corporate defaults overall to levels not seen since 2009, according to S&P Global Ratings. Investors poured capital into American oil producers when prices were high, and many companies pursued wells that were only economic when the price of crude was $70 or more. As oil prices began to plunge in the fall of 2014 due to a global glut the U.S. drillers helped create, much drilling activity from Texas to North Dakota to Pennsylvania became unprofitable. The oil downturn is "broad and deep," said John Penn, a restructuring lawyer with Perkins Coie LLP. In past years when oil and gas prices dropped, the dip has been shaped like a V with about a year from tip to tip, he said. "This one's going to be a long spell." The number of rigs punching new wells is down nearly 80% since the start of the bust, from 1,858 active rigs in the U.S. to just 406, according to Baker Hughes Inc., an oil-field service company. SandRidge, created in 2006 by Tom Ward, who co-founded Chesapeake Energy Corp. with Mr. McClendon in 1989. Mr. Ward paid $500 million to take control of a natural-gas producer, which he renamed SandRidge and built into a leading shale producer with a market capitalization of more than $11 billion. The company attracted an array of investors including TPG-Axon Capital Management LP and Mount Kellett Capital Management LP. Each lost more than $150 million in the company's decline, as did a longtime supporter of Mr. Ward, veteran Canadian investor Prem Watsa, the Journal reported earlier this year. On Monday, SandRidge said it had reached a prearranged debt-restructuring pact with creditors, which still requires court approval, to swap $3.7 billion in debt for control of the company. The plan should allow SandRidge to emerge from bankruptcy in short order, said James Bennett, who became its chief executive after Mr. Ward was ousted by activist investors in 2013. Some energy producers that have filed for bankruptcy in recent weeks took dramatic steps to buy back or exchange debt at a discount in 2015, a common tactic for financially distressed companies because it reduced the cost of interest payments. Energy XXI Ltd. and Midstates Petroleum Co., which both filed for bankruptcy in April, exchanged debt last year. SandRidge completed several debt deals in 2015, including a $50 million equity-for-debt exchange and $1.25 billion private offering of second-lien notes last May. Funds raised in the private offering were used to repay money borrowed from SandRidge's revolving credit line. Issued at par, that debt recently traded hands at just 34 cents, according to Fitch Ratings. Current shareholders aren't expected to recover anything in the company's bankruptcy. As distressed companies run out of options, analysts expect to see more mergers and acquisitions. Range Resources Corp. said Monday it would buy rival Memorial Resource Development Corp. in an all-stock deal valued at $3.3 billion, plus the assumption of $1.1 billion in debt. If it closes, Range-Memorial would be the biggest merger of U.S. energy producers during this downturn, according to data from Dealogic. Some companies that have been hesitant to combine during difficult times now feel there is more clarity in the market, according to Houston energy investment bank Tudor Pickering Holt & Co. Private-equity firms are also starting to bargain hunt, William Conway, co-chief executive of Carlyle Group LP, told investors in April. Carlyle has raised $12 billion and earmarked it for future energy investments. "Opportunities for investments are increasing and improving," Mr. Conway said. Lynn Cook and Matt Jarzemsky contributed to this article. Write to Erin Ailworth at Erin.Ailworth@wsj.com and Stephanie Gleason at stephanie.gleason@wsj.com Credit: By Erin Ailworth And Stephanie Gleason
Subject: Bankruptcy; Crude oil prices; Energy industry; Natural gas utilities; Hydraulic fracturing
Location: United States--US
People: McClendon, Aubrey
Company / organization: Name: Exco Resources Inc; NAICS: 211111; Name: Penn Virginia Corp; NAICS: 211111; Name: Berry Petroleum Co; NAICS: 324110; Name: SandRidge Energy Inc; NAICS: 211111; Name: Haynes & Boone; NAICS: 541110; Name: Linn Energy LLC; NAICS: 211112; Name: American Energy Partners LP; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789067183
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789067183?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Government Bonds Pull Back on Oil Rally; Rising oil prices, stocks taking demand away from Treasurys
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a.
Abstract:
Government bond yields in Japan and Germany are much lower, with a large amount of sovereign debt yielding below zero, attracting foreign investors into U.S. Treasury bonds for income.
Full text: U.S. government bonds pulled back on Monday following last week's rally as higher crude oil and stock prices sapped demand for haven debt. U.S. crude oil prices rallied by 3.3% Monday and settled at the highest level since November, a sign of investors' improving appetite to take risks. The S&P 500 stock index was up about 1%. "It is risk on" that pressured Treasury bond prices lower, said Justin Lederer, senior trader of interest rates at Cantor Fitzgerald in New York. In late-afternoon trading, the yield on the benchmark 10-year Treasury note was 1.752%, compared with 1.705% Friday. Yields rise as bond prices fall. The 10-year yield was still down more than half of a percentage point this year, highlighting strong demand for U.S. government debt amid sluggish global economic growth, still contained inflation threats and a very patient approach by the Federal Reserve to raise interest rates. Government bond yields in Japan and Germany are much lower, with a large amount of sovereign debt yielding below zero, attracting foreign investors into U.S. Treasury bonds for income. Demand from overseas has played a big role in keeping U.S. bond yields near their all-time lows. That has been confounding many on Wall Street who believe that Treasury bond yields should have risen to reflect a labor market that is near full employment while signs of inflation were ticking up from very low levels. Last Friday, the 10-year yield closed at the lowest level in more than a month, defying data that showed retail sales grew at the fastest monthly pace in more than a year. Traders expect the 10-year yield to trade between 1.5% and 2% in the short term. Stubbornly low Treasury yields are driving U.S. firms to sell new debt to lock in cheap funding costs. New corporate debt sales have been robust in May. This week, Dell is expected to sell new debt among large firms. Corporate debt offers higher yields than Treasury debt, which attract institutional investors, especially those in the U.S. that consider Treasury debt yields unappealing. The Fed's cautious stance in raising rates has reduced investors' concerns over a large increase in bond yields. Higher interest rates from the central bank tend to dilute the value of outstanding government bonds. Many bond investors are skeptical that the Fed would raise interest rates soon given the uncertain global growth outlook. Some Fed officials said the bond markets are complacent. Federal Reserve Bank of Boston President Eric Rosengren, who votes on rate decisions this year, on Thursday repeated his warning that the central bank may raise rates at a faster pace than many investors currently anticipate. Some analysts warn that Treasury bonds would sell off if the Fed raises rates sooner than many investors expect or at a faster pace than many anticipate. By piling into long-term government bonds over the past few years, investors are exposed to large interest rate risks because these debt would post a sharper price decline in response to a given rise in yields compared with shorter-term debt. Write to Min Zeng at min.zeng@wsj.com Credit: By Min Zeng
Subject: Interest rates; Corporate debt; Central banks; Federal Reserve monetary policy; Crude oil; Crude oil prices; Institutional investments
Location: United States--US New York
People: Rosengren, Eric
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789072314
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789072314?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
SandRidge Energy Files for Bankruptcy Protection; Oklahoma City oil and gas company becomes latest victim of downturn in energy sector
Author: Fitzgerald, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a. [Duplicate]
Abstract:
Some energy producers that have filed for bankruptcy in recent weeks took dramatic steps to buy back or exchange debt at a discount in 2015, a common tactic for financially distressed companies because it reduced the cost of interest payments.
Full text: SandRidge Energy Inc., an early player in the American shale boom and onetime Wall Street darling, became the latest oil and gas company to file for bankruptcy Monday in what is becoming the largest wave of corporate restructurings since the financial crisis. The Oklahoma City-based driller is the fifth energy company to file for bankruptcy in five days, part of an accelerating parade of defaults in a sector that has been struggling with low oil prices for more than 18 months. Some 77 North American energy companies have now declared bankruptcy since the start of 2015, soon after oil prices collapsed from a peak of more than $100 a barrel and began weighing on balance sheets, according to Houston law firm Haynes & Boone LLP. This year, 175 oil-and-gas producers around the world are in danger of declaring bankruptcy, and the situation is nearly as dire for another 160 companies, many in the U.S., according to a report from Deloitte's energy consultants. Casualties of the bust will continue even though the price of crude has rebounded to more than $47 Monday since hitting a 13-year low of around $26 a barrel in mid-February. For many American oil companies, the oil market's revival is too little, too late. Most of the companies facing financial duress are small and midsize U.S. shale producers and the service companies that help them drill. Fueled by cheap debt from Wall Street, these companies rapidly expanded over the last decade as the U.S. unlocked vast new oil-and-gas reserves with advanced technologies like hydraulic fracturing, or fracking. Linn Energy LLC, Berry Petroleum Co. and Penn Virginia Corp. all filed in recent days in Texas; Breitburn Energy Partners LP declared bankruptcy late Sunday in a New York court. Exco Resources Inc. said Friday that it hired advisers and formed a special committee to explore alternatives, including seeking bankruptcy protection. "Keep an eye out, there'll be more," said Charles Beckham Jr., a law partner at Haynes & Boone. "For the industry it's kind of a dreadful watch." A subsidiary of American Energy Partners LP, a firm formerly led by late shale pioneer Aubrey McClendon, has defaulted on a $450 million loan, according to people familiar with the situation. Oil and gas companies this year have defaulted on $26 billion, according to Fitch Ratings data. That figure already surpasses the total for 2015, $17.5 billion. These numbers have driven the number of corporate defaults overall to levels not seen since 2009, according to S&P Global Ratings. Investors poured capital into American oil producers when prices were high, and many companies pursued wells that were only economic when the price of crude was $70 or more. As oil prices began to plunge in the fall of 2014 due to a global glut the U.S. drillers helped create, much drilling activity from Texas to North Dakota to Pennsylvania became unprofitable. The oil downturn is "broad and deep," said John Penn, a restructuring lawyer with Perkins Coie LLP. In past years when oil and gas prices dropped, the dip has been shaped like a V with about a year from tip to tip, he said. "This one's going to be a long spell." The number of rigs punching new wells is down nearly 80% since the start of the bust, from 1,858 active rigs in the U.S. to just 406, according to Baker Hughes Inc., an oil-field service company. SandRidge, created in 2006 by Tom Ward, who co-founded Chesapeake Energy Corp. with Mr. McClendon in 1989. Mr. Ward paid $500 million to take control of a natural-gas producer, which he renamed SandRidge and built into a leading shale producer with a market capitalization of more than $11 billion. The company attracted an array of investors including TPG-Axon Capital Management LP and Mount Kellett Capital Management LP. Each lost more than $150 million in the company's decline, as did a longtime supporter of Mr. Ward, veteran Canadian investor Prem Watsa, the Journal reported earlier this year. On Monday, SandRidge said it had reached a prearranged debt-restructuring pact with creditors, which still requires court approval, to swap $3.7 billion in debt for control of the company. The plan should allow SandRidge to emerge from bankruptcy in short order, said James Bennett, who became its chief executive after Mr. Ward was ousted by activist investors in 2013. Some energy producers that have filed for bankruptcy in recent weeks took dramatic steps to buy back or exchange debt at a discount in 2015, a common tactic for financially distressed companies because it reduced the cost of interest payments. Energy XXI Ltd. and Midstates Petroleum Co., which both filed for bankruptcy in April, exchanged debt last year. SandRidge completed several debt deals in 2015, including a $50 million equity-for-debt exchange and $1.25 billion private offering of second-lien notes last May. Funds raised in the private offering were used to repay money borrowed from SandRidge's revolving credit line. Issued at par, that debt recently traded hands at just 34 cents, according to Fitch Ratings. Current shareholders aren't expected to recover anything in the company's bankruptcy. As distressed companies run out of options, analysts expect to see more mergers and acquisitions. Range Resources Corp. said Monday it would buy rival Memorial Resource Development Corp. in an all-stock deal valued at $3.3 billion, plus the assumption of $1.1 billion in debt. If it closes, Range-Memorial would be the biggest merger of U.S. energy producers during this downturn, according to data from Dealogic. Some companies that have been hesitant to combine during difficult times now feel there is more clarity in the market, according to Houston energy investment bank Tudor Pickering Holt & Co. Private-equity firms are also starting to bargain hunt, William Conway, co-chief executive of Carlyle Group LP, told investors in April. Carlyle has raised $12 billion and earmarked it for future energy investments. "Opportunities for investments are increasing and improving," Mr. Conway said. --Stephanie Gleason, Shasha Dai, and Ryan Dezember contributed to this article. Credit: By Patrick Fitzgerald
Subject: Bankruptcy; Debt restructuring; Crude oil prices; Energy industry; Natural gas utilities; Hydraulic fracturing
Location: Oklahoma United States--US
People: McClendon, Aubrey
Company / organization: Name: Exco Resources Inc; NAICS: 211111; Name: Penn Virginia Corp; NAICS: 211111; Name: Berry Petroleum Co; NAICS: 324110; Name: SandRidge Energy Inc; NAICS: 211111; Name: Haynes & Boone; NAICS: 541110; Name: Linn Energy LLC; NAICS: 211112; Name: American Energy Partners LP; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789096002
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789096002?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
What About the Inaccurate Data on the Other Side? New York's AG can compel Exxon Mobil to turn over its data refuting global warming while Congress can't compel the EPA to reveal its data supporting global warming.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a.
Abstract:
Regarding Philip Hamburger's "A Climate Courtroom Crusade Scorches Due Process " (op-ed, May 12): I find it curious that New York Attorney General Eric Schneiderman can compel Exxon Mobil to turn over its data refuting global warming while Lamar Smith, a sitting U.S. congressman, cannot compel the EPA to reveal its data allegedly supporting global warming.
Full text: Regarding Philip Hamburger's "A Climate Courtroom Crusade Scorches Due Process " (op-ed, May 12): I find it curious that New York Attorney General Eric Schneiderman can compel Exxon Mobil to turn over its data refuting global warming while Lamar Smith, a sitting U.S. congressman, cannot compel the EPA to reveal its data allegedly supporting global warming. It would seem that the first step in proving fraud would be to demonstrate that Exxon Mobil is incorrect. Obviously, if the EPA had such data in its possession, it would be providing it to whomever desired it and probably pressuring media outlets to publish it. Michael R. Cheuvront San Antonio New York AG Schneiderman is claiming Exxon Mobil suppressed global-warming research and is committing fraud. Will he also be prosecuting Prof. Michael Mann's misleading 20th-century "hockey stick" graph of global warming or the U.N. saying temperatures have increased in the last 17 years, when they have not? Ken Nelson Chicago
Subject: Global warming; Greenhouse effect
Location: United States--US New York
People: Smith, Lamar Schneiderman, Eric
Company / organization: Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789103066
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789103066?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Finance: Saudi, Oman, Bahrain Debt Ratings Cut --- Moody's says oil exporters' economies continue to be hurt by decline in crude prices
Author: Parasie, Nicolas
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 May 2016: C.3.
Abstract:
Some of these countries have responded by cutting spending, raising taxes, reducing subsidies, issuing debt or drawing down foreign reserves that they accumulated in recent decades when oil prices were higher.
Full text: DUBAI -- Saudi Arabia and two of its oil-exporting neighbors in the Persian Gulf had their debt ratings cut by Moody's Investors Service, as the slide in crude prices continued to afflict the region's economies. The ratings firm over the weekend downgraded Saudi Arabia's long-term issuer ratings by a notch to A1 from Aa3 but maintained its stable outlook on the kingdom. Oman's credit rating was reduced by a notch to Baa1, while Bahrain was cut to Ba2. The collapse in energy prices from recent peaks in the middle of 2014 has hit Gulf economies that rely heavily on the sale of oil to fund large-scale infrastructure projects to accommodate their fast-growing populations. Some of these countries have responded by cutting spending, raising taxes, reducing subsidies, issuing debt or drawing down foreign reserves that they accumulated in recent decades when oil prices were higher. In the case of Saudi Arabia, whose economy is the largest in the Arab world as measured by gross domestic product, the country's budget deficit ballooned to nearly $100 billion in 2015 because of the plunge in oil revenue. Simultaneously, its foreign reserves dropped from a 2014 peak of $731 billion to below $600 billion in March, according to government data. Moody's expects those foreign reserves to fall to $460 billion in 2019. It also estimates the Saudi budget deficit will average 9.5% of GDP each year between 2016 and 2020, a shortfall that will require $324 billion in financing. "A combination of lower growth, higher debt levels and smaller domestic and external buffers leave the Kingdom less well positioned to weather future shocks," said Moody's. Saudi Arabia borrowed $10 billion from international banks last month and is widely expected to issue more debt later this year. But its strongest response so far to the new economic challenges is a raft of changes announced last month, dubbed Vision 2030, aimed at reducing the country's dependence on oil. The economic overhaul involves listing part of state-owned energy giant Saudi Arabia Oil Co., known as Aramco, but also promoting nonoil industries and making the country more attractive to foreign investors. Moody's said that without any of those moves, Saudi Arabia's financial troubles would continue to intensify. It said the country's efforts at diversifying its economy, even if only partially successful, would improve the country's creditworthiness. At the same time, Moody's said those plans are still at an embryonic stage and their "impact remains unclear." Moody's had previously changed its outlook on Saudi Arabia's banking sector to negative and put the country's credit rating on review for a potential downgrade. Rival ratings firm Standard & Poor's Ratings Services preceded Moody's in February by lowering Saudi Arabia's rating to A-minus, also citing the impact of low oil prices. Credit: By Nicolas Parasie
Subject: Foreign investment; Budget deficits; Economic growth; Credit ratings; Sovereign debt
Location: Oman Bahrain Saudi Arabia
Classification: 1120: Economic policy & planning; 9178: Middle East
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: May 16, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789186655
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789186655?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Breitburn Energy Partners Files for Chapter 11 Bankruptcy; L.A.-based company joins the crowd of oil-and-gas businesses in bankruptcy amid plunging oil prices
Author: Brickley, Peg; Corrigan, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 May 2016: n/a. [Duplicate]
Abstract:
The decision to file for bankruptcy was made when it became "abundantly clear that those negotiations could not be concluded and an appropriate restructuring consummated on an out-of-court basis" in time to avert a cascade of defaults that would have squeezed Breitburn's liquidity, James Jackson, chief financial officer of a Breitburn subsidiary, wrote in a court filing.
Full text: Breitburn Energy Partners LP, which last year received a $1 billion investment from EIG Global Energy Partners and other investors, filed for chapter 11 bankruptcy protection Sunday, taken down by plunging oil prices. Related Articles * EIG Gets Caught in Breitburn Energy's Liquidity Woes * EIG Global Energy Partners to Invest $1B of Debt and Equity in Breitburn Business operations will continue while Breitburn negotiates a restructuring of its balance sheet, continuing talks with creditors that began a month ago, Chief Executive Hal Washburn said in a release. The decision to file for bankruptcy was made when it became "abundantly clear that those negotiations could not be concluded and an appropriate restructuring consummated on an out-of-court basis" in time to avert a cascade of defaults that would have squeezed Breitburn's liquidity, James Jackson, chief financial officer of a Breitburn subsidiary, wrote in a court filing. Breitburn's hedging assets, contracts that cushion the company's cash holdings against price volatility, will be a central factor in restructuring talks, according to the court papers. The company estimates proceeds of its hedging agreements could be up to $500 million. Outside bankruptcy, hedges are "a significant source of liquidity." In bankruptcy, however, a dispute is brewing with Breitburn's senior lenders, many of whom are also counterparties to the hedge agreements. The company hopes negotiations will avoid litigation over the question of whether it is entitled to use the hedging proceeds, according to court papers. Meanwhile, Breitburn has come to terms with senior lenders on financing arrangements that will support normal operations in bankruptcy. "We think we can get to the finish line in relatively quick order if there is consensus," Ray Schrock, a lawyer for Breitburn, said during a bankruptcy court hearing Monday. The Los Angeles company joined a crowd of oil-and-gas firms in bankruptcy, including Linn Energy LLC, which also attracted investors with partnership tax benefits. In April, Breitburn suspended distributions to preferred investors and skipped bond interest payments. Distributions to common shareholders were cut, then suspended last year, as Breitburn took steps to get its finances in line with plunging oil prices. Citing the "prolonged decline in commodity prices," Mr. Washburn said Breitburn's existing debt is unsustainable. In papers filed in the U.S. Bankruptcy Court in New York, Breitburn reported assets of $4.7 billion and debts of $3.4 billion as of March 31. About $3 billion of Breitburn's debts are bank and bond debt, topped by $1.25 billion in loans from lenders led by Wells Fargo Bank, NA. Breitburn is carrying $650 million of senior secured second-lien bonds and $1.1 billion in unsecured bonds. Breitburn said it has been in talks with bondholders about a balance-sheet restructuring. The company has lined up $75 million in bankruptcy financing, and is in talks with senior lenders about bankruptcy emergence financing. Chapter 11 financing from existing senior lenders could include an additional $75 million, if certain conditions are met, according to court papers. Shares of the energy exploration and production company have plummeted over the past year, as the price of oil sank and losses mounted. Breitburn's estimated proven reserves, which were valued at $4.5 billion at the end of 2014, were worth only $1.3 billion as of the end of 2015. Breitburn has crude oil and natural gas assets in the Midwest, Ark-La-Tex, the Permian Basin, the Mid-Continent, the Rockies, the Southeast and California. Credit: By Peg Brickley and Tom Corrigan
Subject: Bankruptcy reorganization; Bankruptcy; Prices; Federal courts; Debt restructuring
Company / organization: Name: Linn Energy LLC; NAICS: 211112; Name: EIG Global Energy Partners; NAICS: 523910; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 16, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789186918
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789186918?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Edge Up; Profit-Taking Risk Ahead; July Brent crude rose $0.29 to $49.26 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2016: n/a.
Abstract:
[...]while we still forecast a deficit in second half of 2016, it is now smaller than we had expected at 400,000 barrels a day versus 900,000 barrels a day previously.
Full text: Oil prices gained further traction in early Asian trade Tuesday, buoyed by the ongoing supply outages and bullish outlook that the global market has flipped into a deficit. However, analysts expect profit-taking and lack of confidence in the rally will likely hinder prices from climbing higher. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $48.22 a barrel at 0251 GMT, up $0.50 in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose $0.29 to $49.26 a barrel. Global oil production has outstripped demand for nearly two years, causing prices to drop as low as $26 a barrel earlier this year. However, production disruptions in Canada, Nigeria and Libya has helped chip away some of the glut, prompting a rosier outlook. "The increasing intensity in supply-side disruptions in the oil market should see prices well supported in the short term," said ANZ Research. While prices have risen 85% since dropping to its 13-year low in February, the lingering low prices have also made it uneconomical for many upstream producers to keeping pumping, sending U.S. shale production on a steady decline in recent months. In the week ended May 6, U.S. crude production fell to 8.8 million barrels a day, lowest level since September 2014. Elsewhere, production of crude has also dropped. In April, China's crude production dipped 5.6% to 16.6 million tons or 4.05 million barrels a day. "The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected," said Goldman Sachs in a report Monday, adding that the global oil market likely shifted into a deficit in May. However, the bank also warned of headwinds. The return of some of the production outages and higher-than-previously expected U.S., North Sea, Iraq and Iran production could more than offset the persistence of some of the disruptions. "As a result, while we still forecast a deficit in second half of 2016, it is now smaller than we had expected at 400,000 barrels a day versus 900,000 barrels a day previously. This also leads us to expect that the global market imbalance will shift back into surplus in first half of 2017," said the bank. Although prices are making their way up toward the $50-a-barrel mark, some analysts said the rally might be short-lived. "The $50 mark is more of a psychological barrier. The truth is, there is still plenty of oil in the market and the glut is still there," said Avtar Sandhu, chief commodity analyst at Phillip Futures. "What investors need is a more sustained and stabilized rally. Profit-taking could take prices back down to the $45 level," said Mr. Sandhu. For this week, investors will be eyeing the weekly U.S. crude stocks and production for cues. In an analysts survey by Platts, U.S. crude stocks likely decreased 3 million barrels last week. Official data by the U.S. Energy Department will be released on Wednesday. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--rose 89.99999 points to $1.6153 a gallon, while June diesel traded at $1.4496, 95 points higher. ICE gasoil for June changed hands at $433.50 a metric ton, up $3.25 from Monday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Supply & demand; Futures; Petroleum production
Location: United States--US
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 17, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789108617
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789108617?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Energy Stocks Fuel Rally as Oil Prices Hit 2016 High
Author: Kuriloff, Aaron; Gold, Riva
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 May 2016: C.4.
Abstract:
While global oil production has exceeded demand for almost two years and inventories of crude stand near records, supply has tightened in recent weeks.
Full text: Energy shares climbed as crude-oil prices hit a fresh 2016 high, contributing to a broad rally in U.S. stocks. Stocks' swings have picked up in the past week. The Dow Jones Industrial Average rose 175.39 points, or 1%, to 17710.71 Monday, its fourth move of at least 1% since last Tuesday. March and April had just four moves of at least 1% between them, while the first two months of the year had 24. Major U.S. indexes have rebounded from the year's lows in mid-February, but investors are concerned that weak economic growth and corporate earnings could limit gains. The Dow industrials and S&P 500 fell for a third straight week last week, and are now up 1.6% and 1.1% for 2016, respectively. Technology shares were among the biggest gainers Monday, paring 2016 losses for one of the few S&P 500 sectors still down for the year. The tech-heavy Nasdaq Composite Index rose 57.78 points, or 1.2%, to 4775.46. "It's a nice confluence of events here," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, referring to the gains in energy and tech stocks. "It does highlight that there are plenty of bargain hunters out there." Apple rose $3.36, or 3.7%, to $93.88 after Warren Buffett's Berkshire Hathaway took a new $1 billion stake in the technology giant in the first quarter. Apple shares had fallen about 13% through last week since the company in April reported its first quarterly revenue decline in 13 years. Nvidia rose 1.21, or 3%, to 42.19, while Activision Blizzard rose 1.10, or 2.9%, to 39.39. The S&P 500 rose 20.05 points, or 1%, to 2066.66. Energy shares rose the most, gaining 1.6%. Williams Companies added 1.24, or 6.4%, to 20.59. U.S. crude oil rose 3.3% to $47.72 a barrel, its highest settlement since Nov. 3. Analysts at Goldman Sachs said the oil market is facing a shortfall after recent outages from large producers such as Canada and Nigeria. While global oil production has exceeded demand for almost two years and inventories of crude stand near records, supply has tightened in recent weeks. Goldman, which has been one of the most bearish banks on oil recently, now expects crude prices to climb to $50 a barrel in the second half of 2016, up from its April 22 forecast of prices between $40 and $45. The yield on the 10-year Treasury note rose to 1.752% from 1.705% on Friday for its biggest one-day yield gain since April 20. Some investors said that after a big stock-market rally from February's lows, better earnings are the key to further gains. "The next leg up has to be better news, and that's going to take some time to show up," said Bob Doll, senior portfolio manager at Nuveen Asset Management. The Stoxx Europe 600 rose less than 0.1%. Holidays across the region were expected to keep trading volumes light. Gold for May delivery rose 0.1% to $1,273.40 an ounce. Disappointing Chinese data resurfaced concerns about the world's second-largest economy. China's industrial-production, retail-sales and investment data released in recent days came in below expectations despite recent monetary-stimulus measures. Asian markets rose Monday, as analysts said investors there had already priced in concerns about the Chinese economy in a recent bout of selling. The Hang Seng Index ended up 0.8%, after three weeks of losses took it to its lowest level since the start of March. The Shanghai Composite Index rose 0.8%. Both indexes were flat early Tuesday. Japan's Nikkei Stock Average rose 0.3% on Monday and was up a further 1% early Tuesday. Credit: By Aaron Kuriloff and Riva Gold
Subject: Stock prices; Dow Jones averages; Daily markets (wsj)
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: May 17, 2016
column: Monday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789135716
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789135716?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Canada Wildfires Raise Threat to Oil-Sands Mining Operations; Winds push blazes toward shuttered facilities a day after 8,000 additional workers were evacuated
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2016: n/a.
Abstract:
Alberta Premier Rachel Notley said prevailing winds are pushing the fires toward oil-sands mines operated by industry leader Suncor Energy Inc. and its subsidiary Syncrude north of the town of Fort McMurray, which the blaze devastated this month.
Full text: CALGARY, Alberta--Forest fires in Northern Alberta are threatening two major oil-sands mining complexes, government officials said on Tuesday, a day after 8,000 workers evacuated camps and production facilities at risk from the spread of uncontrolled blazes. Two weeks after fires forced 80,000 residents to leave a northern town at the hub of the energy industry, shutdowns at many oil-sands sites have reduced Canadian production by at least one million barrels of oil a day, or about 40% of the country's total oil-sands output. Alberta Premier Rachel Notley said prevailing winds are pushing the fires toward oil-sands mines operated by industry leader Suncor Energy Inc. and its subsidiary Syncrude north of the town of Fort McMurray, which the blaze devastated this month. "Westerly winds will push the fire closer to Syncrude and Suncor, but we expect very high resiliency with both those facilities" from firebreaks, Ms. Notley said at a news conference in the provincial capital of Edmonton. The production disruption has contributed to a recent rise in oil prices. On Tuesday afternoon, U.S. benchmark West Texas Intermediate crude was up 1.5% at $48.44 a barrel. Related * Canada Wildfire Raises Safety Issues Close to Home (May 16) * Canada Wildfires Spread in Oil-Sands Region (May 5) * Fires in Canada's Oil-Sands Region Grow (May 7) The latest evacuations threaten to further delay a restart of oil-sands output, which some producers had begun planning last week. Suncor has closed down production of 300,000 barrels of oil a day at two mines and a pair of oil-sands well sites, and its Syncrude unit has shut its 350,000-barrel-a-day-capacity mines. Syncrude has evacuated all but about 100 staff needed "to maintain the safety and stability" of operations at its Aurora and Mildred Lake mines, a company spokesman said. It has plans in place to evacuate those remaining workers if needed, he said. Suncor said it was relocating nonessential workers in the area to camps farther north that aren't part of the evacuation order. The forest fire has grown to more than 877,000 acres, or nearly 1,370 square miles, up from 704,250 acres on Monday, Ms. Notley said. The fire's expansion led to the evacuations of nearly 20 worker camps late Monday. That included a 655-unit lodge operated by Horizon North Logistics Inc., which caught fire early Tuesday, the company and provincial officials said. The government said the fire poses a threat to neighborhoods in northwestern Fort McMurray, which has lost some 2,400 houses and other buildings since the fires were first detected on May 1. Thick smoke and fire risks have postponed efforts to restore utilities and plans for some retail business operations to resume in the town, officials said. Two unexplained explosions damaged homes late Monday in residential neighborhoods in Fort McMurray, they said. No oil-sands facilities have sustained damage from the fires and government officials said they are confident key energy infrastructure would be spared because of their wide surrounding firebreaks free of vegetation and firefighting capacity. "We feel fairly confident that the sites themselves will be OK," Chad Morrison, the Alberta forest ministry's wildfire compliance and investigations manager, told reporters at the news briefing. The outages are expected to have a minimal impact on Canadian economic growth, according to a report from the Conference Board of Canada released early Tuesday. The Ottawa think tank bases its findings on an estimated oil-production loss of about 1.2 million barrels a day over a two-week period. The Conference Board's findings are based on information available before the latest evacuations. The latest setback could result in a "bigger [production] hit" in May, but the industry will likely make up that lost output in June, assuming operations resume, said Pedro Antunes, the Conference Board's deputy chief economist. Similarly, efforts to rebuild the oil-sands region will help to offset the decline in economic growth caused by the fires, Mr. Antunes said. Other sites that were affected include oil-sands projects owned by Marathon Oil Corp. and PetroChina unit Brion Energy, according to the Regional Municipality of Wood Buffalo. Some facilities, while not damaged, have been affected by staffing issues stemming from the evacuation of Fort McMurray's residents and logistics issues preventing them from shipping heavy crude. Pipeline operator Enbridge Inc. has reduced its oil-sands crude shipments by about 900,000 barrels a day, down from a capacity of 1.5 million barrels a day. Ms. Notley said the fires have moved away from the Cheecham oil storage hub located about 43 miles southeast of Fort McMurray, Enbridge Inc., which operates a terminal there, said on Monday that the facility was at a heightened risk from fires. Ben Dummett contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com Corrections & Amplifications Marathon Oil Corp. is a nonoperating producer at oil-sands projects in Fort McMurray. An earlier version of this article incorrectly implied the company is an oil-sands-project operator. Credit: By Chester Dawson
Subject: Oil sands; Mines; Public officials; Workers; Forest & brush fires; Economic growth; Energy industry
Location: Nigeria New York
Company / organization: Name: Horizon North Logistics Inc; NAICS: 213112; Name: Suncor Energy Inc; NAICS: 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 17, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789149516
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789149516?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Firms Still Pay CEOs to Pump
Author: Dezember, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 May 2016: C.1.
Abstract:
Rewarding executives for growth at any cost is rooted in Wall Street's treatment of exploration-and-production shares as growth stocks. Since the advent of shale drilling more than a decade ago, analysts and investors tended to favor future prospects over profitability.
Full text: If investors hoped the biggest oil bust in decades would change the way oil industry executives are getting paid, they are probably disappointed. Many large production companies last year continued to compensate their executives based, in large part, on how much crude they found and extracted, according to a Wall Street Journal review of filings from the largest U.S. energy producers. Executives received sizable cash bonuses for finding and producing more oil and gas than the year before, even though plummeting commodity prices made it unprofitable to keep drilling many wells. At Chesapeake Energy Corp., one of the country's largest producers, Chief Executive Doug Lawler received $1.56 million last year for exceeding production and reserve targets,securities filings show. That was more than half of his $2.69 million bonus, according to the filings. Chesapeake's production rose 4.9% last year, more than twice its 2% target. But its earnings plummeted, and its stock lost 77%. A Chesapeake spokesman declined to comment. "There needs to be a more returns-focused element in this industry," said Paul Grigel, a Macquarie Group Ltd. senior analyst who tracks pay-policy changes among energy producers. "This is an issue for a lot of longer-term investors; it's something they're becoming very impassioned about." Mr. Grigel found that 14 of the 25 companies he studied either made no change in 2015, or didn't disclose the details of their bonus calculations. Four companies increased their emphasis on production and reserve growth last year, while seven lessened the importance of these factors. Supply concerns have ebbed in recent weeks as the market focused on a series of production outages in Canada, Nigeria and elsewhere that is crimping output. U.S. oil prices on Monday rose 3.3% to $47.72 a barrel on the New York Mercantile Exchange. Exploration-and-production companies in recent proxy filings have disclosed their formulas that determined last year's cash bonuses. These will be followed by annual meetings, where shareholders will have a say on pay practices. Some corporate-governance observers warn that investors won't tolerate big bonuses based on increased production if earnings and share prices are down. "Many shareholders hope that [bonuses] reflect the pain that investors are feeling in their portfolio values," said John Roe, managing director at ISS Corporate Solutions, a unit of investment adviser Institutional Shareholder Services Inc. Incentive pay in the oil patch helps explain why U.S. producers have been slow to dial down their output despite a global glut of crude and domestic natural-gas oversupply. U.S. oil production has declined about 7% since peaking at a four-decade high of about 9.7 million barrels last year. Natural-gas output, meanwhile, has remained on an upward trajectory despite a yearslong price slump. Rewarding executives for growth at any cost is rooted in Wall Street's treatment of exploration-and-production shares as growth stocks. Since the advent of shale drilling more than a decade ago, analysts and investors tended to favor future prospects over profitability. The collapse in commodity prices has put that practice into question, though, as many companies struggle under debt they piled up acquiring land and drilling. Yet producers are hesitant to stop offering incentives for growth altogether. These companies' borrowing abilities hinge on how much oil and gas they have discovered but not yet extracted and sold. If they don't replace enough of the volumes they sell each year with new discoveries, they risk losing funding. Overall, bonuses, which usually account for less than one-third of total compensation, broadly declined last year because low commodity prices crimped profits and sent stock prices tumbling. Continental Resources Inc., which drills in North Dakota and Oklahoma, reduced the weight given to production and reserve growth in its bonus math from 75% in 2014 to 34% last year, replacing its incentives to simply find more oil and gas with one aimed at keeping down the cost of doing so. Continental didn't respond to requests for comment. Devon Energy Corp. in its proxy filing urged shareholders to reject a shareholder proposal to eliminate reserve growth metrics from its bonus formula. The Oklahoma City company made production and reserve growth each worth 15% of possible bonuses, up from 10% and 5%, respectively, in 2014. Missing its goal of adding the equivalent of 140.4 million barrels of oil to its reserves cost CEO David Hager more than $200,000, Devon's proxy shows. Mr. Hager's 2015 bonus was $1.55 million, about half what his predecessor earned the year before. Credit: By Ryan Dezember
Subject: Petroleum production; Executive compensation
Location: United States--US
People: Lawler, Robert Douglas
Company / organization: Name: Chesapeake Energy Corp; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: May 17, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789177641
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789177641?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Climbs on Canadian Fires; Workers forced to leave, threatening a restart to production many had expected
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2016: n/a.
Abstract:
U.S. oil prices rallied for the eighth time in 10 sessions as Canadian forest fires forced more oil-site evacuations, threatening to delay the return of at least one million barrels a day of Canadian oil-sands production to the market.
Full text: U.S. oil prices rallied for the eighth time in 10 sessions as Canadian forest fires forced more oil-site evacuations, threatening to delay the return of at least one million barrels a day of Canadian oil-sands production to the market. The move pushed oil to a seven-month high on a day when it had initially started lower. The market has repeatedly set new highs in recent weeks as crude has continued its sharpest rally in years. Prices are now up 84% in three months since settling at a 13-year low in February. Fires in Canada are just the latest signs of supply declines from around the world, including pipeline outages in Nigeria and production cuts in the U.S. Goldman Sachs Group Inc. on Sunday said the global glut of crude has turned into a shortfall, a call that is still encouraging traders to bid up prices, analysts said. "Supplies are tightening more," said Ric Navy, senior vice president for energy futures at brokerage R.J. O'Brien & Associates LLC. "The reality of it is we still have a glut, but the prognostications are that it is lessening." Light, sweet crude for June delivery settled up 59 cents, or 1.2%, at $48.31 a barrel on the New York Mercantile Exchange, the highest settlement since Oct. 9. Brent, the global benchmark, rose 31 cents, or 0.6%, to $49.28 a barrel on ICE Futures Europe, its highest settlement since Nov. 3. The market dipped to losses several times in the early morning, but repeatedly rebounded quickly. Sentiment has become so bullish that traders are inclined to buy more at any dip in prices, Mr. Navy said. That sentiment was buoyed Tuesday by the evacuation of some 8,000 oil-sands workers late Monday, nearly two weeks after more than 80,000 other people fled blazes that destroyed part of a town central to Western Canada's oil industry. The mandatory evacuation order issued by the local municipal government affects staff who remained or returned after major oil-sands operators in the area shut down their operations earlier this month. Canadian oil-sands production averaged 2.5 million barrels a day last year, much of which was imported by the U.S. for refining into petroleum products. Local authorities said the order affects sites operated by Marathon Oil Corp., PetroChina unit Brion Energy and Suncor Energy Inc. The order scuttled Suncor's planning to resume production of 300,000 barrels of oil a day it has shut in. Dimitry Dayen, senior research analyst at ClearBridge Investments, said he is expecting another week of a shutdown in Canada. The growing outages in Nigeria are also adding to a shift in sentiment across the market, he added. "The market is shifting to a more bullish camp," said Mr. Dayen, whose firm manages $104.5 billion in assets. "There is some trepidation that $50 is a near-term cap because some (producers) will start adding rigs...and that will be the next test for oil prices." Carsten Fritsch, an analyst at Germany's Commerzbank, said that test could come soon because of the outages. Analysts believe that continued sabotage of Nigeria's oil infrastructure means that the West African nation is now producing about one million barrels a day, down 1.2 million barrels a day from its 2015 average. The Energy Aspects think tank has forecast that disruptions will remove an average of 3.2 million barrels a day of global production from the market this month. U.S. stockpile data set for release Wednesday is also likely to show a rare decrease, falling by 2.4 million barrels, according to The Wall Street Journal's survey of 12 analysts and brokers. It would be the second weekly decline in a row after a nearly unrelenting stream of inventory additions had put stockpiles at a record high. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 1.1-million-barrel decrease in crude supplies, a 1.9-million-barrel decline in gasoline stocks and a 2.0-million-barrel decrease in distillate inventories, according to market participants. The U.S. Energy Information Administration makes its official updates on Wednesday mornings. The decline EIA reported last week was a surprise and kick-started what appeared to be a faltering rally. Many analysts and traders have repeatedly cited high stockpiles and production around the globe and predicted the rally would quickly lose steam. It did plateau in early May, but last week's surprise drawdown on stockpiles led to the second biggest daily gain of the past month, and a steady rally since. While stockpiles and production may still be relatively high, those factors can take a backseat when investors herd into the same space, which they have been doing lately in commodities, said James Koutoulas, chief executive at Typhon Capital Management, a commodity trader in Chicago with about $100 million in assets. Many are simply buying back into oil, helping to keep the rally going even in the face of oversupply. "With momentum trades, they can last a long time," Mr. Koutoulas said. Gasoline futures rose 2.78 cents, or 1.7%, to $1.6341 a gallon, its highest settlement since Aug. 31. It has gained 13% over six-straight winning sessions. Diesel futures rose 2.73 cents, or 1.9%, to $1.4674 a gallon. It is at its highest settlement since Nov. 10 and has gained 5.3% over three-straight winning sessions. Chester Dawson and Kevin Baxter contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Oil sands; Shutdowns; Crude oil prices
Location: United States--US Nigeria Western Canada
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Marathon Oil Corp; NAICS: 486110, 324110, 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 17, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789187059
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789187059?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Brazil's Petrobras Plans New Bond Sale to Cover Expiring Debt; The world's most indebted major oil company has $13.2 billion in debt coming due this year
Author: Kiernan, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2016: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--Brazilian state-run oil company Petróleo Brasileiro SA said Tuesday it plans to issue new debt to cover a buyback of up to $3.58 billion of outstanding bonds maturing in coming years. Pending acceptance of a majority of bondholders, Petrobras is hoping to buy back "any and all" of the $576.8 million outstanding in 8.375% notes due 2018 at a small premium. In addition, plans to holding a "waterfall" tender offer to repurchase up to $3 billion in additional debt coming due as soon as next year. The purchase offers will expire June 14. The bond sale will be subject to market conditions, the firm said. Petrobras, the world's most indebted major oil company, has $13.2 billion in debt coming due this year and another $28.5 billion in maturities in the following two years. Following years of political interference in everything from fuel pricing to investment decisions, the company has been forced to write off billions of dollars in assets and has seen its cash flows squeezed by lower oil prices. Write to Paul Kiernan at paul.kiernan@wsj.com Credit: By Paul Kiernan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 17, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789209857
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789209857?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Plains All American Pipeline, Employee Face Charges in 2015 Oil Spill; Partnership operated a pipeline that ruptured a year ago, leaking oil onto beach and into the Pacific Ocean
Author: Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2016: n/a.
Abstract:
A California grand jury indicted Plains All American Pipeline LP and one of its workers on criminal charges stemming from a May 2015 oil spill near Santa Barbara that released nearly 3,000 barrels of crude onto a beach and into the Pacific Ocean, the company said Tuesday.
Full text: A California grand jury indicted Plains All American Pipeline LP and one of its workers on criminal charges stemming from a May 2015 oil spill near Santa Barbara that released nearly 3,000 barrels of crude onto a beach and into the Pacific Ocean, the company said Tuesday. The company was indicted on 46 criminal charges, including four felonies, according to state and county officials. Plains was charged with felony violations regarding hazardous releases into state waters and with misdemeanor violations relating to how the spill was reported to state officials. Three dozen of the charges against the Houston-based pipeline giant are related to the oil spill's impact on wildlife. Plains faces as much as $2.8 million in fines, officials said. James Buchanan, an employee of Plains, was indicted on three criminal charges for failing to provide timely notice of the spill. Mr. Buchanan declined to comment. "This conduct is criminal and today's charges serve as a powerful reminder of the consequences that flow from jeopardizing the well-being of our ecosystems and public health," California Attorney General Kamala Harris, who also is running for the U.S. Senate, said in a statement. Ms. Harris said Plains has been "less than cooperative" throughout the investigation. "There will be a consequence and accountability in this case," she said. Plains said in a news release Tuesday that it is deeply disappointed by California officials' decision to pursue criminal charges. The company said that it has cooperated fully with government agencies and investigators "to make good on our commitment to do the right thing." "Neither the company nor any of its employees engaged in any criminal behavior at any time in connection with this accident," the company said. "We will vigorously defend ourselves against these charges and are confident we will demonstrate that the charges have no merit." The pipeline that Plains operates was built to carry up to 150,000 barrels a day of crude on a route that hugs the coast near scenic Highway 101. The pipeline broke open near Santa Barbara, fouling a state beach and creating a miles-long slick in the ocean. Plains said in a securities filing earlier this month that its worst-case estimate for the spill is that more than 123,000 gallons of crude, or roughly 3,000 barrels of oil, were released on land and in the water. Pipeline corrosion caused the break and Plains's inspection tools didn't accurately assess maintenance problems on the pipe, according to a preliminary report from federal pipeline regulators released in February. The pipeline was inspected a few weeks before the spill, but the resulting data hadn't been analyzed by the time the pipeline broke. Lawmakers have criticized Plains over its response to the leak. The company shut the line down at 11:30 a.m. because of problems with pumps that push oil through the line, but the leak began about 35 minutes earlier, regulators have said. Plains sent workers to the area after a local fire station got a call about a petroleum smell, but didn't notify federal authorities of the precise location of the break until nearly 3 p.m., according to a timeline the company provided federal lawmakers. The company workers had a hard time finding the exact source of the oil. Then notification was further delayed when employees in a nearby office had trouble reaching workers at the scene to get more information, because those workers were busy trying to keep more oil from flowing toward the ocean. Regulators ordered Plains to shut down the broken line and another pipe they said was susceptible to the same type of issues. Neither line has been restarted. The U.S. Department of Justice has also opened an investigation into whether Plains broke any federal laws, including potential violations of the Clean Water Act. The company has said it is cooperating with the DOJ investigation. The Justice Department declined to comment. Plains estimates that it will ultimately pay $269 million to resolve the incident, including the cost of the emergency response and cleanup, claim settlements, and fines and legal penalties. Tess Stynes contributed to this article. Write to Alison Sider at alison.sider@wsj.com Credit: By Alison Sider
Subject: Oil spills; Pipelines; Indictments
Location: California Pacific Ocean Santa Barbara California
People: Harris, Kamala
Company / organization: Name: Plains All American Pipeline LP; NAICS: 486110; Name: Senate; NAICS: 921120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 17, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789278731
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789278731?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
EnerVest Buys Assets From Ares-Backed BlackBrush Oil & Gas
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2016: n/a.
Abstract:
The properties are 60% and "are adjacent to the BlackBrush acquisition," according to the release. Since September, EnerVest said it has acquired $1.3 billion of assets from three entities in a concentrated part of Karnes County, Texas.
Full text: EnerVest Ltd. said it recently agreed to acquire assets from BlackBrush Oil & Gas LP, a portfolio company of Ares Management LP. The assets, 75% of which are operated, are in Eagle Ford Shale basin. The sellers will retain a minority ownership stake in the remaining assets of BlackBrush. The acquisition is expected to close in June, according to a news release. EnerVest also said it acquired assets from affiliates of GulfTex. The properties are 60% and "are adjacent to the BlackBrush acquisition," according to the release. Since September, EnerVest said it has acquired $1.3 billion of assets from three entities in a concentrated part of Karnes County, Texas. Combined, the acquired properties produce more than 17,000 barrels of oil equivalent a day. EnerVest manages a family of private-equity funds that invests in oil and natural-gas properties throughout the U.S. The Houston firm also manages publicly traded entity EV Energy Partners LP. New York firm Ares acquired San Antonio-based BlackBrush from EIG Global Energy LLC Partners and Tailwater Capital LLC in 2014.
Subject: Acquisitions & mergers; Equity stake; Equity funds
Location: Texas United States--US Karnes County Texas New York
Company / organization: Name: EV Energy Partners LP; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 17, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789283107
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789283107?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Inventories Expected to Decline; The survey from the Energy Information Administration is due at 10:30 a.m. EDT Wednesday
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2016: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 1.1-million-barrel decrease in crude supplies, a 1.9-million-barrel decline in gasoline stocks and a 2.0-million-barrel decrease in distillate inventories, according to market participants.
Full text: U.S. crude-oil stockpiles are expected to decrease in data due Wednesday from the Department of Energy, according to a survey of analysts by The Wall Street Journal. U.S. oil inventories declined by 2.4 million barrels in the week ended May 13, according to the average estimate of the 12 analysts surveyed. Eleven analysts expect stockpiles to fall, while one projects a rise. Forecasts range from a decrease of 4.7 million barrels to an increase of 2 million barrels. The closely watched survey from the Energy Information Administration is due at 10:30 a.m. EDT Wednesday. Gasoline stockpiles are expected to fall by 600,000 barrels, according to analysts. Eight analysts are calling for a decline, and four expect a rise. Estimates range from a fall of 2 million barrels to a rise of 1.5 million barrels. Stocks of distillates, which include heating oil and diesel, are expected to fall by 800,000 barrels. Nine analysts expect a decline, and three expect a rise. Forecasts range from a decline of 3 million barrels to an increase of 600,000 barrels. Refinery use is seen expanding by 0.7 percentage point to 89.8% of capacity, based on EIA data. Nine analysts expect a rise, one expects a fall and two didn't report expectations. Forecasts range from a decrease of 0.5 point to an increase of 1.2 points. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 1.1-million-barrel decrease in crude supplies, a 1.9-million-barrel decline in gasoline stocks and a 2.0-million-barrel decrease in distillate inventories, according to market participants. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Inventory; Price increases
Location: United States--US
Company / organization: Name: Department of Energy; NAICS: 926130; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 17, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789295736
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789295736?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shale Drillers' Key to Survival: Efficiency; Diversified players find ways to make Bakken formation pay even at low oil prices
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2016: n/a.
Abstract:
Hess, which exported the first cargo of Bakken crude from the U.S. Gulf Coast last month, says it is implementing lean manufacturing techniques borrowed from Toyota Motor Corp. such as just-in-time supply chain logistics and greater use of standardized parts.\n
Full text: WILLISTON, N.D.--Amid the abandoned worker camps, idled drilling rigs and empty field-office parking lots of western North Dakota, a shale industry reshaped by the oil-price collapse is beginning to emerge. As the number of failed operators mounts, the surviving companies are laying the groundwork for what they forecast will be an era of slower but steadier growth in the state at the epicenter of the U.S.'s energy boom. Cash-strapped operators are dialing back or abandoning North Dakota. But the survivors--many of which are bigger and more diversified players--are finding ways to make the Bakken Shale formation pay even at low oil prices by trimming budgets, improving field logistics and focusing on their best assets. This downturn marks the first bust since the rise of so-called unconventional shale-oil plays nearly a decade ago, fueled by new technologies, ready access to capital and a surge in crude prices to record highs. One of the world's highest-cost oil fields, the Bakken is key test ground for the U.S. energy industry's wherewithal. "You can't shut down the Bakken. The American oil industry is getting smarter and more efficient" in how and where it drills, said Kathy Neset, a veteran geologist who owns a consultancy in Tioga, N.D. "We've still got pins on the wall," she said, pointing to a map with the location of active rigs. Active drillers include a number of diversified companies with deep pockets, such as Hess Corp., Statoil ASA of Norway and Exxon Mobil Corp. unit XTO Energy. They are targeting their richest reservoirs, getting better at pinpointing where to place drill bits and improving rig logistics so they can drill more wells faster than ever. Those highly productive new wells are partially offsetting the decline in output from older wells, including some that are being shut because their operating costs surpass the market value of their oil. While North Dakota's production is expected to fall below the million-barrel-a-day mark by early 2017 unless prices recover to above $50, it has held up better than many analysts expected. Crude prices have been rallying since hitting a 13-year low in February, and advanced to new six-month highs in recent weeks. Oil was trading above $48 a barrel on Tuesday. Just 27 drilling rigs are active in North Dakota, matching a low last seen in July 2005 and down from an all-time high of 218 in 2012, according to the state's Department of Mineral Resources. But data from the Energy Information Administration show output per rig has increased by more than one-third over the past year in the Bakken. Exxon Mobil increased net production in the Bakken and another shale play in Texas called the Permian by nearly 25% last year. "With cash operating cost at less than $10 per barrel, our Bakken and Permian developments remain attractive and competitive even in the current environment," CEO Rex Tillerson told investors on a conference call in March. Still, North Dakota doesn't foresee a broad-based increase in drilling until prices stabilize above $60 a barrel, and few expect the heady days of 200-plus rigs to return. The spare capacity being eliminated won't come back even if crude prices rise, officials say, as operators have learned to do more with less equipment and fewer workers. At Statoil, the rig count in North Dakota is down to just one from a high of 16 in 2013. The company, which says the wells being drilled now are profitable at current prices, is benchmarking its North Dakota and Texas operations to optimize drilling times and shrink costs in what it calls a "perfect well" program. "If we make the right calls in 2016, it's going to define the next decade," Torgrim Reitan, Statoil's Houston-based executive vice president for U.S. operations, said in an interview. Mr. Reitan said that even with higher prices, growth will remain subdued as the industry has learned to do more with fewer rigs and workers. "We will not go back to the activity levels we used to have," he said. The Bakken region in Western North Dakota and Eastern Montana has lost at least 20,000 jobs since employment peaked at more than 110,000 workers across all sectors in late 2014, according to a Federal Reserve Bank of Minneapolis analysis of U.S. Bureau of Labor Statistics data. Average well drilling and completion costs have come down by nearly a third across all major U.S. shale plays from peak levels in 2012, but the EIA says Bakken Shale wells remain the most costly due mostly to their depth. Hess, which exported the first cargo of Bakken crude from the U.S. Gulf Coast last month, says it is implementing lean manufacturing techniques borrowed from Toyota Motor Corp. such as just-in-time supply chain logistics and greater use of standardized parts. It is operating three rigs, down from a high of 17 in 2014, but it has increased the number of wells drilled per rig to 22 a year, up from 16 wells a year 18 months ago. Standing near a quartet of pump jacks surrounded by farm land, David McKay, the vice president of what Hess calls its Bakken "Well Factory," credits the downturn for forcing producers to rethink their operations. "There was a time when we were all cheeks and heels" in the rush to boost output, he said in an interview. "The slowdown actually has helped convince people of the need to do everything more efficiently," he said. Mr. McKay says those efforts have reduced completion costs by one-third over the past 12 months to around $2 million per well, cut the time it takes to frack a well to one day from up to three days two years ago, and boosted average initial well production by up to 20%. Lynn Helms, North Dakota's top energy regulator, expects the slump will thin the herd of operators. "That's what's coming," he said earlier this year. "We'll see companies in financial distress be aggregated by some of the larger companies." Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Drilling; Energy economics; Energy industry; Price increases
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: XTO Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 17, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789299605
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789299605?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon Is Big Tobacco? Tell Me Another; The corrupt Medicaid deal propped up tobacco stocks and government revenue.
Author: Jenkins, Holman W, Jr
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 May 2016: n/a.
Abstract: None available.
Full text: Before anyone collapses uncritically in front of the claim by activist groups and liberal politicians that they are doing to Exxon Mobil what they did to tobacco, readers might want to take a look at tobacco stock prices. Yup, all up strongly since the 1998 "master settlement agreement" that 46 states imposed on Big Tobacco ostensibly as punishment for its sins. How was the industry expected to pay $246 billion in alleged Medicaid damages? By selling more cigarettes, of course, now helped by a government-orchestrated pricing cartel, with the profits equitably shared between the companies, the pols and the buccaneers of the trial bar. A decade later, the American Bar Association Journal would look back and conclude: "The only big winners in the litigation appear to be the tobacco companies, the state treasurers and the lawyers who represented both sides." So obviously corrupt was the outcome that it had one salutary effect: It capped the careers of the ambitious state pols who promoted this travesty. Hubert Humphrey III, possessor of Minnesota's most illustrious name, finished last in a three-man governor's race. Texas AG Dan Morales went to jail for creating fake documents in an attempt to secure a slice of the state's windfall for a law-school buddy. Dickie Scruggs, most prominent of the anti-tobacco lawyers, would later go to jail for bribing a judge. One wonders if New York Attorney General Eric Schneiderman and California's Kamala Harris, who keep trumpeting the tobacco precedent while attacking Exxon, really have given their analogy the due diligence it deserves. On the advice of their lawyers, tobacco executives pretended not to know what their own warning labels said, which became their main source of legal jeopardy. In allegedly parallel fashion, Exxon is accused of knowing about the science of climate change, and casting doubt on the science of climate change. The problem is, knowing and doubting are the same when it comes to the iffy claims of climate science at its current state of development. Rhode Island's Sheldon Whitehouse, in his latest unattended Senate soliloquy demanding a federal RICO investigation of Exxon, claims that "real science continues to prove the connection between carbon pollution and the startling changes we see in our climate and oceans." He certainly didn't get this from the latest report of the Intergovernmental Panel on Climate Change, sharer of Al Gore's Nobel Prize. While insisting that climate models have "improved steadily," the group abandons its central forecast of three degrees Celsius of warming from a doubling of atmospheric carbon-dioxide and offers no central forecast at all. Where it once said warming of less than 1.5 C would be "very unlikely," now it says warming of less than 1 C would be "extremely unlikely." With these adjustments, even a politicized, orthodoxy-prone IPCC recognizes an emerging shake-up in climate science. After 200 years of prolific coal burning, after 30 years of increasingly rigorous temperature measurement, data from the actual atmosphere no longer are being treated as an inconvenience by climate modelers. Now these real-world data are driving new estimates of climate sensitivity--and, lo, these estimates suggest a net impact at the very low end of previous standard forecasts. Exxon never denied the risk of human influence on climate, as even the exposés generated by compliant media can't help showing. Its real sin, aside from consorting with researchers with a penchant for realism, was criticizing policy proposals that would be enormously costly while having vanishingly small effect on atmospheric carbon-dioxide. Transportation fuels account for less than 15% of global emissions, and Exxon's production accounts for just 4% of transportation fuels. If the U.S. government were looking for somebody to sue over climate change--or, more to the point, over climate-change hypocrisy--it would do better to look in the mirror. As a recent paper by the nonprofit National Bureau of Economic Research put it, "Coal mined on federally managed lands accounts for approximately 40% of U.S. coal consumption and 13% of total U.S. energy-related CO2 emissions." He now criticizes the 1998 tobacco settlement, but activist Matt Myers and his group Tobacco-Free Kids walked away with a healthy share of the proceeds. Meanwhile, the states quickly reneged on their own promise to spend the proceeds on anti-smoking programs. And, just this month, a Food and Drug Administration effort to shut down e-cigarettes was quietly applauded by state treasurers and conventional cigarette companies as a step to uphold their revenue from the traditional tobacco products covered in the settlement. As Donald Trump might say, nobody ever went broke emphasizing the dishonesty and opportunism of the U.S. political class, including the activist class. That's your most reliable forecast for how an Exxon lawsuit might play out. Credit: By Holman W. Jenkins, Jr.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 17, 2016
column: Business World
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789312962
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789312962?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Outages Drive Brent Oil Closer to $50; July Brent crude rose $0.17 to $49.45 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2016: n/a.
Abstract:
Oil prices hiked overnight, propelled by reports that Canadian forest fires forced more oil-site evacuations, threatening to delay the return of at least one million barrels a day of Canadian oil-sands production to the market.
Full text: International Brent crude benchmark crawled closer to $50 a barrel in early Asian trade Wednesday as outages in Africa and Canada and production declines outside of the Middle East region fuelled expectations of a tighter supply market. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $48.47 a barrel at 0125 GMT, up $0.16 in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose $0.17 to $49.45 a barrel. Brent prices was last above $50 in November last year. "While $50 sounds high today, this time two years ago it was about $100. I continue to believe from now going into 2017 dips should be bought as the market rebalances," said Stuart Ive, a client manager at the Wellington-based OM Financial. Oil prices hiked overnight, propelled by reports that Canadian forest fires forced more oil-site evacuations, threatening to delay the return of at least one million barrels a day of Canadian oil-sands production to the market. Continuing military attacks on oil infrastructures in Nigeria and instability in Libya have also curtailed the countries' oil operations. Meanwhile, output from heavyweight Latin American oil producers is likely to slip 2.4% on-year in 2016 by 250,000 barrels a day due to scant investment, said BMI Research. All these factors underpin the upbeat views by International Energy Agency that global oil is entering a phase of rebalancing. Goldman Sachs said the market has already flipped into a deficit. Adding to the bullishness is the expectation for U.S. crude stocks to contract further. U.S. stockpile data set for release later Wednesday is likely to show a decrease of 2.4 million barrels, according to The Wall Street Journal's survey of analysts and brokers. It would be the second weekly decline in a row after a nearly unrelenting stream of inventory additions had put stockpiles at a record high. Encouraging demand outlook is also prompting buying behavior. "India demand has been exceptional year to date and demand in China is being supported by increased infrastructure spending in addition to demand for transport fuels," said Neil Beveridge, senior analyst at Bernstein Research. Still, not all market watchers are optimistic about the sustainability of the rally. Tim Evans, an energy analyst at Citi Futures, pointed out total production from Organization of the Petroleum Exporting Countries has increased in April and the uptrend is likely to continue in May. "With production from Kuwait likely rebounding from the April rate, some further increase from Iran, and Saudi Arabia having at least the potential to produce some additional barrels in the weeks ahead, we see a clear possibility that OPEC production for May could be higher still," he said. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--rose 109 points to $1.6450 a gallon, while June diesel traded at $1.4716, 42 points higher. ICE gasoil for June changed hands at $439.75 a metric ton, up $2.75 from Tuesday's settlement. Timothy Puko contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Supply & demand; Futures; Price increases
Location: United States--US Canada Africa Middle East
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Goldman Sachs Group Inc; NAICS: 523110, 5231 20; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789314884
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789314884?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shale Drillers' Key to Survival: Efficiency; Diversified players find ways to make Bakken formation pay even at low oil prices
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2016: n/a.
Abstract:
Hess, which exported the first cargo of Bakken crude from the U.S. Gulf Coast last month, says it is implementing lean manufacturing techniques borrowed from Toyota Motor Corp. such as just-in-time supply chain logistics and greater use of standardized parts.\n
Full text: WILLISTON, N.D.--Amid the abandoned worker camps, idled drilling rigs and empty field-office parking lots of western North Dakota, a shale industry reshaped by the oil-price collapse is beginning to emerge. As the number of failed operators mounts, the surviving companies are laying the groundwork for what they forecast will be an era of slower but steadier growth in the state at the epicenter of the U.S.'s energy boom. Cash-strapped operators are dialing back or abandoning North Dakota. But the survivors--many of which are bigger and more diversified players--are finding ways to make the Bakken Shale formation pay even at low oil prices by trimming budgets, improving field logistics and focusing on their best assets. This downturn marks the first bust since the rise of so-called unconventional shale-oil plays nearly a decade ago, fueled by new technologies, ready access to capital and a surge in crude prices to record highs. One of the world's highest-cost oil fields, the Bakken is key test ground for the U.S. energy industry's wherewithal. "You can't shut down the Bakken. The American oil industry is getting smarter and more efficient" in how and where it drills, said Kathy Neset, a veteran geologist who owns a consultancy in Tioga, N.D. "We've still got pins on the wall," she said, pointing to a map with the location of active rigs. Active drillers include a number of diversified companies with deep pockets, such as Hess Corp., Statoil ASA of Norway and Exxon Mobil Corp. unit XTO Energy. They are targeting their richest reservoirs, getting better at pinpointing where to place drill bits and improving rig logistics so they can drill more wells faster than ever. Those highly productive new wells are partially offsetting the decline in output from older wells, including some that are being shut because their operating costs surpass the market value of their oil. While North Dakota's production is expected to fall below the million-barrel-a-day mark by early 2017 unless prices recover to above $50, it has held up better than many analysts expected. Crude prices have been rallying since hitting a 13-year low in February, and advanced to new six-month highs in recent weeks. Oil was trading above $48 a barrel on Tuesday. Just 27 drilling rigs are active in North Dakota, matching a low last seen in July 2005 and down from an all-time high of 218 in 2012, according to the state's Department of Mineral Resources. But data from the Energy Information Administration show output per rig has increased by more than one-third over the past year in the Bakken. Exxon Mobil increased net production in the Bakken and another shale play in Texas called the Permian by nearly 25% last year. "With cash operating cost at less than $10 per barrel, our Bakken and Permian developments remain attractive and competitive even in the current environment," CEO Rex Tillerson told investors on a conference call in March. Still, North Dakota doesn't foresee a broad-based increase in drilling until prices stabilize above $60 a barrel, and few expect the heady days of 200-plus rigs to return. The spare capacity being eliminated won't come back even if crude prices rise, officials say, as operators have learned to do more with less equipment and fewer workers. At Statoil, the rig count in North Dakota is down to just one from a high of 16 in 2013. The company, which says the wells being drilled now are profitable at current prices, is benchmarking its North Dakota and Texas operations to optimize drilling times and shrink costs in what it calls a "perfect well" program. "If we make the right calls in 2016, it's going to define the next decade," Torgrim Reitan, Statoil's Houston-based executive vice president for U.S. operations, said in an interview. Mr. Reitan said that even with higher prices, growth will remain subdued as the industry has learned to do more with fewer rigs and workers. "We will not go back to the activity levels we used to have," he said. The Bakken region in Western North Dakota and Eastern Montana has lost at least 20,000 jobs since employment peaked at more than 110,000 workers across all sectors in late 2014, according to a Federal Reserve Bank of Minneapolis analysis of U.S. Bureau of Labor Statistics data. Average well drilling and completion costs have come down by nearly a third across all major U.S. shale plays from peak levels in 2012, but the EIA says Bakken Shale wells remain the most costly due mostly to their depth. Hess, which exported the first cargo of Bakken crude from the U.S. Gulf Coast last month, says it is implementing lean manufacturing techniques borrowed from Toyota Motor Corp. such as just-in-time supply chain logistics and greater use of standardized parts. It is operating three rigs, down from a high of 17 in 2014, but it has increased the number of wells drilled per rig to 22 a year, up from 16 wells a year 18 months ago. Standing near a quartet of pump jacks surrounded by farm land, David McKay, the vice president of what Hess calls its Bakken "Well Factory," credits the downturn for forcing producers to rethink their operations. "There was a time when we were all cheeks and heels" in the rush to boost output, he said in an interview. "The slowdown actually has helped convince people of the need to do everything more efficiently," he said. Mr. McKay says those efforts have reduced completion costs by one-third over the past 12 months to around $2 million per well, cut the time it takes to frack a well to one day from up to three days two years ago, and boosted average initial well production by up to 20%. Lynn Helms, North Dakota's top energy regulator, expects the slump will thin the herd of operators. "That's what's coming," he said earlier this year. "We'll see companies in financial distress be aggregated by some of the larger companies." Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Drilling; Energy economics; Energy industry; Price increases
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: XTO Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 18, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789316494
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789316494?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Erases Gains as Dollar Strengthens; U.S. currency gains strength after release of Federal Reserve minutes, pushing down crude
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2016: n/a.
Abstract:
Reports on Tuesday that the Canadian forest fires forced more oil-site evacuations were a bullish signal for traders, threatening to delay the return of at least one million barrels a day of Canadian oil-sands production to the market.
Full text: NEW YORK--Oil prices fell Wednesday, erasing earlier gains, as a strong dollar outweighed signs of robust demand for refined products such as gasoline. U.S. crude for June delivery settled down 12 cents, or 0.2%, at $48.19 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 35 cents, or 0.7%, to $48.93 a barrel on ICE Futures Europe. Earlier in the session, prices were on track to settle at a new 2016 high. Futures pared gains after minutes of the Federal Reserve's April meeting indicated that the central bank could raise interest rates as soon as June , causing the dollar to jump. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, recently rose 0.7%. A stronger U.S. currency makes dollar-traded oil more expensive for foreign buyers. Oil futures had surged in recent sessions as outages in Africa and Canada and production declines in the U.S. fueled expectations of a tighter supply. Some analysts warn that the price could be due for a pullback, as the market remains oversupplied. "With oil now at almost $50/bbl., we feel that markets have moved too high, too far, too soon," said analysts at BNP Paribas in a note. "The much-anticipated rebalancing of the market may take more time." Others disagree. U.S. crude-oil inventories unexpectedly rose by 1.3 million barrels to 541.3 million barrels in the week ended May 13, the Energy Information Administration said Wednesday. But stockpiles of refined products including gasoline and distillates such as diesel fuel fell by more than crude-oil inventories rose. Demand for refined products rose to more than 20 million barrels a day, the EIA estimated, the highest weekly level since January. "We did have a hefty drawdown in gasoline and distillates," said Peter Cardillo, chief market economist at First Standard Financial. "It's going to support higher prices in the short term...I think $50 is around the corner." Gasoline futures settled up 1.48 cents, or 0.9%, to $1.6489 a gallon, the highest settlement since August. Diesel futures rose 1.57 cents, or 1.1%, to $1.4831 a gallon, the highest level since November. Imports from Canada to the Midwest fell, reflecting lower Canadian oil-sands production following the wildfires there. But imports to the Gulf Coast rose by a larger amount, which "highlights the overall robust global supply picture," said Kyle Cooper, analyst at IAF Advisors in Houston. Production disruptions around the globe continue to be a driver for oil prices. Reports on Tuesday that the Canadian forest fires forced more oil-site evacuations were a bullish signal for traders, threatening to delay the return of at least one million barrels a day of Canadian oil-sands production to the market. Chelsey Dulaney and Georgi Kantchev contributed to this article Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Supply & demand; Prices; Inventory
Location: United States--US Canada
Company / organization: Name: BNP Paribas; NAICS: 522110; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 18, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789325227
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789325227?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Canada Wildfires Raise Threat to Oil-Sands Mining Operations; Latest flare up has forced some oil sands operators to abandon plans laid last week to restart production
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2016: n/a.
Abstract:
Related * Canada Wildfire Raises Safety Issues Close to Home (May 16) * Fires in Canada's Oil-Sands Region Grow (May 7) * Canada Wildfires Spread in Oil-Sands Region (May 5) "The oil sands facilities still, at this point, have had the fire burn up around some edges, but it's something that's held there," Chad Morrison, the Alberta forest ministry's chief wildfire official, said in a teleconferenced town hall with Fort McMurray evacuees.
Full text: CALGARY, Alberta--Forest fires in Northern Alberta spread to the edges of two major oil-sands mining complexes, government officials said on Tuesday, a day after 8,000 workers evacuated camps and production facilities at risk from uncontrolled blazes. Two weeks after fires forced 80,000 residents to leave a northern town at the hub of the energy industry, shutdowns at many oil-sands sites have reduced Canadian production by at least one million barrels of oil a day, or about 40% of the country's total oil-sands output. The latest flare up has forced some oil sands operators to abandon plans laid last week to restart production. The production disruption has contributed to a recent rise in oil prices. On Tuesday, light, sweet crude for June delivery settled up 59 cents, or 1.2%, at $48.31 a barrel on the New York Mercantile Exchange, the highest settlement since Oct. 9. Alberta Premier Rachel Notley said the fires approached the doorstep of oil-sands mines operated by industry leader Suncor Energy Inc. and its subsidiary Syncrude north of the town of Fort McMurray, which the blaze devastated this month. Provincial government officials said by late Tuesday firefighters succeeded in halting the advance of the flames to the south and west perimeters of those facilities, and that weather conditions were expected to help slow the spread of the fires later this week. Related * Canada Wildfire Raises Safety Issues Close to Home (May 16) * Fires in Canada's Oil-Sands Region Grow (May 7) * Canada Wildfires Spread in Oil-Sands Region (May 5) "The oil sands facilities still, at this point, have had the fire burn up around some edges, but it's something that's held there," Chad Morrison, the Alberta forest ministry's chief wildfire official, said in a teleconferenced town hall with Fort McMurray evacuees. "In the coming days, we expect the weather to improve and [that] we'll continue to have more success with our firefighting," he said. Suncor has closed down production of 300,000 barrels of oil a day at two mines and a pair of oil-sands well sites, and its Syncrude unit has shut its 350,000-barrel-a-day-capacity mines. The Suncor and Syncrude facilities nearest to the fires are about 4 miles from one another, separated by a barren stretch of reclaimed land and man-made ponds filled with waste materials from the mines. Syncrude has evacuated all but about 100 staff needed "to maintain the safety and stability" of operations at its Aurora and Mildred Lake mines, a company spokesman said. It has plans in place to evacuate those remaining workers if needed, he said. Suncor said it was relocating nonessential workers in the area to camps farther north that aren't part of the evacuation order. Representatives for both operations expressed confidence their production facilities faced little direct threat from the fires. Key equipment such as upgraders that partially refine crude oil is located hundreds of yards from any flammable vegetation and is protected by sprinkler systems and firefighting equipment such as bulldozers, firetrucks and water pumps, they said. While not damaged, these and other oil sands sites have been affected by staffing issues stemming from the evacuation of Fort McMurray's residents and logistics issues preventing them from shipping heavy crude. Pipeline operator Enbridge Inc. has reduced its oil-sands crude shipments by about 900,000 barrels a day, down from a capacity of 1.5 million barrels a day. The forest fire around these mines and other oil sands sites grew to more than 877,000 acres, or nearly 1,370 square miles, up from 704,250 acres on Monday, according to the province. The fire's expansion led to the evacuations of nearly 20 worker camps late Monday. That included a 655-unit lodge operated by Horizon North Logistics Inc., which caught fire early Tuesday, the company and provincial officials said. Other sites subject to the mandatory evacuation order include an oil-sands projects owned by Marathon Oil Corp. and another owned by PetroChina unit Brion Energy, according to the Regional Municipality of Wood Buffalo. The government said the fire posed a renewed threat to neighborhoods in northwestern Fort McMurray, which has lost some 2,400 houses and other buildings since the fire was first detected on May 1. The cause remains under investigation. Thick smoke and fire risks have postponed efforts to restore utilities and plans for some retail business operations to resume in the town, officials said. Two unexplained explosions damaged homes late Monday in residential neighborhoods in Fort McMurray, they said. The outages are expected to have a minimal impact on Canadian economic growth, according to a report from the Conference Board of Canada released early Tuesday. The Ottawa think tank bases its findings on an estimated oil-production loss of about 1.2 million barrels a day over a two-week period. The Conference Board's findings are based on information available before the latest evacuations. The latest setback could result in a "bigger [production] hit" in May, but the industry will likely make up that lost output in June, assuming operations resume, said Pedro Antunes, the Conference Board's deputy chief economist. Similarly, efforts to rebuild the oil-sands region will help to offset the decline in economic growth caused by the fires, Mr. Antunes said. Ben Dummett contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com Corrections & Amplifications Marathon Oil Corp. is a nonoperating producer at oil-sands projects in Fort McMurray. An earlier version of this article incorrectly implied the company is an oil-sands-project operator. Credit: By Chester Dawson
Subject: Oil sands; Mines; Public officials; Workers; Forest & brush fires; Energy industry; Sprinkler systems
People: Notley, Rachel
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 18, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789335689
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789335689?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Wildfires Encroach On Canada Oil-Sands
Author: Dawson, Chester
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 May 2016: A.9.
Abstract:
Provincial government officials said that by late Tuesday firefighters had succeeded in halting the fires to the south and west perimeters of oil-sands mines operated by industry leader Suncor Energy Inc. and its subsidiary Syncrude.
Full text: CALGARY, Alberta -- Forest fires in northern Alberta spread to the edges of two major oil-sands mining complexes, government officials said Tuesday, a day after 8,000 workers evacuated camps and production facilities at risk from uncontrolled blazes. Provincial government officials said that by late Tuesday firefighters had succeeded in halting the fires to the south and west perimeters of oil-sands mines operated by industry leader Suncor Energy Inc. and its subsidiary Syncrude. "In the coming days, we expect the weather to improve and [that] we'll continue to have more success with our firefighting," said Chad Morrison, the Alberta forest ministry's chief wildfire official, said in a teleconferenced town hall with evacuees of Fort McMurray, the northern town at the hub of the energy industry that was devastated by the blaze this month. Shutdowns at many oil-sands sites have reduced production by at least one million barrels of oil a day, or about 40% of the country's oil-sands output. The latest flare-up has forced some oil-sands operators to abandon plans laid last week to restart production. Syncrude has evacuated all but about 100 staff needed "to maintain the safety and stability" of operations at its Aurora and Mildred Lake mines, a spokesman said. Suncor said it was relocating nonessential workers to camps farther north. Equipment such as upgraders that partially refine crude oil are located hundreds of yards from any flammable vegetation and are protected by sprinkler systems and firefighting equipment, company representatives said. Credit: By Chester Dawson
Subject: Mines; Evacuations & rescues; Oil sands; Forest & brush fires
Location: Alberta Canada
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.9
Publication year: 2016
Publication date: May 18, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789404571
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789404571?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Plains Faces Charges Over 2015 Oil Spill
Author: Sider, Alison
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 May 2016: B.2.
Abstract:
A California grand jury indicted Plains All American Pipeline LP and one of its workers on criminal charges stemming from a May 2015 oil spill near Santa Barbara that released nearly 3,000 barrels of crude onto a beach and into the Pacific Ocean, the company said Tuesday.
Full text: A California grand jury indicted Plains All American Pipeline LP and one of its workers on criminal charges stemming from a May 2015 oil spill near Santa Barbara that released nearly 3,000 barrels of crude onto a beach and into the Pacific Ocean, the company said Tuesday. The company was indicted on 46 criminal charges, including four felonies, according to state and county officials. Plains was charged with felony violations regarding hazardous releases into state waters and with misdemeanor violations relating to how the spill was reported to state officials. Three dozen of the charges against the Houston-based pipeline giant are related to the oil spill's impact on wildlife. Plains faces as much as $2.8 million in fines, officials said. James Buchanan, an employee of Plains, was indicted on three criminal charges for failing to provide timely notice of the spill. Mr. Buchanan declined to comment. "This conduct is criminal and today's charges serve as a powerful reminder of the consequences that flow from jeopardizing the well-being of our ecosystems and public health," California Attorney General Kamala Harris, who also is running for the U.S. Senate, said in a statement. Plains said in a news release Tuesday that it is deeply disappointed by California officials' decision to pursue criminal charges. "Neither the company nor any of its employees engaged in any criminal behavior at any time in connection with this accident," the company said. "We will vigorously defend ourselves against these charges and are confident we will demonstrate that the charges have no merit." Credit: By Alison Sider
Subject: Indictments; Pipelines; Oil spills
Location: Santa Barbara California
Company / organization: Name: Plains All American Pipeline LP; NAICS: 486110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: May 18, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789404586
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789404586?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Drillers Streamline to Stay Afloat --- Oil slump led many Bakken Shale firms to fail; bigger players focus on efficiency
Author: Dawson, Chester
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 May 2016: B.1.
Abstract:
Hess, which exported the first cargo of Bakken crude from the U.S. Gulf Coast last month, says it is implementing lean manufacturing techniques borrowed from Toyota Motor Corp. such as just-in-time supply chain logistics and greater use of standardized parts.\n
Full text: WILLISTON, N.D. -- Amid the abandoned worker camps, idled drilling rigs and empty field-office parking lots of western North Dakota, a shale industry reshaped by the oil-price collapse is beginning to emerge. As the number of failed operators mounts, the surviving companies are laying the groundwork for what they forecast will be an era of slower but steadier growth in the state at the epicenter of the U.S.'s energy boom. Cash-strapped operators are dialing back or abandoning North Dakota. But the survivors -- many of which are bigger and more diversified players -- are finding ways to make the Bakken Shale formation pay even at low oil prices by trimming budgets, improving field logistics and focusing on their best assets. This downturn marks the first bust since the rise of so-called unconventional shale-oil plays nearly a decade ago, fueled by new technologies, ready access to capital and a surge in crude prices to record highs. One of the world's highest-cost oil fields, the Bakken is key test ground for the U.S. energy industry's wherewithal. "You can't shut down the Bakken. The American oil industry is getting smarter and more efficient" in how and where it drills, said Kathy Neset, a veteran geologist who owns a consultancy in Tioga, N.D. "We've still got pins on the wall," she said, pointing to a map with the location of active rigs. Active drillers include a number of diversified companies with deep pockets, such as Hess Corp., Statoil ASA of Norway and Exxon Mobil Corp. unit XTO Energy. They are targeting their richest reservoirs, getting better at pinpointing where to place drill bits and improving rig logistics so they can drill more wells faster than ever. Those highly productive new wells are partially offsetting the decline in output from older wells, including some that are being shut because their operating costs surpass the market value of their oil. While North Dakota's production is expected to fall below the million-barrel-a-day mark by early 2017 unless prices recover to above $50, it has held up better than many analysts expected. Crude prices have been rallying since hitting a 13-year low in February, and advanced to new six-month highs in recent weeks. Oil was trading above $48 a barrel on Tuesday. Just 27 drilling rigs are active in North Dakota, matching a low last seen in July 2005 and down from an all-time high of 218 in 2012, according to the state's Department of Mineral Resources. But data from the Energy Information Administration show output per rig has increased by more than one-third over the past year in the Bakken. Exxon Mobil increased net production in the Bakken and another shale play in Texas called the Permian by nearly 25% last year. "With cash operating cost at less than $10 per barrel, our Bakken and Permian developments remain attractive and competitive even in the current environment," CEO Rex Tillerson told investors on a conference call in March. Still, North Dakota doesn't foresee a broad-based increase in drilling until prices stabilize above $60 a barrel, and few expect the heady days of 200-plus rigs to return. The spare capacity being eliminated won't come back even if crude prices rise, officials say, as operators have learned to do more with less equipment and fewer workers. At Statoil, the rig count in North Dakota is down to just one from a high of 16 in 2013. The company, which says the wells being drilled now are profitable at current prices, is benchmarking its North Dakota and Texas operations to optimize drilling times and shrink costs in what it calls a "perfect well" program. "If we make the right calls in 2016, it's going to define the next decade," Torgrim Reitan, Statoil's Houston-based executive vice president for U.S. operations, said in an interview. Mr. Reitan said that even with higher prices, growth will remain subdued as the industry has learned to do more with fewer rigs and workers. "We will not go back to the activity levels we used to have," he said. The Bakken region in western North Dakota and eastern Montana has lost at least 20,000 jobs since employment peaked at more than 110,000 workers across all sectors in late 2014, according to a Federal Reserve Bank of Minneapolis analysis of U.S. Bureau of Labor Statistics data. Average well drilling and completion costs have come down by nearly a third across all major U.S. shale plays from peak levels in 2012, but the EIA says Bakken Shale wells remain the most costly due mostly to their depth. Hess, which exported the first cargo of Bakken crude from the U.S. Gulf Coast last month, says it is implementing lean manufacturing techniques borrowed from Toyota Motor Corp. such as just-in-time supply chain logistics and greater use of standardized parts. It is operating three rigs, down from a high of 17 in 2014, but it has increased the number of wells drilled per rig to 22 a year, up from 16 wells a year 18 months ago. Standing near a quartet of pump jacks surrounded by farm land, David McKay, the vice president of what Hess calls its Bakken "Well Factory," credits the downturn for forcing producers to rethink their operations. "There was a time when we were all cheeks and heels" in the rush to boost output, he said in an interview. "The slowdown actually has helped convince people of the need to do everything more efficiently," he said. Mr. McKay says those efforts have reduced completion costs by one-third over the past 12 months to around $2 million per well, cut the time it takes to frack a well to one day from up to three days two years ago, and boosted average initial well production by up to 20%. Lynn Helms, North Dakota's top energy regulator, expects the slump will thin the herd of operators. "That's what's coming," he said earlier this year. "We'll see companies in financial distress be aggregated by some of the larger companies." Credit: By Chester Dawson
Subject: Drilling; Energy economics; Energy industry; Crude oil prices
Location: United States--US
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: May 18, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789404818
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789404818?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Brazil's Petrobras Raises $6.75 Billion From Bond Issue; Pays High Price; Brazilian state-run oil company forced to pay investors a high yield due to elevated debt levels
Author: Jelmayer, Rogerio
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2016: n/a.
Abstract: None available.
Full text: SÃO PAULO--Brazilian state-run oil company Petróleo Brasileiro SA, or Petrobras, raised a total $6.75 billion from an overseas bond issue, but it was obligated to pay a high yield to investors, due to its elevated debt. The company issued its bonds via two tranches. The first, worth $5 billion, is due in May 2021 and will pay an annual yield of 8.625%. The second tranche, totaling $1.75 billion, will pay a yield of 9% and will mature in May 2026. In June 2015, by comparison, Petrobras raised $2.5 billion, via a 100-year bond issue, with an annual yield of 8.45%. In previous years, Petrobras has tapped U.S. and European debt markets for tens of billions of dollars, paying yield-starved investors interest rates that often fell below 5%. Petrobras, the world's most indebted major oil company, has $13.2 billion in debt coming due this year and another $28.5 billion in maturities in the following two years. After years of political interference in everything from fuel pricing to investment decisions, the company has been forced to write off billions of dollars in assets and has seen its cash flows squeezed by lower oil prices. Petrobras said it plans to use the proceeds of the operation, to repurchase a total of $6 billion in outstanding bonds, up from a previously announced $3.58 billion. The company was planning to raise up to $5 billion with the issue, but increased the amount due to the strong demand. The issue attracted demand from investors of around $20 billion, according to a banker, who was involved in the transaction. BB Securities Limited, an arm of Banco do Brasil; J.P. Morgan Securities LLC; Merrill Lynch, Pierce, Fenner & Smith Incorporated; and Santander Investment Securities coordinated the operation. Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com Credit: By Rogerio Jelmayer
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 18, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789463946
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789463946?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Canada Housing Agency Projects Slowdown in Housing Starts; But the oil-price slump hurting some provinces is being offset by increased government spending
Author: George-Cosh, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2016: n/a.
Abstract:
[...]Canada Mortgage and Housing Corp. said its latest quarterly outlook for the Canadian market is slightly more positive than its prior forecast as the oil-price slump hurting some provinces is being offset by a boost to investment by the Canadian government.
Full text: Canadian housing starts are expected to ease this year and next from 2015 levels amid a slowdown in growth from oil-producing provinces, the country's housing agency said on Wednesday. Still, Canada Mortgage and Housing Corp. said its latest quarterly outlook for the Canadian market is slightly more positive than its prior forecast as the oil-price slump hurting some provinces is being offset by a boost to investment by the Canadian government. In March, Canada introduced new spending measures totaling 47 billion Canadian dollars ($36.25 billion) over the next five years in an effort to revive an economy hit by lower prices for oil and other commodities. "Increased housing starts in Ontario and (British Columbia) will be more than offset by declines in provinces affected by the drop in oil prices in 2016," said Bob Dugan, CMHC's chief economist, in a release. "Sales will reflect renewed economic growth in 2016 before falling back slightly in 2017." CMHC reiterated its earlier projection from last October that housing markets across Canada will moderate and price growth will slow over the next two years. In its second-quarter market outlook released Wednesday, the agency said housing starts are expected to range from 181,300 to 192,300 units in 2016 and from 172,600 to 183,000 units in 2017. The projections are below 2015 housing starts of 195,535 units, but reflect slight upward revisions from the agency's previous forecast last October. CMHC expects average home prices in Canada of between C$474,200 and C$495,800 this year, rising to between C$479,300 and C$501,100 in 2017. Mortgage rates are expected to remain around current levels until the end of 2016, supporting housing demand, CMHC said. Last month, the CMHC said housing markets are overvalued in nine of 15 major cities in Canada, and that there is evidence of overbuilding in seven others. In its latest report, CMHC said higher housing prices have been fueled by proportionately more sales of expensive single-detached homes across Canada, especially in British Columbia and Ontario, home to the hot markets of Vancouver and Toronto. The agency said that should change in 2017 as higher mortgage rates, declining sales of expensive homes and an increase of sales from more moderately prices homes contribute to the slower pace of price growth. Write to David George-Cosh at david.george-cosh@wsj.com Credit: By David George-Cosh
Subject: Real estate sales; Housing starts; Mortgage rates; Housing prices
Location: Canada British Columbia Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 18, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789512407
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789512407?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Winds Carry Northern Alberta Wildfires Away From Oil-Sands Sites, Fort McMurray; More favorable weather conditions, including rain, are expected to help firefighters contain flames
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2016: n/a.
Abstract:
More favorable weather conditions, including rain, are expected to help firefighters contain flames at the edge of oil-sands mines operated by Suncor Energy Inc. and its Syncrude unit, Alberta Premier Rachel Notley told reporters at a briefing in Edmonton.
Full text: CALGARY, Alberta--Forest fires in Northern Alberta continued to grow Wednesday, but local officials said winds carried the flames away from an evacuated town and oil-sands production sites that have been shut down for two weeks because of the wildfire threat. Firefighters held the line around Fort McMurray, where 2,400 homes and other buildings burned down earlier this month, and kept the fires at bay on the perimeter of two major oil-sands sites and nearby worker camps north of the remote town, the officials said. More favorable weather conditions, including rain, are expected to help firefighters contain flames at the edge of oil-sands mines operated by Suncor Energy Inc. and its Syncrude unit, Alberta Premier Rachel Notley told reporters at a briefing in Edmonton. "They've been successful in holding the fire with respect to both of those sites," said Ms. Notley. "With the weather change coming later today, the trend should reverse quite significantly" in favor of firefighting efforts, she said. Ms. Notley said the government would lift a mandatory evacuation order for residents of Fort McMurray beginning June 1, and that her government would discuss worker-housing issues with energy companies after the destruction of many homes and one work camp. More than 80,000 of the town's residents were forced to evacuate and remain displaced. The fires continued to grow to the east of Fort McMurray and cover more than one million acres, up from around 877,000 Tuesday. Hot, dry conditions this week posed a risk to the Suncor and Syncrude mining and crude-oil-processing complexes and worker camps north of Fort McMurray, where 8,000 workers were evacuated on Monday because of a resurgent threat from the blaze. "The fire hasn't encroached as far as we first feared, but it has burned up around the edges" of the two sites, said Chad Morrison, the Alberta forest ministry's chief wildfire official, at a news conference. Oil-sands site shutdowns have reduced Canadian oil production by at least one million barrels a day, or about 40% of the country's total oil-sands output. The continued spread of fires has forced some oil-sands operators to abandon plans laid last week to restart production. Production disruptions have contributed to a recent rise in oil prices. On Wednesday, crude prices settled down slightly in New York at $48.19 barrel. Suncor has closed down production of 300,000 barrels of oil a day at two mines and a pair of oil-sands well sites, and its Syncrude unit has shut its 350,000-barrel-a-day-capacity mines. The Suncor and Syncrude facilities nearest to the fires are about 4 miles from one another, separated by a barren stretch of reclaimed land and man-made ponds filled with waste materials from the mines. Representatives for both operations expressed confidence their production facilities faced little direct threat from the fires. Key equipment--such as upgraders, which partially refine crude oil--is located hundreds of yards from any flammable vegetation and is protected by sprinkler systems and firefighting equipment such as bulldozers, firetrucks and water pumps, they said. While not damaged, these and other oil-sands sites have been affected by staffing issues stemming from the evacuation of Fort McMurray's residents and logistics issues preventing them from shipping heavy crude. Pipeline operator Enbridge Inc. has reduced its oil-sands crude shipments by about 900,000 barrels a day, down from a capacity of 1.5 million barrels a day. The fire's expansion led to the evacuations of nearly 20 worker camps and facilities late Monday. That included a 655-unit lodge operated by Horizon North Logistics Inc., which caught fire early Tuesday, the company and provincial officials said. Horizon North said it believes the camp has sustained significant damage, but is unable to access the site because of evacuation orders. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil sands; Mines; Forest & brush fires; Camps; Petroleum production; Sprinkler systems
Location: Calgary Alberta Canada
Company / organization: Name: Environment Canada; NAICS: 924110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 18, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789512411
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789512411?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Malaysia's Petronas Says Oil Prices to Continue Affect Earnings; National company posts 60% annual decline in profit
Author: Ngui, Yantoultra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2016: n/a.
Abstract:
KUALA LUMPUR--Malaysia's national oil company, Petroliam Nasional Bhd, said Wednesday that oil prices and foreign exchange rate volatility would continue to affect its performance after it posted a 60% annual fall in net profit for the first quarter ended March.
Full text: KUALA LUMPUR--Malaysia's national oil company, Petroliam Nasional Bhd, said Wednesday that oil prices and foreign exchange rate volatility would continue to affect its performance after it posted a 60% annual fall in net profit for the first quarter ended March. Petronas, Malaysia's only Fortune 500 company, has been hit by the slump in oil prices. The company said in January that it would cut its spending by some $11.4 billion over the next four years. The unlisted firm, which accounts for most of the Malaysian government's oil and gas revenue, subsequently announced in March that it was also cutting 1,000 jobs as it navigates the weaker oil-prices environment. "Concerns on moderate demand outlook and persistent oversupply will continue to pressure crude-oil prices," Petronas said in a news statement. "Petronas will continue with its cost-rationalization efforts to remain competitive while pursuing efforts to drive operational efficiencies and effective delivery of growth projects that bring value." Although crude-oil prices have been on the rise since January this year and even closed at $50 a barrel on Tuesday, more than 80% higher from January lows, prices are still more than 50% lower than 2014, mainly dragged by oversupply and slowing demand. Petronas' profit after tax for the January-March period dropped 60% to 4.6 billion ringgit ($1.14 billion), from 11.4 billion ringgit the same quarter a year ago. Revenue for the quarter declined 26% to 49.1 billion ringgit, compared with 66.2 billion ringgit recorded a year ago, according to the statement. Petronas attributed its weaker profitability to lower prices across all products and higher net impairment on assets. The weaker performance was however partially offset by favorable U.S dollar exchange rates against the ringgit. Credit: By Yantoultra Ngui
Subject: Volatility; Corporate profits
Location: Malaysia
Company / organization: Name: Petronas; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 18, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789512425
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789512425?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Why Some Frackers Look Good After the Oil Bust; Oil and gas frackers destroyed a lot of wealth but aren't hopeless cases going forward
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 May 2016: n/a.
Abstract:
Yet the 20%-plus drop in oil and natural gas prices since then is part of the reason.
Full text: "Fracker" is still a dirty word in financial markets. It shouldn't be. As bankruptcies pile up among companies that rode the boom and recent bust of hydraulic fracturing to unlock oil and natural gas, a barely printable epithet uttered about the industry bears revisiting. A year ago, hedge-fund manager David Einhorn recommended dumping shares of five fracking stalwarts because they were burning through much or all the cash they generated. The group has fallen on average. Yet the 20%-plus drop in oil and natural gas prices since then is part of the reason. More to the point, the company Mr. Einhorn derided as the "motherfracker," Pioneer Natural Resources, has beaten the S&P 500 in the past year. The worst performer by far has been Whiting Petroleum, off by a whopping two-thirds. Investors looking over the wreckage of this sector should pay heed to that performance difference. It reflects that Pioneer's stronger balance sheet has afforded it far more opportunity to develop its most attractive prospects than Whiting. The companies reported production changes of 3% and minus-12% in the first quarter from a year earlier, respectively. In the longer term, and more to the point, Pioneer's investments in future production likely aren't a waste of money. Retrospectively, Mr. Einhorn is correct that frackers misallocated hundreds of billions of dollars. With high upfront costs and rapid production decline rates, these producers consume lots of cash and might still appear to be on a treadmill built out of shareholders' shredded money. Economics argue otherwise. The same accusation, after all, could be made about low-quality farmland rather than shale oil wells. Much still produces crops as long as the land is cheap enough and commodity prices sufficiently attractive. Other land lies permanently fallow. For example, in the 19th century less-productive farms in New England became uneconomical when more-efficient transport unlocked vast harvests from the Midwest. By contrast, oil prices weren't crushed in the past two years because of a vastly cheaper source of supply. At the margin, rising production collided with unexpectedly weak petroleum demand. But, unless millions of relatively expensive barrels from shale are all surplus to the world's needs, some combination of costs and prices must make most of them economical. A year ago Pioneer had an all-in production break-even cost higher than about 70% of all hydrocarbon producers world-wide, and also above the prevailing oil price. The latter is obviously unsustainable. But the market has a way of fixing things. In the first quarter of 2015, for example, Pioneer's production cost per barrel of oil equivalent was $12.56. A year later, it was far lower at $9.17. The company added to reserves at a cost of $10.18 a barrel--far more cheaply than before. That isn't necessarily an argument for Pioneer's shares in the short term, but it shows that market forces adjust quickly when red ink flows. Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Subject: Energy economics; Hydraulic fracturing; Natural gas prices
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 18, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789519964
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789519964?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
American Energy Partners to Shut Down; Oklahoma shale company founded by late Aubrey McClendon laid off workers and will exit oil business
Author: Olson, Bradley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 May 2016: n/a.
Abstract:
To finance his comeback attempt, Mr. McClendon had pledged cash proceeds from his stake in the Oklahoma City Thunder basketball team, a 2,000-bottle wine collection and a broad set of investments from antique boats to vacation homes.
Full text: American Energy Partners LP, the Oklahoma City oil and gas company founded by the late shale pioneer Aubrey McClendon, plans to shut itself down this summer. About half of the 100 employees that remained there after Mr. McClendon's death in a car crash in March were laid off Wednesday, and the company plans to wind down operations completely over the next three months, according to a person familiar with the matter. The plan to shutter the business, which has shrunk in recent months as its oil-and-gas exploration units were spun off into several subsidiaries, is the first step in what many anticipate will be an extended process of untangling the complex estate of the former billionaire who co-founded Chesapeake Energy Corp. in 1989. "Aubrey's legacy will be carried forward by each of these businesses as they continue to grow, by the numerous landmarks all over our city in which he had a hand in developing and by the many philanthropic organizations to which Aubrey gave generously," the company said in a statement. The decision to shut down American Energy Partners was made in consultation with Mr. McClendon's family, the company said. In a widely followed second act after his 2013 ouster from Chesapeake, Mr. McClendon, his management team and a group of private equity backers raised more than $15 billion and hired 800 employees to create 10 new energy exploration outfits. Most of those workers have joined subsidiary companies created by private equity backers including John Raymond of the Energy and Minerals Group that were then spun off into stand-alone entities. Those companies include Ascent Resources LLC, White Star Energy LLC, Permian Resources LLC, Traverse Midstream LLC and Heritage Resources Management. None of them will be affected by the decision to close American Energy, the company said. American Energy in January struck a deal with Argentina's state-run oil company, YPF SA, to help develop a large shale field in that country. At the time, YPF said Mr. McClendon's company would make a $500 million commitment to energy exploration in Argentina. Mr. McClendon had also obtained a vast lease in Australia. Mr. McClendon died in a fiery wreck March 2, one day after being indicted on one count of conspiring to rig the price of oil and gas leases. His vehicle was traveling at a speed of 88 miles an hour before it crashed into a concrete embankment. The day before he had vowed to fight the charge. He left behind a tangled financial legacy stemming from an array of personal and philanthropic investments that were tied to loans valued at more than $400 million. To finance his comeback attempt, Mr. McClendon had pledged cash proceeds from his stake in the Oklahoma City Thunder basketball team, a 2,000-bottle wine collection and a broad set of investments from antique boats to vacation homes. Mr. McClendon's estate has been entered into probate and a court in Oklahoma has begun to take petitions and hold hearings in the matter. His will was filed last month with the court. Write to Bradley Olson at Bradley.Olson@wsj.com Credit: By Bradley Olson
Subject: Corporate profiles
Location: Oklahoma
Company / organization: Name: YPF SA; NAICS: 211111; Name: Star Energy; NAICS: 211111; Name: Ascent Resources LLC; NAICS: 211112; Name: Chesapeake Energy Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789632095
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789632095?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Rally Loses Steam on Stronger Dollar; July Brent crude fell $0.78 to $48.15 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 May 2016: n/a.
Abstract:
[...]some analysts said with oil prices still below production cost, the current price level is still not economical enough to spark a rebalance in the market.
Full text: Crude oil prices headed lower in early Asian trade Thursday as a stronger dollar and the unexpected increase in U.S. crude inventories triggered selling. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $47.51 a barrel at 0219 GMT, down $0.68 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.78 to $48.15 a barrel. Oil prices had surged in recent sessions as outages in Africa and Canada, economic woes among Latin American producers, and production declines in the U.S. propelled expectations of a smaller glut. Even as late as Wednesday afternoon, Brent, the global benchmark, was lumbering steadily towards $50 a barrel, a level unseen since November. But oil futures reversed direction after minutes of the Federal Reserve's April meeting indicated that the central bank could raise U.S. interest rates as early as next month, causing the dollar to jump. The Wall Street Journal Dollar Index, which tracks the dollar against 16 other currencies, was last down 0.01%. A stronger U.S. currency makes dollar-traded oil more expensive for foreign buyers. Another factor suppressing prices could be profit-taking after prices rose to six-month high earlier in the week. "The market may be sufficiently overbought to peak at any time here, but we may see at least a few sessions of consolidation at a high level to help define a top rather than a more abrupt A-shaped market turn," said Tim Evans, an energy analyst at Citi Futures. In recent weeks, the ongoing wildfires in Canada and supply disruptions in Nigeria and Libya have taken at least 1 million barrels of oil offline each day. Fiscal distress in Venezuela is also posing challenges for its oil operations. "The fact that oil hasn't pushed through $50 a barrel suggests the market is discounting the impact of the disruptions. As these issues linger, we expect an increasing supply risk premium will price into the market," said Daniel Hynes, senior commodity strategist with ANZ. Moreover, some analysts said with oil prices still below production cost, the current price level is still not economical enough to spark a rebalance in the market. A Bernstein research report estimates global marginal cost for non-Organization of the Petroleum Exporting Countries fell by 30% to $73 a barrel in 2015, less than the fall in Brent of 47% to $52 a barrel. "With oil prices falling more rapidly than costs, industry margins have been wiped out and the industry is free cash flow negative. This is not sustainable," said Neil Beveridge, senior analyst at Bernstein, adding that global oil market is unlikely to see a rebalance until prices edge up to at least $60-$70 a barrel. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 189 points to $1.6300 a gallon, while June diesel traded at $1.4646, 185 points lower. ICE gasoil for June changed hands at $434.25 a metric ton, down $9.50 from Wednesday's settlement. Nicole Friedman contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Crude oil
Location: United States--US Canada Africa
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789645648
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789645648?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Finance: Norway Awards Oil Rights
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 May 2016: C.3.
Abstract:
Announcing the country's 23rd licensing round in five decades, the government awarded stakes in 10 drilling licenses to 13 companies, including ConocoPhillips, Chevron Corp. and Statoil ASA.
Full text: OSLO -- Norway's government awarded its first new oil-and-gas acreage in more than two decades on Wednesday, allowing drilling in an area previously disputed with Russia and continuing a push into the Arctic despite cost challenges and weak profitability in the sector. "Today, we are opening a new chapter in the history of the Norwegian petroleum industry," said Tord Lien, Norway's minister of petroleum and energy. "For the first time in 20 years, we offer new acreage for exploration." Announcing the country's 23rd licensing round in five decades, the government awarded stakes in 10 drilling licenses to 13 companies, including ConocoPhillips, Chevron Corp. and Statoil ASA. Attractive acreage is key to ensure long-term drilling activity, the government said. "This is a cornerstone of the government's petroleum policy and is particularly important in the current challenging times for the industry," the government said. Three of the 10 new licenses were awarded in a previously disputed area with Russia in the southeast Barents Sea, in the wake of a 2010 delineation deal between the two countries, following four decades of disagreement. One of the licenses in the southeast Barents Sea borders Russia and will be operated by Det Norske Oljeselskap ASA with a 40% stake. Russia's Lukoil was offered a 20% stake in the license, and Statoil and Petoro were offered similar stakes, the government said. Statoil is Norway's dominant oil company and is 67%-owned by the government. It was awarded the operatorship on four of the new licenses, meaning it will take the lead on those projects. Lundin Petroleum AB was awarded three operatorships, while Capricorn Norge AS, Centrica PLC and Det Norske Oljeselskap were offered one each. "Gradually opening up new areas is crucial for us to maintain profitable and high-level production up to and beyond 2030," said Arne Sigve Nylund, Statoil's head of development and production in Norway. Sweden's Lundin Petroleum said it had been awarded stakes in five Barents Sea licenses. Credit: By Kjetil Malkenes Hovland
Subject: Licenses; Drilling
Location: Arctic region Barents Sea Norway
Company / organization: Name: Centrica PLC; NAICS: 221122, 221210; Name: Lundin Petroleum AB; NAICS: 211111, 213112; Name: Chevron Corp; NAICS: 324110, 211111; Name: ConocoPhillips Co; NAICS: 211111; Name: Statoil ASA; NAICS: 324110, 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: May 19, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789696744
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789696744?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
FMC-Technip Merger to Create $13 Billion Oil-Services Firm; Combined, the companies had $20 billion in annual revenue in 2015
Author: Williams, Selina; Landauro, Inti
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 May 2016: n/a.
Abstract:
The combined company had $20 billion in revenue last year, greater than Baker Hughes Inc. It would be a potential rival to the world's largest oil-services companies, Halliburton Co. and Schlumberger Ltd. The tie-up brings together the engineering and construction expertise of Paris-based Technip with the underwater equipment and systems of Houston-based FMC. Oil-services companies, in providing equipment, project management, engineering and construction for petroleum projects, are often the first to get squeezed when prices fall as clients such as Exxon Mobil Corp. and BP PLC cut back.
Full text: PARIS--FMC Technologies Inc. and French oil-services rival Technip SA agreed to merge, forming a significant new player in an energy industry racked by a nearly two-year slump in crude prices. The all-share deal would result in a new company named TechnipFMC with a market value of about $13 billion. The combined company had $20 billion in revenue last year, greater than Baker Hughes Inc. It would be a potential rival to the world's largest oil-services companies, Halliburton Co. and Schlumberger Ltd. The tie-up brings together the engineering and construction expertise of Paris-based Technip with the underwater equipment and systems of Houston-based FMC. The merger is expected to be completed early next year, with the new company being based in London with operational headquarters in Houston and Paris. Technip said the transaction was based on strategic and operational benefits. FMC wasn't immediately available to comment. The deal comes after a wave of cross-Atlantic combinations involving U.S. companies acquiring European companies and moving the tax domicile outside the U.S. in order to benefit from lower levies. Such tax-driven "inversions" have sparked complaints and the U.S. Treasury has been trying to close the loophole. Technip's shares rose 6.3% to close at [euro]49.30 ($55.30) in Paris on Thursday after the deal was announced. FMC was off about 4% at $27.48 in late trading in New York. The merger comes as the oil-services sector is being reshaped by crude prices that have fallen more than 60% in the past two years. Oil-services companies, in providing equipment, project management, engineering and construction for petroleum projects, are often the first to get squeezed when prices fall as clients such as Exxon Mobil Corp. and BP PLC cut back. As of March, the oil industry has deferred or canceled $270 billion in projects since crude prices began crashing nearly two years ago. Halliburton, Baker Hughes and Schlumberger have cut tens of thousands of jobs. FMC and Technip also have been hit hard. FMC has faced stagnating demand for its subsea equipment, as exploration and production companies have pulled back on expensive deepwater projects. The company's inbound orders fell to $672 million from $969 million during the fourth quarter, and its backlog of projects shrank to under $4 billion from $5.5 billion a year ago. Technip last summer said it would cut 6,000 jobs in a restructuring designed to save more than $900 million in two years. The company said it would sell assets and close some of its businesses in Europe, Asia and Brazil. "Today we live in very challenging oil and gas market," John Gremp, FMC's chief executive, said on a conference call. "We know that even when oil prices improve offshore production won't be fully developed unless the industry improves project economics," he said. Technip and FMC said the deal would combine two companies with complementary skills, allowing them to cut costs by $400 million a year starting in 2019. The companies said they had combined earnings before interest, taxes, depreciation and amortization of $2.4 billion, with an order backlog of $20 billion. "We will have a broader company that includes project management and offshore expertise," Technip Chairman and CEO Thierry Pilenko said on a conference call. Mr. Pilenko said he didn't expect any regulatory obstacles in getting clearance for the tie-up. A $28 billion bid by Halliburton for Baker Hughes was abandoned by the two companies earlier this month as U.S. competition regulators raised concerns over competition. Analysts said the combination disclosed on Thursday was unlikely to run into regulatory hurdles because it involved one company, Technip, merging with a key supplier. Halliburton and Baker Hughes are two similar companies that would have gained a bigger share across a number of markets, analysts said. Related * Oil Price Drop Vanquishes Cutting-Edge Projects (May 4) * Oil Slump Forces Deep Cuts by Service Providers (Nov 6. 2015) * Siemens Chief Faces Tough Questions over Dresser Price (Jan. 25, 2015) * Technip Drops Plan to Buy CGG After Talks on Merger Fail (Dec. 14, 2014) The merger would make the new company the "undisputed leader" in subsea project development, said Canaccord Genuity analyst Alex Brooks. The merger builds on the Forsys Subsea joint venture formed between the two companies a year ago that has shown it can shave as much as 30% from offshore project costs by simplifying project design from an early stage, reducing equipment, supplies and installation costs. Mr. Pilenko is to become the merged company's executive chairman. FMC President and Chief Operating Officer Doug Pferdehirt is to become its CEO. Each Technip share will be converted into two shares of the new company, with each FMC Technologies share converted into one share of the new company. Each company's shareholders will own close to 50% of the combined company. Jordan Patel at Sanford C. Bernstein & Co. said the merger was a step toward solving the industry's endemic problem of high costs. "For every oil-service company globally, tackling existential strategic questions needs to become the defining feature of 2016. Technip and FMC today are among the first to do so," he said in a note to clients. Alison Sider in Houston contributed to this article. Write to Selina Williams at selina.williams@wsj.com and Inti Landauro at inti.landauro@wsj.com Credit: By Selina Williams and Inti Landauro
Subject: Acquisitions & mergers; Oil service industry; Prices; Project management; Energy industry
Location: United States--US
Company / organization: Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112; Name: FMC Technologies Inc; NAICS: 333922, 333249; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Technip SA; NAICS: 541330; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 19, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789703562
Document URL: https://login.ezproxy.uta.edu/ login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789703562?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Hit by Stronger Dollar, Increase in U.S. Crude Stocks; Supply disruptions continue to support the market
Author: Kantchev, Georgi; Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 May 2016: n/a.
Abstract:
Oil prices began their descent late on Wednesday after minutes of the Federal Reserve's April meeting indicated that the central bank could raise U.S. interest rates as early as June.
Full text: Oil prices inched lower Thursday on a stronger dollar and an unexpected increase in U.S. crude inventories. The fall comes after a rally in recent sessions fueled by production outages in Africa and Canada. Production declines across the globe have propelled expectations of shrinking the global oversupply, but many countries are still pumping at a near-record pace and keeping stockpiles near record highs. Those divided opinions played out again in Thursday's trade, analysts said. After drifting lower in the morning, crude oil pared nearly all of the losses in the afternoon. Many are going to keep trading as though the market is undersupplied as long as big outages in Canada and Africa remain, analysts said. Light, sweet crude for June delivery settled down 3 cents, or 0.1%, at $48.16 a barrel on the New York Mercantile Exchange. The more actively traded July contract settled down 11 cents, or 0.2%, at $48.67 a barrel. Brent, the global benchmark, fell 12 cents, or 0.2%, to $48.81 a barrel on ICE Futures Europe. Oil prices began their descent late on Wednesday after minutes of the Federal Reserve's April meeting indicated that the central bank could raise U.S. interest rates as early as June. Higher rates tend to push up the value of the dollar, because it becomes more attractive to yield-seeking investors. A stronger U.S. currency makes dollar-traded oil more expensive for foreign buyers, and so its price tends to fall as the dollar rises. The Wall Street Journal Dollar Index, which tracks the buck against 16 other currencies, spent Thursday retreated from lofty morning gains, and up just 0.03% by the time the oil markets settled. The U.S. government on Wednesday also reported an unexpected increase in crude inventories, 1.3 million barrels to 541.3 million barrels last week. Oil inventories in the U.S. have been hovering near all-time highs, underscoring the continuing global glut of crude. That factor, and the dollar's strength, were still forcing oil prices lower Thursday, said Tariq Zahir, who oversees $6 million as managing member of Tyche Capital Advisors LLC. "It's just a continuation of the oversupplied market that we're in," he said. "I don't really think we're coming to a balanced market yet." In recent weeks, ongoing wildfires in Canada and supply disruptions in Nigeria and Libya have fueled the rally in oil. They have taken at least 1 million barrels of oil offline each day, said Hamza Khan, head of commodity strategy at ING Bank. "As long as we have those conditions in place, we can hold current price levels or move higher," said Tim Evans, analyst at Citi Futures Perspective in New York. However, analysts say these outages are largely temporary and most of these barrels will come back online soon. Iran, meanwhile, is continuing to ramp up exports after international sanctions against it were lifted in January. "The fact that oil hasn't pushed through $50 a barrel suggests the market is discounting the impact of the disruptions," said Daniel Hynes, senior commodity strategist with ANZ. Gasoline futures fell 1.5 cents, or 0.9%, to $1.6339 a gallon. Diesel futures fell 0.43 cent, or 0.3%, to $1.4788 a gallon. Jenny W. Hsu contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com and Timothy Puko at tim.puko@wsj.com Credit: By Georgi Kantchev and Timothy Puko
Subject: Interest rates; Inventory; Futures; Crude oil prices; American dollar
Location: United States--US Canada Africa
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 19, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789715417
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789715417?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi Economy's Growth Will Slow This Year, IMF Says; International Monetary Fund report praises kingdom's efforts to lower dependence on crude oil sales
Author: Ahmed Al Omran
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 May 2016: n/a.
Abstract:
The Saudi government has taken several measures to cut spending and increase non-oil revenues as it copes with the steep drop in oil prices over the last two years, which resulted in a record budget deficit of about $98 billion in 2015.
Full text: RIYADH, Saudi Arabia--Saudi economic growth is expected to slow this year as cheap oil continues to weigh on the Arab world's biggest economy, the International Monetary Fund said Thursday while welcoming the kingdom's efforts to promote changes and reduce its dependence on crude sales. Deputy Crown Prince Mohammed bin Salman last month announced a major plan to sharply lower Saudi Arabia's reliance on oil revenues, taking a series of steps that have long been urged by the IMF, including subsidy cuts, introduction of taxes, privatizing public assets and improving government efficiency. "To ensure their success, the reforms will need to be properly prioritized and sequenced, and the appropriate pace of implementation carefully assessed," said Tim Callen, who led an IMF team to the kingdom earlier this month for annual consultations with Saudi officials. The Saudi government has taken several measures to cut spending and increase non-oil revenues as it copes with the steep drop in oil prices over the last two years, which resulted in a record budget deficit of about $98 billion in 2015. The IMF expects Saudi Arabia's current account and fiscal deficits to be around 9% and 14% of GDP, respectively, in 2016. GDP growth is also expected to slow down to 1.2% this year from 3.5% in 2015, the IMF projected. However, the IMF praised the government's approach to finance its deficit through a combination of using some of its foreign reserves and issuing debt at both the local and international level. "The government policy of using a combination of deposit drawdowns and international and domestic debt issuance to finance the fiscal deficit is appropriate," Mr. Callen said. The IMF also said that Saudi Arabia's exchange rate peg to the U.S. dollar continues to serve the kingdom well given the structure of the economy. The nearly 30-year peg had come under intense pressure in recent months as Saudi foreign reserves fell sharply, limiting the central bank's ability to defend the exchange rate. Abandoning the peg would help the kingdom stretch its dollars, some analysts say. Write to Ahmed Al Omran at Ahmed.AlOmran@wsj.com Credit: By Ahmed Al Omran
Subject: Economic development; Budget deficits; Foreign exchange rates; Economic growth; Gross Domestic Product--GDP
Location: Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 19, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789808146
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789808146?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
'Preventable Errors' Led to 2015 California Oil Spill, Regulators Say; DOT's Pipeline and Hazardous Materials Safety Administration to next focus on possible enforcement actions against Plains All American Pipeline
Author: Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 May 2016: n/a.
Abstract:
The report also said that Houston-based Plains didn't have adequate procedures and systems in place to keep such a spill from escalating into an emergency. "Since the release, we have worked tirelessly and relentlessly to do the right thing and do it as quickly and effectively as possible by cleaning up the beaches and other affected areas, compensating those who were impacted by the release and working with the various governmental and other organizations responding to the incident," the company said in a written statement Thursday.
Full text: Plains All American Pipeline LP failed to prevent a massive oil spill in California last year and its delayed response compounded the severity of the accident, federal regulators said Thursday. The corroded oil pipeline, which moved crude along scenic Highway 1, broke open a year ago and spilled nearly 3,000 barrels of oil onto a beach and into the Pacific Ocean near Santa Barbara. Anthony Foxx, U.S. Transportation Secretary, said the investigation revealed that "a number of preventable errors led to this incident, and that the company's failures in judgment, including inadequate assessment of the safety of this line and faulty planning made matters worse." Plains said it is reviewing the report from the Pipeline and Hazardous Materials Safety Administration, which is a part of the Transportation Department, and wouldn't comment on it because of pending litigation. Earlier this week the California Attorney General announced that a grand jury indicted the company on 46 counts related to the oil spill, four of them felonies. A Plains employee was also charged. Plains said the charges are meritless and the company will fight them. The report, released exactly one year after the Plains oil spill, underscores the limitations of pipeline inspection tools and monitoring systems that energy companies say prevent leaks. Earlier * Plains All American Pipeline Faces Charges in 2015 Oil Spill (May 17) * The Trouble With Inspection Tools for Oil Pipelines (July 2015) * California Pipeline Ruptures, Leaks Oil Into Pacific Ocean (May 2015) In the report, federal regulators said Plains didn't work hard enough to spot problems on its pipeline in advance of the spill. The report also said that Houston-based Plains didn't have adequate procedures and systems in place to keep such a spill from escalating into an emergency. "Since the release, we have worked tirelessly and relentlessly to do the right thing and do it as quickly and effectively as possible by cleaning up the beaches and other affected areas, compensating those who were impacted by the release and working with the various governmental and other organizations responding to the incident," the company said in a written statement Thursday. Now that PHMSA has concluded its investigation, the agency will focus on possible enforcement actions, and could impose civil penalties or refer the case for federal criminal prosecution. "What happened is completely unacceptable and we will hold the company accountable for its actions," said Marie Therese Dominguez, PHMSA Administrator. Federal regulators previously said the immediate cause of the spill was corrosion that thinned the walls of the pipeline. Plains had inspected the line, but when the broken pipe was excavated investigators found significantly worse corrosion than the testing predicted. Today's report said Plains didn't properly analyze inspection results and would have had a better chance of early detection with a different inspection tool. The report also said the company's leak detection system wasn't sensitive enough to alert control-room staff quickly when the pipeline broke, and operators didn't recognize that the pipe was leaking. An operator in the control room, who was dealing with another problem on the pipeline, inhibited an alarm that would have given earlier notice of the catastrophic failure. Write to Alison Sider at alison.sider@wsj.com Credit: By Alison Sider
Subject: Oil spills; Pipelines; Criminal investigations; Indictments
Location: United States--US California Santa Barbara California Pacific Ocean
People: Foxx, Anthony
Company / organization: Name: Plains All American Pipeline LP; NAICS: 486110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 19, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789884640
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789884640?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Search in US$2.2 Billion Deal to Buy InterOil; A successful merger of the two Papua New Guinea-focused companies could allow for project collaboration, cost-cutting
Author: Stewart, Robb M
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 May 2016: n/a.
Abstract:
The takeover of InterOil could also potentially open the Total-led Papua LNG project to collaborations with Oil Search's other major asset, its 29% stake in a liquefied natural gas project that can produce 6.9 million metric tons a year.
Full text: MELBOURNE, Australia--Oil Search Ltd. has moved to consolidate natural-gas developments on Papua New Guinea with a US$2.2 billion deal to buy U.S.-listed midsize energy company InterOil Corp amid a growing natural gas glut. Oil Search, based in Port Moresby, the capital of Papua New Guinea, but listed in Australia, said Friday the boards of both companies had agreed to an offer worth at least US$40.25 for each InterOil share--a 27% premium to the closing price on May 19. The deal will boost Oil Search's exposure to what is expected to be the next major gas-export project to be built in Papua New Guinea, and potentially see this developed alongside an existing liquefied natural gas venture in which Oil Search has a stake. Related * Heard on the Street: Why InterOil's Natural Gas Still Burns Brightly With a separate agreement that will see Oil Search sell on some of InterOil's interests in the promising natural-gas discovery in Papua New Guinea to partner Total SA for about US$1.2 billion, the acquisition will also strengthen the French energy giant's stakes in the proposed Total-led project centered on the Elk and Antelope gas fields. The side deal would increase Oil Search's stake in the project from nearly 23% to 29% and lift Total's position to just over 48% from 40% now. The takeover of InterOil could also potentially open the Total-led Papua LNG project to collaborations with Oil Search's other major asset, its 29% stake in a liquefied natural gas project that can produce 6.9 million metric tons a year. Exxon has a 33% interest in the venture , alongside smaller partners including Papua New Guinea's government and Australia's Santos Ltd. The takeover comes as New York-listed InterOil is fighting to reject a move by founder and former Chief Executive Phil Mulacek to seat himself and four others on the company's board. Mr. Mulacek has called on shareholders to support the nominations, and in a letter to investors this week he said the board lacked expertise, which had led to cost overruns and increasing debt. Mr. Mulacek was on a flight and currently unreachable, a spokesman for his company Petroleum Independent & Exploration, LLC said. Oil Search Managing Director Peter Botten told The Wall Street Journal he had emailed Mr. Mulacek early in the day, seeking to engage with him and to explain the merits of the deal. Liquefied natural gas producers are struggling against a tide of new supply from countries including Australia, Papua New Guinea and now the U.S. that has swamped demand for the fuel. Almost US$200 billion has been committed in recent years in Australia alone to plants that chill gas to a liquid, which can then be shipped and stored, in anticipation of Asia's growing need for cleaner-burning fuels as economies there expand. Wood Mackenzie, a consultancy, has forecast the global LNG glut will continue to grow, with 70 million metric tons of liquefied gas uncontracted by 2021. Oil Search and InterOil in a joint statement said the tie-up offers compelling financial and strategic benefits for both sides by creating a major independent oil-and-gas champion in the Pacific island nation. Oil Search executives have said there is an opportunity to reduce costs and accelerate the development of the newer gas finds by linking its two major Papua New Guinea projects. Papua New Guinea benefits from its proximity to large gas markets in China, Japan and South Korea. The gas resources there also have some of the lowest development costs in the world, giving projects an edge at a time when energy companies around the world are focused on protecting balance sheets. Under the takeover agreement, InterOil shareholders would receive 8.05 Oil Search shares for each of their own shares or a cash alternative up to a total of US$770 million. They also would receive the right to an additional cash payment of about US$6.05 a share for each trillion cubic feet equivalent of gas, above the threshold of 6.2 trillion cubic feet, that is certified for the Elk and Antelope fields. That, for example, could see the value of the offer rise to US$51.13 a share if the resource has 8 trillion cubic feet of gas. The takeover is expected to see InterOil shareholders gain an interest of 14%-21% in the enlarged company. If the agreement is successful, one director of InterOil would be invited to join Oil Search's board. Oil Search was itself the target of a takeover bid last year, rejecting an all-stock offer then worth 11.6 billion Australian dollars (US$8.4 billion) from larger Woodside Petroleum Ltd. to build a regional oil-and-gas champion. Write to Robb M. Stewart at robb.stewart@wsj.com Credit: By Robb M. Stewart
Subject: Natural gas; Acquisitions & mergers; Tender offers
Location: United States--US Australia Papua New Guinea
Company / organization: Name: Total SA; NAICS: 447190, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 20, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789912436
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789912436?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copy right owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Rise in Asia as Supply Disruptions Remain in Focus; July Brent crude rose 41 cents to $49.22 a barrel
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 May 2016: n/a.
Abstract:
In refined product markets, Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--rose 61 points to $1.64 a gallon, while June diesel traded at $1.4832, 44 points higher.
Full text: Oil futures rallied Friday in early Asia trading Friday, as the dollar steadied and traders continued to focus on the prospect of supply disruptions. On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $48.75 a barrel, up 59 cents in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose 41 cents to $49.22 a barrel. The gains follow a quiet session for the oil markets in New York on Thursday, ending little changed in the wake of another unexpected increase in U.S. crude stockpiles. Production outages elsewhere around the world have fueled gains in oil prices in recent weeks. Wildfires in Canada have taken some oil fields there out of commission, while disruptions in Nigeria and Libya have also given prices a lift. "The market is clearly still hawkish on things," said Stuart Ive, private client manager at OM Financial in New Zealand. He said demand is likely to pick up in the U.S. as drivers hit the road this summer. "Don't forget we're moving into the U.S. driving season." Oil prices retreated earlier in the week as the U.S. dollar rallied following indications that the U.S. Federal Reserve could launch another round of rate increases at its next meeting in June. That strengthened the dollar, which tends to push oil prices lower by making the dollar-denominated commodity more expensive for holders of other currencies. Crude prices are still sharply higher on the year, with Brent crude gaining more than 30% year to date following a sharp drop to under $30 a barrel late January. On Friday, the dollar was little changed. The WSJ Dollar Index was down less than 0.1% recently. In refined product markets, Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--rose 61 points to $1.64 a gallon, while June diesel traded at $1.4832, 44 points higher. ICE gasoil for June changed hands at $439 a metric ton, up $9.50 from Thursday's settlement. Credit: By Dan Strumpf
Subject: Crude oil; Price increases; Crude oil prices
Location: Libya United States--US Canada Asia Nigeria New Zealand New York
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789915482
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789915482?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Lift Asian Shares, But Fed Keeps Gains in Check; Prospect of Federal Reserve raising interest rates weighs on some markets
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 May 2016: n/a.
Abstract:
Investors in the region are grappling with uncertainties, ranging from the increased likelihood the U.S. Fed will raise interest rates in June , to volatility in the oil market and uncertainty around how Japan's authorities will address yen strengthening.
Full text: A bounce in oil prices lifted most Asian stock benchmarks Friday, but the prospect of higher U.S. interest rates dragged down smaller markets. Stocks in Hong Kong rose 0.8%, led up by property and energy shares. China Shenhua Energy Co. Ltd. was up 2.8%. China Resources Land Ltd. and China Overseas Land & Investment Ltd. gained 4.9% and 3.4% respectively. Data earlier this week showed China's home prices continuing to rise in April, buoying the property sector. Energy stocks gained alongside a continued recovery in crude oil prices. Brent crude-oil prices rose about 0.7% in Asian trade Friday. Brent crude oil, at $49.13 a barrel, is close to the carefully watched $50 level. Elsewhere, the Shanghai Composite Index was up 0.7%, the Nikkei Stock Average closed up 0.5%, as did the S&P ASX 200. But the Philippine benchmark slumped 1.7%, shares in Vietnam were off 0.5% and Indonesia's JSX was up just 0.1%. Investors in the region are grappling with uncertainties, ranging from the increased likelihood the U.S. Fed will raise interest rates in June , to volatility in the oil market and uncertainty around how Japan's authorities will address yen strengthening. That has weighed on Asian stocks, which have slipped since late April. The MSCI Asia Pacific stock benchmark is trading around levels seen in mid-2014. "Investors are worried that if there is a rate hike in June, the [U.S.] economy may not be able to support it," said Bernard Aw, market strategist with brokerage IG. For the week, the Nikkei gained nearly 2%. Australian stocks, up 0.4%, have strung together six straight weekly rises. Indonesia and the Philippines have suffered the most in Asia, down 1.9% and 1.1% respectively for the week as the dollar has risen and investors adjust their expectations for the Fed. Investors are looking to the meeting of Group of Seven finance ministers and central bankers this week in Sendai, Japan, where rhetoric on the yen could rise. Washington and Tokyo may be heading toward a standoff over exchange rates . Bank of Japan Gov. Haruhiko Kuroda said Thursday he would act quickly if the yen's rise threatened his inflation goal. Overnight comments from U.S. Fed officials William Dudley and Jeffrey Lacker strengthened expectations that the central bank would increase rates this summer. That possibility had already gained more traction after recent data showed an improvement in the U.S. economy, and after the Fed released minutes Wednesday that flagged a June rate rise. Already, concerns about a rate increase have sent Asian currencies to multi-month lows . Indonesia's rupiah fell to a fresh three-month low Friday, although the dollar was a touch weaker against a basket of global currencies compared with its level in the previous session. Expectations about higher returns in the U.S. have drawn money flows away from riskier assets. Investors pulled a net $626 million from Asian mutual funds in the week ending May 18, with $435 million of that from China funds, according a report Friday by Citi Research. In Australia, shares of Oil Search Ltd. bucked the trend, pulling back from an initial surge to end down 1.2%. The firm unveiled an agreement to buy New York-listed InterOil Corp. in a deal valued at US$2.2 billion . Ewen Chew, Dominique Fong contributed to this article. Write to Chao Deng at Chao.Deng@wsj.com Credit: By Chao Deng
Subject: Crude oil prices; Yen; Crude oil; Interest rates; Investments; Stocks
Location: China Japan Indonesia United States--US Hong Kong
Company / organization: Name: China Shenhua Energy Co; NAICS: 212111; Name: Bank of Japan; NAICS: 521110; Name: Group of Seven; NAICS: 926110; Name: China Overseas Land & Investment Ltd; NAICS: 237210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789930257
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789930257?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
World News: Brazil's Troubled Oil Giant Gets New Leader
Author: Jelmayer, Rogerio; Magalhaes, Luciana
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 May 2016: A.12.
Abstract:
Mr. Parente, who also served on the board of Petrobras from 1999 to 2003, succeeds Aldemir Bendine, who arrived at the company 15 months ago following a stint as CEO of state-controlled Banco do Brasil SA. Belligerent unions have hindered the company's effort to cut costs, while low global oil prices have depressed prices for assets Petrobras has put on the block and slowed Mr. Bendine's progress in a crucial divestment program.
Full text: SAO PAULO -- Brazil's acting president, Michel Temer, appointed a new head of the country's state oil company Petroleo Brasileiro SA as part of a broad shuffle of top government jobs. Pedro Parente, formerly the top executive at the Brazilian unit of U.S. agribusiness giant Bunge Ltd., will take over the helm of a company that is at the center of a massive corruption scandal that has shaken the foundations of the country's political class. Mr. Parente's most urgent tasks will be to restore confidence in the company and repair its finances after it was forced to write off billions of dollars in alleged bribe payments and overbilled projects. Mr. Parente, who also served on the board of Petrobras from 1999 to 2003, succeeds Aldemir Bendine, who arrived at the company 15 months ago following a stint as CEO of state-controlled Banco do Brasil SA. Belligerent unions have hindered the company's effort to cut costs, while low global oil prices have depressed prices for assets Petrobras has put on the block and slowed Mr. Bendine's progress in a crucial divestment program. Of $15 billion that Petrobras hopes to raise in 2015 and 2016 by selling assets, the company has so far managed to raise only about $2 billion. In addition to the corporate experience he gained during his stint at Bunge, which he left in 2014, Mr. Parente brings a range of government experience to the job. Under the center-right government of former Brazilian President Fernando Henrique Cardoso, Mr. Parente served as chief of staff and deputy finance minister. Mr. Bendine won some plaudits for his early work at Petrobras. When he arrived at the company last year, Petrobras' situation was so bad that its auditors were refusing to sign off on its financial statements due to the corruption investigation. Guilherme Figueiredo, a money manager at M. Safra & Co. in Sao Paulo, said Mr. Bendine "did a good job in an emergency, cleaning up the company's balance sheet." But he struggled to move the company forward due to his lack of experience in the oil sector, Mr. Figueiredo added. Mr. Bendine's predecessor, Maria das Gracas Silva Foster, was highly regarded in the oil industry for her vast technical knowledge, decades of experience at Petrobras and close relationship with President Dilma Rousseff, who stepped aside last week after the senate vote to proceed with an impeachment trial. Ms. Foster failed to improve the company's financial situation because she wasn't permitted to pass high international fuel prices on to consumers at a time when Brazil's government was battling inflation. "Whenever there's a change, there's an expectation of an improvement, but in this case you can't be sure unless you know Michel Temer's plans for Petrobras," said John Forman, a longtime Brazilian oil consultant and former director of Brazil's National Petroleum Agency. "Temer took office a few days ago and right now he has a lot more problems than solutions." --- Paul Kiernan contributed to this article. Credit: By Rogerio Jelmayer and Luciana Magalhaes
Subject: Appointments & personnel changes; Petroleum industry
Location: Brazil
People: Temer, Michel Parente, Pedro
Company / organization: Name: Petroleos Brasileiro SA; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.12
Publication year: 2016
Publication date: May 20, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789941855
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789941855?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Lower but Post Weekly Gain; Investors focus on supply disruptions in Canada, Libya, Nigeria
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 May 2016: n/a.
Abstract:
If oil prices rise to $50, "U.S. crude oil production could begin to stabilize rather than continue its decline, a decline which is necessary to help rebalance the global oil market," said Erika Coombs, senior energy analyst at BTU Analytics LLC, in a note.
Full text: Oil prices edged lower Friday but posted a second straight weekly gain, as traders continued to focus on supply disruptions. U.S. crude for June delivery settled down 41 cents, or 0.9%, at $47.75 a barrel on the New York Mercantile Exchange. Prices rose 3.3% this week and are up 6.9% in the past two weeks. The June contract expired at settlement Friday. The more actively traded July contract fell 26 cents, or 0.5%, to $48.41 a barrel. Brent, the global benchmark, fell 9 cents, or 0.2%, to $48.72 a barrel on ICE Futures Europe. Prices rose 1.9% this week and 7.4% in the past two weeks. Production outages around the world have fueled gains in oil prices in recent weeks, chipping away from the oversupply that has plagued the market for nearly two years. Wildfires in Canada have taken some oil fields there out of commission, while disruptions in Nigeria and Libya have also given prices a lift. "The unscheduled supply disruptions are continuing to evolve and are working to keep any periods of selling short-lived and relatively shallow," said Dominick Chirichella, analyst at the Energy Management Institute, in a note. "A growing contingency of market participants are of the view that the market is already in a rebalancing pattern and the current round of unscheduled production cuts are starting to accelerate the process," he said. Prices retreated slightly Friday as the dollar strengthened. A stronger greenback can push oil prices lower by making the dollar-denominated commodity more expensive for holders of other currencies. The Wall Street Journal Dollar Index, which tracks the greenback against a basket of other currencies, recently rose 0.1%. In addition, oil-field services firm Baker Hughes Inc. said Friday that the number of rigs drilling for oil in the U.S. was unchanged this week, and the number of oil rigs in the Permian Basin in West Texas rose. Drilling activity has dropped sharply in the U.S. since low oil prices have prompted companies to spend less on production. But some analysts warn that the recent rally in oil prices, up more than 80% since mid-February, could enable some producers to put more rigs to work and bring new wells online. If oil prices rise to $50, "U.S. crude oil production could begin to stabilize rather than continue its decline, a decline which is necessary to help rebalance the global oil market," said Erika Coombs, senior energy analyst at BTU Analytics LLC, in a note. Gasoline futures rose 0.17 cent, or 0.1%, to $1.6356 a gallon, up 3% on the week. Diesel futures rose 1.12 cents, or 0.8%, to $1.49 a gallon, posting a 6.2% weekly gain. Dan Strumpf contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com and Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman and Georgi Kantchev
Subject: Petroleum production; Price increases; Crude oil; Supply & demand
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1789953489
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1789953489?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Libyan Oil Exports to Flow Again from Disputed Terminal; National Oil Co. issues news release saying a cargo had sailed from Marsa al-Hariga
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 May 2016: n/a.
Abstract:
Libyan oil exports will flow again from a terminal that had been a subject of dispute between the groups vying for control of the country, raising new hope for the nation's petroleum production.
Full text: Libyan oil exports will flow again from a terminal that had been a subject of dispute between the groups vying for control of the country, raising new hope for the nation's petroleum production. Libya's state-run National Oil Co. issued a news release on Friday saying a 660,000 barrel cargo had sailed from the port of Marsa al-Hariga, which is controlled by groups in the country's east. The groups had closed the port 17 days ago in retaliation for successful efforts by the United Nations and an internationally backed unity government in Tripoli to block their attempts to export their own oil. Libya became divided in the chaos that emerged from the 2011 ouster and death of dictator Moammar Gadhafi. A U.N.-backed peace effort resulted in a new unity government being installed in Tripoli , but the east has yet to recognize it and instead has tried to develop its own stream of revenue by exporting oil via its own oil company. Under Libyan law, enforced by the U.N., Libyan oil must be shipped via the country's official National Oil Co. , which is based in the western capital of Tripoli. The blockade added to oil disruptions in Canada and Nigeria that have pushed oil prices close to $50 a barrel--a seven-month high. They also put further pressure on Libya's oil production, which has collapsed to less than a quarter of its capacity of 1.5 million barrels a day. The resumption of exports came after the traditional National Oil Co. in Tripoli and the new oil company in the east came to an agreement to lift the blockade. The two sides signed a memorandum of understanding asking the parliament for groups in the east and a Presidency Council set up to reconcile rival factions "to unify the oil sector," the news release said. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Privatization; Petroleum production
Location: Libya
People: Qaddafi, Muammar El
Company / organization: Name: United Nations--UN; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790057664
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790057664?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Intervention Energy Holdings Files for Bankruptcy Protection; Court papers show oil and gas company owes lender about $140 million
Author: Rizzo, Lillian; Fitzgerald, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 May 2016: n/a.
Abstract:
Privately held oil and gas company Intervention Energy Holdings LLC filed for bankruptcy protection Friday, as the collapse of the shale-drilling boom claimed another victim.
Full text: North Dakota-based shale company Intervention Energy Holdings LLC filed for bankruptcy protection Friday in the midst of a brewing battle with lender EIG Global Energy Partners. The company's chief executive and founder, John Zimmerman, said in court papers that although EIG was a "cooperative partner" for the majority of its time as Intervention Energy's lender, its "position clearly changed once they decided to build up their competing platform." Intervention, which mainly drills in North Dakota and has a small footprint in Montana, got $200 million in senior secured notes from EIG in 2012, which it used to finance well development costs. Court papers show Intervention owes EIG about $140 million. The Washington, D.C., firm provides capital to companies mainly in the energy sector. Mr. Zimmerman left Wall Street in 2008 to form Intervention, which now has more than 50,000 net acres of oil and gas leases. It is one of the largest companies focused on developing the Bakken and Three Forks areas in the Williston Basin. Mr. Zimmerman said in court papers that EIG and Intervention's relationship began to unravel shortly after the fall of 2015, when Intervention says it defaulted on its debt with EIG. EIG and Intervention struck a forbearance agreement and entered negotiations following the default, but the relationship stayed strained. However, a person close to the situation said that EIG and Intervention had agreed that the company couldn't file for bankruptcy protection without 100% of shareholder votes. EIG holds one share in the company, and didn't sign off on the petition, the person added. The company was also said to be in the forbearance agreement with EIG since June 2015, during which it was looking for an equity infusion after breaching certain guidelines on its loan, the person added. Intervention and investment banker Evercore, which was hired a year earlier to sell the company, last fall began meeting with potential debt or equity investors, according to court papers. Mr. Zimmerman said despite the extreme declines in oil and gas prices early this year, Intervention attracted three potential investors. By March, the relationship between EIG and Intervention soured to the point that EIG "rejected all proposals" from potential investors, Mr. Zimmerman said, and "indicated that they intended to let forbearance expire," according to court papers. Court papers also note that EIG pressured Intervention to move forward with a foreclosure, which allowed EIG to seize its assets and eliminate an existing equity account. EIG was also said to be in the final stages of an agreement with a different operator in the same region, which Mr. Zimmerman said "indicated that [Intervention's] assets would conveniently roll up into this pending sale transaction." Mr. Zimmerman added that this made it clear why EIG had stopped negotiating the forbearance agreement and allowed it to expire. The Minot, N.D., company said it had between $100 million and $500 million in both assets and liabilities. The company said in court papers it has reinvested about $75 million free cash back into the company, while EIG has invested roughly $32 million cash in common and preferred equity. Court papers show Intervention's average net daily production was about 2,250 barrels of oil equivalent in 2015, and daily production increased nearly 40% during the same year. Revenue from oil and gas sales was about $28.4 million in 2015. Though Intervention felt the pain of declining oil and gas prices, the company has been able to hold on to about $2.3 million in cash as of it filing date and expects to have up to $5.7 million by the middle of August. Other shale victims in the Williston Basin include Halcón Resources Corp. and Emerald Oil Inc. Halcón, a pioneer of the shale boom founded by Floyd C. Wilson, said Thursday it plans to file for chapter 11 protection if it can get enough creditors to sign off on a deal that would let it restructure more than $3 billion in debt. Stubbornly low crude prices have roiled the oil patch over the past year. Although crude prices have rebounded since hitting 52-week lows earlier this year, it has proved too little too late for many companies More than 77 North American exploration-and-production companies have filed for bankruptcy protection since the beginning of 2015, according to data from law firm Haynes and Boone LP. Judge Kevin Carey of the U.S. Bankruptcy Court in Wilimington, Del. will be overseeing the case. The company will seek permission to tap its lenders' cash and pay wages at a hearing next week. Write to Lillian Rizzo at Lillian.Rizzo@wsj.com and Patrick Fitzgerald at patrick.fitzgerald@wsj.com Corrections & Amplifications: A person close to the situation said that EIG and Intervention had agreed that the company couldn't file for bankruptcy protection without 100% of shareholder votes. EIG holds one share in the company, and didn't sign off on the petition, the person added. An earlier version of this article incorrectly stated Intervention held one share in the company. (May 22) Credit: By Lillian Rizzo and Patrick Fitzgerald
Subject: Bankruptcy reorganization; Bankruptcy
Location: Montana North Dakota
Company / organization: Name: Bankruptcy Court-US; NAICS: 922110; Name: EIG Global Energy Partners; NAICS: 523910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 20, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790082341
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790082341?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Rig Count Unchanged in Latest Week; Production outages around the world have led to gains in crude prices in recent weeks
Author: Jamerson, Joshua
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 May 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs fell by two in the latest week to 85.
Full text: The U.S. oil-rig count was unchanged at 318 in the latest reporting week, according to oil-field services company Baker Hughes Inc., as production outages around the world have led to gains in oil prices in recent weeks. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to tumble in 2014. The number of oil rigs in the U.S. peaked at 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs fell by two in the latest week to 85. The U.S. offshore-rig count was 24 in the latest week, up two from the previous week and down 5 from a year earlier. Crude oil prices edged lower on Friday but were still on track for a second straight week of gains as investors focused on supply disruptions in Canada, Libya and Nigeria. Wildfires in Canada and production outages in Nigeria and Libya have chipped away at the oversupply that has plagued the market for nearly two years. U.S. crude was recently down 0.43% at $48.46 a barrel. Write to Joshua Jamerson at joshua.jamerson@wsj.com Credit: By Joshua Jamerson
Subject: Oil service industry; Price increases; Crude oil prices
Location: Libya United States--US Nigeria Canada
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790082579
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790082579?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduce d with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Investor Interest in Energy Debt Funds Rebounds; Prolonged oil and gas price slump presents opportunity for firms
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 May 2016: n/a.
Abstract:
Investors have shown renewed interest in credit funds targeting the energy industry since 2015, as a continued slump in oil and gas prices presents opportunities to provide credit to cash-strapped companies, according to a report from data provider Preqin Ltd. Of all the natural-resources categories the data tracked from 2010 to 2015, energy accounted for the largest share, both in terms of the amount of capital raised and the number of funds.
Full text: Investors have shown renewed interest in credit funds targeting the energy industry since 2015, as a continued slump in oil and gas prices presents opportunities to provide credit to cash-strapped companies, according to a report from data provider Preqin Ltd. Of all the natural-resources categories the data tracked from 2010 to 2015, energy accounted for the largest share, both in terms of the amount of capital raised and the number of funds. From 2010 to 2015, 35 energy-related debt funds raised $23.2 billion total, compared with 19 funds that raised a total of $6.1 billion across all other categories for the same period, according to the report. Other categories the data tracked include agriculture and farmland; metals and mining; natural resources; and timberland. Fundraising for all categories reached a high in 2013, with 15 funds collecting $10.5 billion. In 2014--the year oil and gas prices began to slide--the amount of capital raised for such debt funds dropped to the lowest level recorded between 2010 and 2015, to $500 million. That year, the number of such funds stood at five, the lowest number recorded since 2010. In 2015, fundraising activities rebounded strongly, with nine funds raising $5.5 billion. The commodity price slump has attracted two types of firms, including diversified asset managers with experience in private debt, according to Preqin. Those firms "have come to view energy as a promising sector at a time of low yields in many other industries," according to the report. In this category Preqin cites Angelo Gordon & Co., which is seeking $1 billion for Angelo Gordon Energy Credit Opportunities Fund. The other type, according to the report, are energy specialists that have historically deployed equity funds and have branched out into debt funds. One example in this category, according to Preqin, is Riverstone Holdings, which is targeting $1 billion for a debut credit fund Riverstone Credit Partners. All told, 19 energy-related debt funds are in the market seeking to raise a total of $14.5 billion, according to Preqin. Write to Shasha Dai at shasha.dai@wsj.com Credit: By Shasha Dai
Subject: Energy industry; Equity funds
Company / organization: Name: Angelo Gordon & Co; NAICS: 237210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 20, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790104711
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790104711?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Freeport-McMoRan Formally Cancels Plans to Take Oil-and-Gas Business Public; Mining company has indicated it is considering possible sale or joint venture for business
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 May 2016: n/a.
Abstract:
The largest U.S. mining company by market value, which had filed last year to take Freeport-McMoRan Oil & Gas Inc. public , previously had indicated it was considering a possible sale or joint venture for the business that helped push it to a $4.2 billion loss in the latest quarter .
Full text: Freeport-McMoRan Inc., hard hit by the commodities market rout, has formally canceled plans to take its oil-and-gas business public. The largest U.S. mining company by market value, which had filed last year to take Freeport-McMoRan Oil & Gas Inc. public , previously had indicated it was considering a possible sale or joint venture for the business that helped push it to a $4.2 billion loss in the latest quarter . At the same time it posted the loss, Freeport in April said it would slash about 25% of its oil-and-gas workforce in a restructuring. The formal withdrawal of the initial public offering comes just two weeks after the company, which has been under pressure to cut its debt burden, said it had agreed to sell its stake in an African copper operation to China Molybdenum Co., a mining-and-processing concern, for $2.64 billion. The company agreed in October with activist investor Carl Icahn, one of Freeport's biggest shareholders, on a number of issues. He had pushed the company to cut its debt, spending and executive compensation. Under the deal, two Icahn affiliates were added to Freeport's board. Freeport-McMoRan's debt stood at $20.8 billion at the end of the first quarter. Mr. Icahn disclosed his 8.5% stake in the miner last summer. The Phoenix-based miner, which made an ill-timed bet on oil and gas in 2013, has been aggressively selling assets and slashing spending, including suspending dividend payouts and laying off workers in the past year. Its longtime chairman, James R. Moffett, an oil wildcatter who helped build Freeport into a commodities powerhouse , agreed to step down last year. Freeport's shares, down 47% over the past 12 months, edged down to $11.04 in after-hours trading. Write to Maria Armental at maria.armental@wsj.com Credit: By Maria Armental
Subject: Debt restructuring; Executive compensation; Financial performance
Location: United States--US
People: Moffett, James R
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 20, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790108716
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790108716?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Exxon Faces Proxy Access Showdown, Again; Last year's proposal was backed by 49.4% of votes cast
Author: Lublin, Joann S
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 May 2016: n/a.
Abstract:
Related * Yahoo Revises Bylaws to Grant Shareholders Proxy Access (March 30) * Amazon Offers Proxy Access (Feb. 25) * Apple Offers Proxy Access (Dec. 22, 2015) * Staples Adopts Proxy-Access Policy (Dec. 1, 2015) Among the big businesses doing so last year were General Electric Co., AT&T Inc., Apple Inc., Citigroup Inc. and McDonald's Corp. Companies handing investors the keys to their boardrooms typically changed corporate bylaws so owners with at least a 3% stake for at least three years can nominate several board members.
Full text: A showdown looms Wednesday for Exxon Mobil Corp. over proxy access, the latest push by investors seeking greater influence at the board level. Shareholders at the annual meeting of the world's largest publicly traded oil company will decide whether they favor giving investors greater power to propose director candidates. Proxy access was backed by 49.4% of votes cast last year. The resolution may pass this year, following a significant shift by Vanguard Group, Exxon's biggest institutional investor. A number of major U.S. companies already have opened up their corporate elections via proxy access, which gives shareholders more power to oust directors and influence corporate strategy by listing competing board candidates on official ballots for annual meetings. About 36% of S&P 500 companies have embraced proxy access, up from about 1% in 2014, said Institutional Shareholder Services, a proxy-advisory firm. Related * Yahoo Revises Bylaws to Grant Shareholders Proxy Access (March 30) * Amazon Offers Proxy Access (Feb. 25) * Apple Offers Proxy Access (Dec. 22, 2015) * Staples Adopts Proxy-Access Policy (Dec. 1, 2015) Among the big businesses doing so last year were General Electric Co., AT&T Inc., Apple Inc., Citigroup Inc. and McDonald's Corp. Companies handing investors the keys to their boardrooms typically changed corporate bylaws so owners with at least a 3% stake for at least three years can nominate several board members. Exxon remains the only one of the five largest U.S. oil-and-gas concerns without proxy access. "This is the most important vote of the 2016 proxy season," said New York City Comptroller Scott M. Stringer, who oversees $153.8 billion in pension funds. He is leading a campaign that initially challenged Exxon and 73 other companies to adopt or improve proxy access this year. Exxon "is the biggest company targeted," Mr. Stringer said. Fifty-one of those targets endorsed the idea ahead of their 2016 annual meetings. Shareholders' support averaged 60.2% at the nine companies whose latest meeting already has occurred. Mr. Stringer waged a similar proxy-access drive in 201 5, assisted by an influential bloc of public pension funds. "Many companies that had close calls in their votes last year ended up adopting some form of proxy access in advance of this (proxy) season,'' said Patrick S. McGurn, special counsel for ISS. Exxon remains opposed to proxy access. Board members don't see any meaningful evidence "that proxy access would improve corporate governance or enhance market capitalization,'' the company's latest proxy statement said. Proxy access instead could increase the influence of special-interest groups and "undermine a business model that has long served the interests of our shareholders well,'' according to the statement. Shareholder resolutions rarely garner majority support at Exxon. Indeed, environmentally minded investors have sought for decades to use its annual meeting as a bully pulpit, usually with limited success. They will try again this year with climate-change-related proposals. Only one Exxon investor resolution has passed since 2003, according to Alan T. Jeffers, a company spokesman. The successful 2006 measure urged Exxon to require that board members obtain most of the vote to get re-elected. Directors soon implemented majority voting. Proxy access could win approval this week at Exxon, partly due to a February policy change by Vanguard, which owned 6.3% of Exxon shares as of Dec. 31. The mutual-fund firm now favors allowing proxy access by investors holding as little as 3% of a company's shares, as stated in the Exxon proposal. Vanguard voted against the proposal at Exxon last year, when the firm supported a 5% threshold. Exxon's Mr. Jeffers declined to comment about how directors would respond if proxy access gets majority support this week. A shareholder proposal opposed by board members but blessed by investors would be reconsidered by the board, Exxon's governance guidelines state. Write to Joann S. Lublin at joann.lublin@wsj.com Credit: By Joann S. Lublin
Subject: Boards of directors; SEC proxy rules; Proxy statements; Corporate governance; Outside directors
Location: United States--US
People: Stringer, Scott M
Company / organization: Name: AT & T Inc; NAICS: 517110, 517210; Name: General Electric Co; NAICS: 334512, 334519, 332510, 334290; Name: Citigroup Inc; NAICS: 551111; Name: Apple Inc; NAICS: 511210, 334111, 334220
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 21, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790158193
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790158193?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Evacuation Order Lifted for Some Canadian Oil-Sands Sites; Move allows Suncor Energy and Syncrude unit to reopen two complexes shut down for more than two weeks because of Alberta wildfires
Author: McNish, Jacquie; Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 May 2016: n/a.
Abstract:
Related Reading * Alberta Wildfire Has Stopped Spreading, Officials Say (May 20) * Canada Wildfires Raise Threat to Oil-Sands Mining Operations (May 17) * Forest Fires Cut Into Canadian Oil Production (May 6) Twelve other work camps in the area remain subject the evacuation order issued earlier this week that affected some 8,000 workers.
Full text: CALGARY, Alberta--A mandatory evacuation order has been lifted at two Northern Alberta oil-sands production sites and five nearby work camps, as firefighters continue to make gains in combating raging wildfires in the region. The lifting of the order late on Friday allows Suncor Energy Inc., and its Syncrude subsidiary to reopen two major oil-sands production complexes that have been shut down for more than two weeks because of the threat from forest fires. A spokesman for Suncor said the company is preparing a schedule for a staged restarting of the plants. Although government officials say fire conditions remain extreme in heavily forested areas near the community of Fort McMurray, the blazes have receded directly north of town near Suncor's plants and the five work camps. Related Reading * Alberta Wildfire Has Stopped Spreading, Officials Say (May 20) * Canada Wildfires Raise Threat to Oil-Sands Mining Operations (May 17) * Forest Fires Cut Into Canadian Oil Production (May 6) Twelve other work camps in the area remain subject the evacuation order issued earlier this week that affected some 8,000 workers. It followed a broader evacuation of Fort McMurray earlier in the month that forced more than 80,000 people to flee the area. No oil-sands production facilities have been damaged by the fires, but at the height of the threat, Canadian oil production dropped by at least a million barrels a day, or about 40% of the country's total oil-sands output. Suncor has stopped output of 300,000 barrels of oil a day at two mines and a pair of oil-sands well sites. Its Syncrude unit has shut its 350,000-barrel-a-day-capacity mines. Oil-sands production is undertaken by a form of strip mining as well as through horizontally drilled wells tapping underground oil deposits. Poor air quality remains a concern because of smoke from fires in the surrounding forests, Karen Grimsrud, Alberta's chief medical officer, said on Friday. Unsafe levels of airborne pollutants could affect the timing of a planned lifting of the evacuation order in stages from June 1, Ms. Grimsrud said. Some oil-sands sites located further north of Fort McMurray have resumed production at reduced levels. Imperial Oil Ltd., Exxon Mobil Corp.'s Canadian unit, on Thursday said it had partially restarted operations at its Kearl oil sands mine about 47 miles northeast of Fort McMurray. Imperial Oil, which shut down the mine 10 days ago, didn't provide a timeline for resuming full operations at the facility, which has a capacity of 194,000 barrels a day. While not damaged, many oil-sands sites have been affected by staffing issues stemming from the evacuation of Fort McMurray's residents and logistics issues preventing them from shipping heavy crude. Pipeline operator Enbridge Inc. has reduced its oil-sands crude shipments by about 900,000 barrels a day, but has a capacity of 1.5 million barrels a day. Write to Jacquie McNish at Jacquie.McNish@wsj.com and Chester Dawson at chester.dawson@wsj.com Credit: By Jacquie McNish and Chester Dawson
Subject: Oil sands; Mines; Forest & brush fires; Petroleum production
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Imperial Oil Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 21, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790193536
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790193536?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Big Oil Deals: Don't Hold Your Breath; Energy busts usually bring large deals in the oil patch, but this time may be different
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 May 2016: n/a.
Abstract:
[...]oil companies are snapping up a few assets here and there such as Exxon Mobil's acquisition of acreage in the prolific Permian Basin last summer.
Full text: When the drill bits slow down, the checkbooks come out. Or so it used to go in the oil patch. Heading into the current energy bust, investors were on the lookout for takeovers of bombed-out energy assets, as in past cycles. But, with the price of oil still below half its level in the summer of 2014, it hasn't happened. Only one large acquisition has been inked, the takeover of Britain's BG Group by Royal Dutch Shell. Dozens of potential targets, both distressed and merely wounded, remain independent despite lots of wishful thinking from shareholders. While many look tempting, doing big deals is tougher this time around. Instead, oil companies are snapping up a few assets here and there such as Exxon Mobil's acquisition of acreage in the prolific Permian Basin last summer. One problem is that many companies are asset rich but cash poor. "It's like buying a home with a big mortgage on it. There isn't a lot of equity left there," Exxon chief Rex Tillerson said in March. But even companies that can be bought without financial baggage may stay single. That is because the ability to extract synergies is far less than during earlier busts. When Shell agreed to buy BG for about $70 billion, for example, it saw about $1.2 billion in upfront costs and $2.5 billion in eventual annual savings. It later raised that estimate when shareholders became skeptical . But its shares have lagged behind five peers by over 10 percentage points on average since announcing the deal. Shell's initial estimate of cost savings was about 0.6% of combined revenue. By contrast, when Chevron announced it was buying Texaco in October 2000 the savings were proportionately twice as high. When Exxon merged with Mobil in 1998, the estimated cost savings were even greater at about 1.5% of revenue. In both cases, the companies eliminated about 7% of their combined workforces. And when BP bought Amoco a few months before Exxon's deal, it achieved savings of about 1.4% of revenue. Energy companies, both gigantic ones and small fry, are much more efficient now. A big-oil executive recently observed that companies involved in extracting oil and gas from America's prolific shale deposits are good at what they do. While their beaten-down share prices might look attractive, tacking on a 30% or so premium as part of a buyout absent meaningful synergies wouldn't leave much meat on the bone. The longer the bust lasts, the less inclined big oil may be to do a deal. Not only will their own balance sheets be in worse shape, but distress among small fry will force them to sell reserves. Why buy the cow when you have the milk? Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Subject: Cost control; Stockholders; Energy industry
Location: United Kingdom--UK
People: Tillerson, Rex W
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BG Group PLC; NAICS: 486210, 211111, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 22, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790257194
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790257194?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks and Bonds Can Weather a Fed Rate Increase, Investors Say; Moves in dollar and oil, along with improved U.S. economy, should help markets avoid turmoil, fund managers say
Author: Zeng, Min; Cherney, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 May 2016: n/a.
Abstract:
First-quarter earnings for U.S. companies were poor, but "that may have been a nadir," said Ben Mandel, global strategist at J.P. Morgan Asset Management. Central banks in Europe and Japan have pushed their benchmark interest rates into negative territory in a bid to boost economic growth there, making U.S. Treasurys more attractive for foreign buyers.
Full text: Stock and bond markets appear ready to absorb the next Federal Reserve rate increase without descending into turmoil, fund managers say, reflecting economic shifts and investor positioning since the last Fed move in December. Fears of another market tantrum arose last week after Fed officials repeatedly warned that investors were underestimating the likelihood of a rise in the fed-funds rate at the central bank's June 14-15 meeting. The 10-year Treasury yield posted its largest one-day rise this year on Wednesday following the release of minutes saying the Fed could raise rates next month if economic growth continues. Yields rise when prices fall. Yet many portfolio managers say upheaval appears unlikely. One reason, they say, is that the dollar and oil are both offering markets much more comfort than they did as recently as last year. After rising significantly over the past two years, the WSJ Dollar Index, which measures the greenback against a basket of currencies, is down 2.9% for 2016, relieving pressure on the earnings of large U.S. companies and the finances of many emerging-market nations that have borrowed in dollars. Oil has rallied 82% from its 2016 low amid supply disruptions, taking pressure off U.S. energy producers and likely limiting further ripple effects from the crude collapse. A sharp selloff in stocks and bonds during the first six weeks of the year largely stemmed from fears the U.S. could be headed into recession. But several recent gauges of U.S. economic health, measuring industrial output, housing sales and consumer prices, have shown growing momentum. Wages have picked up after a long period of stagnant growth, but inflation broadly appears soft, likely giving the Fed room to raise rates only gradually. These factors, together with the declines over the past month in stock and bond prices, mean the market can handle a well-telegraphed rate increase, many investors say--the only kind most analysts believe the Fed would dare attempt. "There is a lot of money globally chasing very few high-quality assets," said Mark MacQueen, co-founder and portfolio manager at Sage Advisory Services Ltd., which oversees $12 billion. He said a quarter-point rise in the fed-funds rate likely won't change that dynamic, and that he might buy U.S. government bonds if the Fed raises rates. Concerns about a stock-market pullback in response to future rate increases often center on soft corporate earnings and extended valuations. But some analysts see signs in this year's energy recovery that the picture could be brightening. First-quarter earnings for U.S. companies were poor, but "that may have been a nadir," said Ben Mandel, global strategist at J.P. Morgan Asset Management. He believes U.S. stocks could offer mid-single-digit annual returns by the end of this year. The S&P 500 index is up 0.4% so far in 2016. Nor are investors overly worried about big price declines in U.S. government debt. Central banks in Europe and Japan have pushed their benchmark interest rates into negative territory in a bid to boost economic growth there, making U.S. Treasurys more attractive for foreign buyers. Demand from those investors is expected to keep prices on longer-term bonds steady, even as others sell short-term Treasurys, which are typically most sensitive to Fed policy. In another sign of the improved market tone since January, U.S. corporate-bond sales--even those from risky, highly levered companies--have picked up in recent months. Corporate-debt sales largely came to a halt earlier in the year, as jittery investors refused to lend money amid the market turmoil. But the market has opened up again, allowing a relatively low-rated company like Dell Inc. to sell $20 billion of investment-grade debt last week, the fourth-largest corporate-bond deal on record. Data from the Commodity Futures Trading Commission released Friday showed investors were growing more optimistic in certain parts of the market, underscoring the positive tone. Bullish bets by speculators on crude oil and long-term Treasurys increased while bearish bets declined, according to the data, which reflects positioning as of May 17. Investors have readjusted their interest-rate expectations significantly in recent days. About a week ago, interest-rate futures priced in just a 4% chance that the Fed would raise rates in June, according to CME Group. But the odds rose to 26% by Friday. The yield on the two-year Treasury note, highly sensitive to the Fed's policy outlook, rose by 0.13 percentage point last week to settle at 0.888%, the biggest weekly increase since November. The WSJ Dollar Index rose 0.8% last week. Not all investors are sounding the all clear. Despite the positive economic data in recent weeks, U.S. economic growth clocked in at a lackluster 0.5% in the first quarter. Concerns remain about the pace of economic growth in China, and a further slowdown there could reduce demand for commodities, lowering prices and renewing pressure on energy and mining firms. CFTC data show an uptick in bearish bets on the 10-year U.S. Treasury, whose yield has risen to 1.85% after earlier declines. But David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management, which had $27 billion of assets under management at the end of April, said any selloff likely would afford many investors the opportunity to hunt for value from beaten-down assets. "No matter whether the Fed raises rates in June, July or later, the key point is that the Fed is in for a very slow pace of normalizing its interest-rate policy, which is not the stuff that would push stocks into a bear market,'' he said. Write to Min Zeng at min.zeng@wsj.com and Mike Cherney at mike.cherney@wsj.com Credit: By Min Zeng and Mike Cherney
Subject: Interest rates; Stock exchanges; Prices; Investments; Economic growth; Government bonds; Treasuries
Location: United States--US
Company / organization: Name: Sage Advisory Services; NAICS: 525110; Name: JPMorgan Asset Management; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 22, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790259838
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790259838?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon Faces Proxy Access Showdown, Again; Last year's proposal was backed by 49.4% of votes cast
Author: Lublin, Joann S
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 May 2016: n/a.
Abstract:
Board members don't see any meaningful evidence "that proxy access would improve corporate governance or enhance market capitalization,'' the company's latest proxy statement said.
Full text: A showdown looms Wednesday for Exxon Mobil Corp. over proxy access, the latest push by investors seeking greater influence at the board level. Shareholders at this week's annual meeting of the world's largest publicly traded oil company will decide whether they favor giving investors greater power to propose director candidates. Proxy access was backed by 49.4% of votes cast last year. The resolution may pass this year, following a significant shift by Vanguard Group, Exxon's biggest institutional investor. A number of major U.S. companies already have opened up their corporate elections via proxy access, which gives shareholders more power to oust directors and influence corporate strategy by listing competing board candidates on official ballots for annual meetings. About 36% of S&P 500 companies have embraced proxy access, up from about 1% in 2014, said Institutional Shareholder Services, a proxy-advisory firm. Among the big businesses doing so last year were General Electric Co., AT&T Inc., Apple Inc., Citigroup Inc. and McDonald's Corp. Companies handing investors the keys to their boardrooms typically changed corporate bylaws so owners with at least a 3% stake for at least three years can nominate several board members. Related * Yahoo Revises Bylaws to Grant Shareholders Proxy Access (March 30) * Amazon Offers Proxy Access (Feb. 25) * Apple Offers Proxy Access (Dec. 22) * Staples Adopts Proxy-Access Policy (Dec. 1) Exxon remains the only one of the five largest U.S. oil-and-gas concerns without proxy access. "This is the most important vote of the 2016 proxy season," said New York City Comptroller Scott M. Stringer, who oversees $153.8 billion in pension funds. He is leading a campaign that initially challenged Exxon and 73 other companies to adopt or improve proxy access this year. Exxon "is the biggest company targeted." Fifty-one of those targets endorsed the idea ahead of their 2016 annual meetings. Proxy access gained majority support at six of the 10 companies whose latest meeting already has occurred. Mr. Stringer waged a similar proxy-access drive in 201 5, assisted by an influential bloc of public pension funds. "Many companies that had close calls in their votes last year ended up adopting some form of proxy access in advance of this [proxy] season,'' said Patrick S. McGurn, special counsel for ISS. Exxon remains opposed to proxy access. Board members don't see any meaningful evidence "that proxy access would improve corporate governance or enhance market capitalization,'' the company's latest proxy statement said. Proxy access instead could increase the influence of special-interest groups and "undermine a business model that has long served the interests of our shareholders well,'' according to the statement. Shareholder resolutions rarely garner majority support at Exxon. Indeed, environmentally minded investors have sought for decades to use its annual meeting as a bully pulpit, usually with limited success. They will try again this year with climate-change-related proposals. Only one Exxon investor resolution has passed since 2003, according to Alan T. Jeffers, a company spokesman. The successful 2006 measure urged Exxon to require that board members obtain most of the vote to get re-elected. Directors soon implemented majority voting. Proxy access could win approval this week at Exxon, partly due to a February policy change by Vanguard, which owned 6.3% of Exxon shares as of Dec. 31. The mutual-fund firm now favors allowing proxy access by investors holding as little as 3% of a company's shares, as stated in the Exxon proposal. Vanguard voted against the proposal at Exxon last year, when the firm supported a 5% threshold. Exxon's Mr. Jeffers declined to comment about how directors would respond if proxy access gets majority support this week. A shareholder proposal opposed by board members but favored by investors would be reconsidered by the board, Exxon's governance guidelines state. Write to Joann S. Lublin at joann.lublin@wsj.com Credit: By Joann S. Lublin
Subject: Boards of directors; Proxy statements; Corporate governance; Outside directors; SEC proxy rules
Location: United States--US
People: Stringer, Scott M
Company / organization: Name: AT & T Inc; NAICS: 517110, 517210; Name: General Electric Co; NAICS: 334512, 334519, 332510, 334290; Name: Citigroup Inc; NAICS: 551111; Name: Apple Inc; NAICS: 511210, 334111, 334220
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 22, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790273504
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790273504?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks and Bonds Can Weather a Fed Rate Increase, Investors Say; Moves in dollar and oil, along with improved U.S. economy, should help markets avoid turmoil, fund managers say
Author: Zeng, Min; Cherney, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 May 2016: n/a.
Abstract:
First-quarter earnings for U.S. companies were poor, but "that may have been a nadir," said Ben Mandel, global strategist at J.P. Morgan Asset Management. Central banks in Europe and Japan have pushed their benchmark interest rates into negative territory in a bid to boost economic growth there, making U.S. Treasurys more attractive for foreign buyers.
Full text: Stock and bond markets appear ready to absorb the next Federal Reserve rate increase without descending into turmoil, fund managers say, reflecting economic shifts and investor positioning since the last Fed move in December. Fears of another market tantrum arose last week after Fed officials repeatedly warned that investors were underestimating the likelihood of a rise in the fed-funds rate at the central bank's June 14-15 meeting. The 10-year Treasury yield posted its largest one-day rise this year on Wednesday following the release of minutes saying the Fed could raise rates next month if economic growth continues. Yields rise when prices fall. Yet many portfolio managers say upheaval appears unlikely. One reason, they say, is that the dollar and oil are both offering markets much more comfort than they did as recently as last year. After rising significantly over the past two years, the WSJ Dollar Index, which measures the greenback against a basket of currencies, is down 2.9% for 2016, relieving pressure on the earnings of large U.S. companies and the finances of many emerging-market nations that have borrowed in dollars. Oil has rallied 82% from its 2016 low amid supply disruptions, taking pressure off U.S. energy producers and likely limiting further ripple effects from the crude collapse. A sharp selloff in stocks and bonds during the first six weeks of the year largely stemmed from fears the U.S. could be headed into recession. But several recent gauges of U.S. economic health, measuring industrial output, housing sales and consumer prices, have shown growing momentum. Wages have picked up after a long period of stagnant growth, but inflation broadly appears soft, likely giving the Fed room to raise rates only gradually. These factors, together with the declines over the past month in stock and bond prices, mean the market can handle a well-telegraphed rate increase, many investors say--the only kind most analysts believe the Fed would dare attempt. "There is a lot of money globally chasing very few high-quality assets," said Mark MacQueen, co-founder and portfolio manager at Sage Advisory Services Ltd., which oversees $12 billion. He said a quarter-point rise in the fed-funds rate likely won't change that dynamic, and that he might buy U.S. government bonds if the Fed raises rates. Concerns about a stock-market pullback in response to future rate increases often center on soft corporate earnings and extended valuations. But some analysts see signs in this year's energy recovery that the picture could be brightening. First-quarter earnings for U.S. companies were poor, but "that may have been a nadir," said Ben Mandel, global strategist at J.P. Morgan Asset Management. He believes U.S. stocks could offer mid-single-digit annual returns by the end of this year. The S&P 500 index is up 0.4% so far in 2016. Nor are investors overly worried about big price declines in U.S. government debt. Central banks in Europe and Japan have pushed their benchmark interest rates into negative territory in a bid to boost economic growth there, making U.S. Treasurys more attractive for foreign buyers. Demand from those investors is expected to keep prices on longer-term bonds steady, even as others sell short-term Treasurys, which are typically most sensitive to Fed policy. In another sign of the improved market tone since January, U.S. corporate-bond sales--even those from risky, highly levered companies--have picked up in recent months. Corporate-debt sales largely came to a halt earlier in the year, as jittery investors refused to lend money amid the market turmoil. But the market has opened up again, allowing a relatively low-rated company like Dell Inc. to sell $20 billion of investment-grade debt last week, the fourth-largest corporate-bond deal on record. Data from the Commodity Futures Trading Commission released Friday showed investors were growing more optimistic in certain parts of the market, underscoring the positive tone. Bullish bets by speculators on crude oil and long-term Treasurys increased while bearish bets declined, according to the data, which reflects positioning as of May 17. Investors have readjusted their interest-rate expectations significantly in recent days. About a week ago, interest-rate futures priced in just a 4% chance that the Fed would raise rates in June, according to CME Group. But the odds rose to 26% by Friday. The yield on the two-year Treasury note, highly sensitive to the Fed's policy outlook, rose by 0.13 percentage point last week to settle at 0.888%, the biggest weekly increase since November. The WSJ Dollar Index rose 0.8% last week. Fed Chairwoman Janet Yellen will speak at Harvard University on May 27 and on June 6 before the World Affairs Council of Philadelphia. The June speech will come just over a week before the Fed's June policy meeting. Not all investors are sounding the all clear. Despite the positive economic data in recent weeks, U.S. economic growth clocked in at a lackluster 0.5% in the first quarter. Concerns remain about the pace of economic growth in China, and a further slowdown there could reduce demand for commodities, lowering prices and renewing pressure on energy and mining firms. CFTC data show an uptick in bearish bets on the 10-year U.S. Treasury, whose yield has risen to 1.85% after earlier declines. But David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management, which had $27 billion of assets under management at the end of April, said any selloff likely would afford many investors the opportunity to hunt for value from beaten-down assets. "No matter whether the Fed raises rates in June, July or later, the key point is that the Fed is in for a very slow pace of normalizing its interest-rate policy, which is not the stuff that would push stocks into a bear market,'' he said. Write to Min Zeng at min.zeng@wsj.com and Mike Cherney at mike.cherney@wsj.com Credit: By Min Zeng and Mike Cherney
Subject: Interest rates; Stock exchanges; Prices; Investments; Economic growth; Government bonds; Treasuries
Location: United States--US
Company / organization: Name: Sage Advisory Services; NAICS: 525110; Name: JPMorgan Asset Management; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 23, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790279314
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790279314?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Oil Prices Slip; Global Supply Glut Persists; July Brent crude fell $0.14 to $48.58 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 May 2016: n/a.
Abstract:
Prices were also retreating after oil-field services firm Baker Hughes Inc. reported the number of rigs drilling for oil in the U.S. was unchanged last week while number of oil rigs in the Permian Basin in West Texas rose.
Full text: Crude-oil prices slipped in early Asian trade Monday on fears that the global supply of oil will continue to outpace demand after some of the recent supply disruptions were halted. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $48.19 a barrel at 0122 GMT, down $0.22 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.14 to $48.58 a barrel. Supply outages in North America and Africa have been largely responsible for the recent rise in oil prices. However, as some of the supply disruptions are subsiding, traders are putting their focus back on the growth of global oil supply. "Oil markets are continuing to watch developments with the Canadian wildfires. The mandatory evacuation of some sites has been lifted," said ANZ Research. Lifting of the evacuation order late Friday allows Suncor Energy Inc., and its Syncrude subsidiary to reopen two major oil-sands production complexes that have been shut down for over two weeks because of the threat from forest fires. A spokesman for Suncor said the company is preparing a schedule for a staged restarting of the plants. No oil-sands production facilities have been damaged by the fires, but at the height of the threat, Canadian oil production dropped by at least a million barrels a day, or about 40% of the country's total oil-sands output. Prices were also retreating after oil-field services firm Baker Hughes Inc. reported the number of rigs drilling for oil in the U.S. was unchanged last week while number of oil rigs in the Permian Basin in West Texas rose. Analysts said that while U.S. crude production has slid in recent months, the uptrend in prices is likely to entice some U.S. shale producers who were marginalized earlier by the price collapse, to start new projects. "Traders are also beginning to try to second guess any outcome from the June 2 Organization Petroleum Exporting Countries meeting where current expectations are very low for any change in policy or production," said Stuart Ive, a client manager at OM Financial. Media reports said Iran recently reiterated it has no plan to join any production freeze at the upcoming OPEC meeting. Russian energy minister Alexander Novak was also reported to have said he expects global supply to outpace demand by some 1.5 million barrels a day, with a forecast of an average oil price in 2016 at $40-$50 a barrel. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 59 points to $1.6297 a gallon, while June diesel traded at $1.4858, 42 points lower. ICE gasoil for June changed hands at $439.50 a metric ton, down $1.25 from Friday's settlement. Jacquie McNish and Chester Dawson contributed to this story. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil; Crude oil prices; Petroleum production; Oil sands
Location: United States--US Africa North America
People: Novak, Alexander
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 23, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790282291
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790282291?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News -- The Week Ahead: Exxon Faces a Proxy-Access Vote
Author: Lublin, Joann S
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 May 2016: B.2.
Abstract:
Board members don't see any meaningful evidence "that proxy access would improve corporate governance or enhance market capitalization," the company's latest proxy statement said.
Full text: A showdown looms Wednesday for Exxon Mobil Corp. over proxy access, the latest push by investors seeking greater influence at the board level. Shareholders at this week's annual meeting of the world's largest publicly traded oil company will decide whether they favor giving investors greater power to propose director candidates. Proxy access was backed by 49.4% of votes cast last year. The resolution may pass this year, following a significant shift by Vanguard Group, Exxon's biggest institutional investor. A number of major U.S. companies already have opened up their corporate elections via proxy access, which gives shareholders more power to oust directors and influence corporate strategy by listing competing board candidates on official ballots for annual meetings. About 36% of S&P 500 companies have embraced proxy access, up from about 1% in 2014, said Institutional Shareholder Services, a proxy-advisory firm. Among the big businesses doing so last year were General Electric Co., AT&T Inc., Apple Inc., Citigroup Inc. and McDonald's Corp. Companies handing investors the keys to their boardrooms typically changed corporate bylaws so owners with at least a 3% stake for at least three years can nominate several board members. Exxon remains the only one of the five largest U.S. oil-and-gas concerns without proxy access. "This is the most important vote of the 2016 proxy season," said New York City Comptroller Scott M. Stringer, who oversees $153.8 billion in pension funds. He is leading a campaign that initially challenged Exxon and 73 other companies to adopt or improve proxy access this year. Exxon "is the biggest company targeted." Fifty-one of those targets endorsed the idea ahead of their 2016 annual meetings. Proxy access gained majority support at six of the 10 companies whose latest meeting already has occurred. Mr. Stringer waged a similar proxy-access drive in 2015, assisted by an influential bloc of public pension funds. "Many companies that had close calls in their votes last year ended up adopting some form of proxy access in advance of this [proxy] season," said Patrick S. McGurn, special counsel for ISS. Exxon remains opposed to proxy access. Board members don't see any meaningful evidence "that proxy access would improve corporate governance or enhance market capitalization," the company's latest proxy statement said. Proxy access instead could increase the influence of special-interest groups and "undermine a business model that has long served the interests of our shareholders well," according to the statement. Shareholder resolutions rarely garner majority support at Exxon. Indeed, environmentally minded investors have sought for decades to use its annual meeting as a bully pulpit, usually with limited success. They will try again this year with climate-change-related proposals. Only one Exxon investor resolution has passed since 2003, according to Alan T. Jeffers, a company spokesman. The successful 2006 measure urged Exxon to require that board members obtain most of the vote to get re-elected. Directors soon implemented majority voting. Proxy access could win approval this week at Exxon, partly due to a February policy change by Vanguard, which owned 6.3% of Exxon shares as of Dec. 31. The mutual-fund firm now favors allowing proxy access by investors holding as little as 3% of a company's shares, as stated in the Exxon proposal. Vanguard voted against the proposal at Exxon last year, when the firm supported a 5% threshold. Exxon's Mr. Jeffers declined to comment about how directors would respond if proxy access gets majority support this week. A shareholder proposal opposed by board members but favored by investors would be reconsidered by the board, Exxon's governance guidelines state. Credit: By Joann S. Lublin
Subject: Corporate governance; Shareholder voting; Proxies; Boards of directors; SEC proxy rules
Location: United States--US
People: Stringer, Scott M
Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110
Classification: 2110: Boards of directors; 4310: Regulation; 2400: Public relations; 9190: United States; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: May 23, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790308828
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790308828?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Slips on Supply Concerns; Prospects of a return of Canadian and Libyan supply push prices lower
Author: Puko, Timothy; Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 May 2016: n/a.
Abstract:
The Organization of the Petroleum Exporting Countries is unlikely to bail the market out with production cuts or a freeze.
Full text: Oil prices fell Monday for a fourth-straight session on renewed concerns about a global glut in crude supply. U.S. crude for June delivery settled down 33 cents, or 0.7%, at $48.08 a barrel on the New York Mercantile Exchange. U.S. oil has fallen 0.5% during the losing streak, its longest in a month. Brent, the global benchmark, fell 37 cents, or 0.8%, to $48.35 a barrel on ICE Futures Europe. There are signs that some of the biggest supply disruptions, in Canada and Africa, are ending, which return oil's glut nearly to the levels that helped crash the market from highs of above $100 a barrel two years ago. Many bank analysts expect prices can still rise later this year, but for now the pressure that pushed oil to a yearly high of around $50 a barrel has eased, analysts said. "As output returns, especially in Nigeria and Canada, our view is that there will be downside to prices in the very near term--in the next few weeks," analysts at Société Générale SA said in a note. "The Canadian output is more certain to return than the others; it is simply a question of when, not if." On Friday, Canadian officials lifted the mandatory evacuation order that had been placed on some production sites in Canada's wildfire ravaged province of Alberta. That allowed Suncor Energy Inc. and its Syncrude subsidiary to reopen two major oil-sands production complexes that had been shut down for over two weeks. The closure of these sites alone had pushed Canada's crude production down by around one million barrels a day. Analysts have also talked about the potential for increased supply out of Libya. Libya's state-run National Oil Co. on Friday said that a 660,000 barrel cargo had sailed from a port in the country's east. Oil exports from Libya are being supported by the United Nations amid a protracted struggle between two governments that claim authority in the country. Société Générale also said that more than a fourth of the oil disruptions out of Nigeria had ended. Adding to concerns over continued oversupply, last Friday saw the first increase in the U.S. rig count for 17 consecutive weeks. Analysts have said that higher oil prices will entice producers to pump more crude, limiting how quickly and how far rallies can go in the futures market. The Organization of the Petroleum Exporting Countries is meeting June 2, but few expect it to enact production cuts or a freeze that would help ease oversupply. Over the weekend Iran reiterated it has no plan to join any production freeze at this meeting. "All signs suggest this will be another nonevent," Dominick Chirichella, analyst at the Energy Management Institute, said of the meeting. Prices did rebound from losses that had been much larger, thanks mostly to a steep decline in the amount of oil at the delivery point for the West-Texas-Intermediate-oil contract, a broker and analyst said. Data provider Genscape Inc. said Monday that stockpiles at Cushing, Okla., fell by 979,000 barrels in the week that ended Friday, with nearly all of that decline happening in the second half of the week, according to a person who had reviewed the report. That is likely a delayed impact from the outages in Canada, said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. Canadian oil is heavy and thick, flowing through pipelines, causing it to move at such a slow rate that it can take weeks to get to Cushing from Canada. "Next week, because of the lag effect, that number is going to get bigger," Mr. Flynn said. "It was kind of a shock to people who thought we were going to get by unscathed." These outages are likely to keep prices moving upward for the next six months, offsetting stronger OPEC supply, Goldman Sachs Group Inc. said in a note dated Friday and released to reporters late Sunday night. Both the supply disruptions and demand have been greater than expected, likely leading to sharp reductions in inventories in the industrialized world, the bank said. Gasoline futures did flip to gains after the Genscape data release, settling up 1 cent, or 0.6%, to $1.6456 a gallon. Diesel futures lost 1.25 cents, or 0.8%, to $1.4775 a gallon. Jenny W. Hsu and Georgi Kantchev contributed to this article. Write to Timothy Puko at tim.puko@wsj.com and Miriam Malek at Miriam.Malek@wsj.com Credit: By Timothy Puko and Miriam Malek
Subject: Petroleum production; Price increases; Supply & demand
Location: Africa United States--US Canada Libya North America
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: United Nations--UN; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 23, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790320621
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
GE to Invest $1.4 Billion in Saudi Arabia; U.S. conglomerate teams up with Saudi state-owned oil firm Aramco and others to open up economy
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 May 2016: n/a.
Abstract:
The U.S. conglomerate said it plans to double its workforce in the kingdom by 2020 to 4,000 employees and would team up with two partners, including Saudi state-owned oil company Aramco, to build a $400 million manufacturing facility for the energy and marine sector.
Full text: DUBAI--General Electric Co. on Monday announced a raft of investments worth at least $1.4 billion in Saudi Arabia as the Persian Gulf kingdom seeks to reduce its oil dependence by further opening up its economy to international businesses. The U.S. conglomerate said it plans to double its workforce in the kingdom by 2020 to 4,000 employees and would team up with two partners, including Saudi state-owned oil company Aramco, to build a $400 million manufacturing facility for the energy and marine sector. GE also signed a memorandum of understanding to jointly invest $1 billion in several sectors such as water and aviation by 2017, alongside a Saudi entity comprising the country's biggest petrochemicals company, its public investment fund and Aramco. GE said also it would consider an additional $2 billion worth of investments in the same sectors after 2017. "The joint investment and collaboration will be a game changer for the kingdom's industrial and digital sectors," said GE Chief Executive Jeffrey Immelt, who was meeting with ministers and business leaders in the coastal city of Jeddah on Monday. GE's investments come at a time when the Saudi government is trying to completely overhaul the country's oil-dependent economy after the collapse in crude prices. The economy is straddled with a bloated public sector and is predominantly fueled by oil revenue. As part of its new economic strategy, Saudi Arabia is trying to attract more international investors and their know-how to help create jobs for its growing population, while also trying to boost sectors that don't rely on the country's oil wealth. It also envisages a greater role for the private sector to provide jobs for Saudi citizens. "This strategic alliance with GE is an ideal fit to deliver on these goals, and together we will contribute to the long-term economic competitiveness and diversified growth of the Saudi economy," said Abdullatif Al-Othman, chairman of SAIIC, the entity with which GE is planning the investments. GE already employs around 2,000 people in Saudi Arabia as it has three offices and seven facilities there. The company also has the world's largest gas turbine service facility in Dammam. It was opened in 2011. Write to Nicolas Parasie at nicolas.parasie@wsj.com Credit: By Nicolas Parasie
Subject: Alliances
Location: United States--US Persian Gulf Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 23, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790439982
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790439982?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Hedge-Fund Star Kyle Bass Slips on Oil; Collapse in energy prices hits Bass's Hayman Capital Management; firm's main fund is down about 7% this year
Author: Zuckerman, Gregory; Copeland, Rob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 May 2016: n/a.
Abstract:
Hayman's long-term record remains strong. Since Mr. Bass launched Hayman a decade ago, his main fund is up 285% after fees, according to an investor, compared with the S&P 500's 99% gain, including dividends. [...]most of his investors profited.
Full text: Hedge-fund manager Kyle Bass made a killing when the mortgage bubble popped. He wasn't as lucky with the oil bust. Reassured in part by a March 2015 meeting with energy investor T. Boone Pickens, who said the glut of crude wasn't going to overwhelm the country's ability to store it, Mr. Bass began buying shares of oil producers like Concho Resources Inc. and Whiting Petroleum Corp. It was a big mistake. Energy prices collapsed anew , extending what has become Mr. Bass's worst streak since he launched Hayman Capital Management LP a decade ago. So far in 2016, Hayman's main fund is down about 7%, according to investors, well short of the 1.3% gain for the S&P 500, including dividends--putting the fund on track for its third straight year of losses. "Everyone has terrible periods," Mr. Bass said in an interview, acknowledging he bought into an energy rebound too soon. "I had no idea crude would fall so low." A representative for Mr. Pickens, referring to the meeting with Mr. Bass, said: "We pushed back on his full storage concerns and were right on that. What investment decisions Kyle made after that meeting and other research he conducted we don't know." * Goldman on Handicapping Fed * Why Anthem and Cigna Are Fighting * Market Refuses to Get Punked by Fed * What Really Makes Bull Markets Die Mr. Bass's penchant for publicly adopting big, contrarian positions has made him one of Wall Street's most scrutinized investors . Though he followed his successful mortgage wager with winning moves against Greek debt and the Japanese yen, Mr. Bass's recent losses--and a shift by hedge-fund investors to become more skeptical about hedge funds--raise the stakes for Mr. Bass. He has placed a big, new wager against China's currency , a trade that looked good at first, but has suffered as China's markets stabilized. Mr. Bass's firm now manages about $770 million, according to people close to the matter, down from $2.3 billion at the end of 2014. Mr. Bass moved to return more than $1 billion to investors last year after scoring profits on a bet against Japan, but he has also had some investor withdrawals, according to people close to the matter. "It's easy to maintain conviction," Mr. Bass told a hedge-fund conference in Las Vegas this month. "It's harder to maintain investors." Hayman's long-term record remains strong. Since Mr. Bass launched Hayman a decade ago, his main fund is up 285% after fees, according to an investor, compared with the S&P 500's 99% gain, including dividends. At times, Mr. Bass's investors have profited even when his predictions didn't pan out. Mr. Bass's big bet that Japanese interest rates would soar now looks like folly. The country's central bank adopted negative interest rates early this year, and the 10-year Japanese government bond yielded minus-0.10% Monday. But the bulk of his trade was predicated on a weakening Japanese yen, and Hayman exited the bearish yen trade before the currency strengthened. As a result, most of his investors profited. Between his various Japanese investment vehicles, Mr. Bass scored blended returns of 54% from 2010 to 2014, investors say. Hayman has outperformed the market over the past decade while at the same time providing protection through its bearish investments, said Wil VanLoh, a Houston private-equity founder who personally invests with Hayman. "But returns are going to be lumpy," he said. "You will have several down years followed by an exceptional up year." Hayman has 22 employees, down from 32 last year. Some investors have voiced concern to Mr. Bass that his firm is based in Dallas, while Mr. Bass now spends about half his time in San Francisco. Mr. Bass says he remains fully involved in his firm and needs fewer employees because he has pulled back from other trading to concentrate on "macro" investing in global markets. More on Kyle Bass * Bass to Raise Fees If China Bet Hits Big * Kyle Bass Steps Up Attack on China's Currency (Feb. 10) * Goldman Sachs and Bear Stearns: A Financial-Crisis Mystery Is Solved (March 28) * Kyle Bass: The Man Who Shorted the World (March 29) "I'm up at two or three in the morning, checking on Asian markets--the focus on the business has never been lost," he said. Recently, Mr. Bass has been shorting Asian currencies, including the Chinese yuan and the Hong Kong dollar. About 85% of Hayman Capital's portfolio is invested in trades expected to pay off if the yuan and Hong Kong dollar depreciate over the next three years. The firm is launching a dedicated fund to make these trades. Early this year, Hayman's main fund was up 5.5% as Chinese markets crumbled. But when the Chinese government bought enough yuan to stabilize markets, his fund suffered. Mr. Bass anticipates a drop of as much as 40% in the yuan, as China's debt-laden banking system forces the government to inject trillions of dollars in yuan to recapitalize banks. Investors say the trade, structured with derivatives, will cost Hayman about 5% a year if the currencies hold steady or gain in value, but will generate annual gains of more than 50% if they fall more than 10%. Skeptics note China maintains the largest holdings of foreign reserves in the world at $3.3 trillion and that its markets have stabilized. The Chinese currency "is undoubtedly overvalued and will decline in value over time," said Michael Lewitt, a hedge-fund manager and newsletter writer. "But as tempting and exciting as it is to imagine a Chinese collapse, it simply isn't going to happen quickly." Mr. Bass believes otherwise, contending that China should be facing problems that will allow the fund to profit within 18 months. Meanwhile, the yuan has weakened versus the dollar in recent days. "No country has ever grown its banking system as quickly and recklessly," Mr. Bass says, adding that his performance will "be redefined over the next two years." Write to Gregory Zuckerman at gregory.zuckerman@wsj.com and Rob Copeland at rob.copeland@wsj.com Credit: By Gregory Zuckerman and Rob Copeland
Subject: Interest rates; Investments; Hedge funds
Location: China
People: Pickens, T Boone Jr
Company / organization: Name: Concho Resources Inc; NAICS: 211111, 211112; Name: Hayman Capital Management LP; NAICS: 525990; Name: Whiting Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 23, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790487038
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790487038?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The Market May Crowd Out the OPEC Cartel; If Mr. Yergin's prediction pans out as described, will be the demise of the oil cartel and a return to real market forces setting the price of crude oil.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 May 2016: n/a.
Abstract:
What's most important in this development, if it pans out as described, will be the demise of the oil cartel and a return to real market forces setting the price of crude oil.
Full text: Daniel Yergin's excellent "Where Oil Prices go From Here " (op-ed, May 16) suggests that shale-oil production in the U.S. will increase once the world's crude-oil supply and consumption return to balance later this year. This is a very optimistic scenario as it is unlikely that the Saudis will reverse their production policy. Market forces will also ensure that other members of OPEC will start increasing production rather than sticking to their quotas. This is happening with Saudi Arabia, which is likely to produce 12 million barrels a day within 18 months to counteract the increasing surge in Iranian production. Venezuelan production will also increase within a few years after there is a more oil-company friendly government in power. What's most important in this development, if it pans out as described, will be the demise of the oil cartel and a return to real market forces setting the price of crude oil. Such an event will be welcomed by consumers who have had to put up with high prices, in part, determined by the most successful cartel in history. Brian McBeth, D.Phil. Oxford, U.K.
Subject: Petroleum production; Crude oil; Price increases
Location: United States--US Saudi Arabia
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publicationyear: 2016
Publication date: May 23, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790516574
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Retreat On Near-Term Supply-Growth Concerns; July Brent crude fell $0.19 to $48.16 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract:
According to research firm IHS, oil and gas volumes discovered in 2015 were the lowest in 64 years as energy companies pull back from exploration amid low prices.
Full text: Crude-oil prices were lower in early Asian trade Tuesday, weighed down by concerns of a growing global supply as outages around the world are winding down. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $47.92 a barrel at 0142 GMT, down $0.16 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.19 to $48.16 a barrel. Oil prices have been in the doldrums in the last few sessions on signs that supply disruptions in Canada and Africa are coming to an end. In Canada, while the wildfires aren't yet completely contained, the authorities have lifted the mandatory evacuation order, allowing Suncor Energy Inc. to resume operations in two major oil-sands production complexes. Oil exports from Libya are also improving. The country is expected to release a 660,000-barrel cargo after political unrest shuttered the port of Marsa al-Hariga for more than two weeks. However, the ongoing strike by French oil workers might dent global supply. According to energy consultant FGE, the strike could mean that production outages at six of the country's eight refineries could last for 72 hours to a week. "If the strike turns out to be prolonged, with French refinery runs severely reduced, it may lead to higher products imports into the most-affected regions of France, but lower imports of crude," said FGE. But while Canadian wildfires and the French strike will affect the market balance, they are only "passing influence" compared with the persistent uptrend in production by members of the Organization of Petroleum Exporting Countries, said Tim Evans, a Citi Futures analyst. "Every indication we have is that the June 2 OPEC summit in Vienna will leave the status quo in place, with Iran still ramping production higher, Saudi Arabia determined to continue competing for market share, and OPEC as a whole left without even a nominal overall production target," he added. "It would leave open the possibility that a further increase in OPEC total production will further postpone the anticipated rebalancing of the global market," said Mr. Evans. As OPEC ramps up production, analysts are counting on non-cartel players to help erode the glut. Neil Beveridge, senior analyst at Bernstein Research, expects the oil markets to shift into deficit by next quarter as non-OPEC production declines by 1.1 to 1.2 million barrels to 56.5 million barrels a day this year -- lower than the 57 million barrels a day forecast by the International Energy Agency. "We expect oil markets to shift from oversupply to deficit by the third quarter of 2016 as demand continues to grow at 1.2 to 1.4 million barrels a day and non-OPEC supply declines accelerate," he said. Moreover, waning volume of new oil and gas discoveries is also likely to prop up prices. According to research firm IHS, oil and gas volumes discovered in 2015 were the lowest in 64 years as energy companies pull back from exploration amid low prices. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 34 points to $1.6422 a gallon, while June diesel traded at $1.4760, 15 points lower. ICE gasoil for June changed hands at $438.25 a metric ton, down $0.50 from Monday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Supply & demand; Futures; Energy industry
Location: Africa Canada
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: ICE Futures; NAICS: 523210; Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790528474
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790528474?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Trips Hedge-Fund Star
Author: Zuckerman, Gregory; Copeland, Rob
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 May 2016: C.1.
Abstract:
Hayman's long-term record remains strong. Since Mr. Bass launched Hayman a decade ago, his main fund is up 285% after fees, according to an investor, compared with the S&P 500's 99% gain, including dividends. [...]most of his investors profited.
Full text: Hedge-fund manager Kyle Bass made a killing when the mortgage bubble popped. He wasn't as lucky with the oil bust. Reassured in part by a March 2015 meeting with energy investor T. Boone Pickens, who said the glut of crude wasn't going to overwhelm the country's ability to store it, Mr. Bass began buying shares of oil producers like Concho Resources Inc. and Whiting Petroleum Corp. It was a big mistake. Energy prices collapsed anew, extending what has become Mr. Bass's worst streak since he launched Hayman Capital Management LP a decade ago. So far in 2016, Hayman's main fund is down about 7%, according to investors, well short of the 1.3% gain for the S&P 500, including dividends -- putting the fund on track for its third consecutive year of losses. "Everyone has terrible periods," Mr. Bass said in an interview, acknowledging he bought into an energy rebound too soon. "I had no idea crude would fall so low." A representative for Mr. Pickens, referring to the meeting with Mr. Bass, said: "We pushed back on his full storage concerns and were right on that. What investment decisions Kyle made after that meeting and other research he conducted we don't know." Mr. Bass's penchant for publicly adopting big, contrarian positions has made him one of Wall Street's most scrutinized investors. Though he followed his successful mortgage wager with winning moves against Greek debt and the Japanese yen, Mr. Bass's recent losses -- and a shift by hedge-fund investors to become more skeptical about hedge funds -- raise the stakes for Mr. Bass. He has placed a big, new wager against China's currency, a trade that looked good at first, but has suffered as China's markets stabilized. Mr. Bass's firm now manages about $770 million, according to people close to the matter, down from $2.3 billion at the end of 2014. Mr. Bass moved to return more than $1 billion to investors last year after scoring profits on a bet against Japan, but he also has had some investor withdrawals, according to people close to the matter. "It's easy to maintain conviction," Mr. Bass told a hedge-fund conference in Las Vegas this month. "It's harder to maintain investors." Hayman's long-term record remains strong. Since Mr. Bass launched Hayman a decade ago, his main fund is up 285% after fees, according to an investor, compared with the S&P 500's 99% gain, including dividends. At times, Mr. Bass's investors have profited even when his predictions didn't pan out. Mr. Bass's big bet that Japanese interest rates would soar now looks like folly. The country's central bank adopted negative interest rates early this year, and the 10-year Japanese government bond yielded minus-0.10% Monday. But the bulk of his trade was predicated on a weakening Japanese yen, and Hayman exited the bearish yen trade before the currency strengthened. As a result, most of his investors profited. Between his various Japanese investment vehicles, Mr. Bass scored blended returns of 54% from 2010 to 2014, investors say. Hayman has outperformed the market over the past decade while at the same time providing protection through its bearish investments, said Wil VanLoh, a Houston private-equity founder who personally invests with Hayman. "But returns are going to be lumpy," he said. "You will have several down years followed by an exceptional up year." Hayman has 22 employees, down from 32 last year. Some investors have voiced concern to Mr. Bass that his firm is based in Dallas, while Mr. Bass now spends about half his time in San Francisco. Mr. Bass says he remains fully involved in his firm and needs fewer employees because he has pulled back from other trading to concentrate on "macro" investing in global markets. "I'm up at two or three in the morning, checking on Asian markets -- the focus on the business has never been lost," he said. Recently, Mr. Bass has been shorting Asian currencies, including the Chinese yuan and the Hong Kong dollar. About 85% of Hayman Capital's portfolio is invested in trades expected to pay off if the yuan and Hong Kong dollar depreciate over the next three years. The firm is launching a dedicated fund to make these trades. Mr. Bass anticipates a drop of as much as 40% in the yuan, as China's debt-laden banking system forces the government to inject trillions of dollars in yuan to recapitalize banks. Investors say the trade, structured with derivatives, will cost Hayman about 5% a year if the currencies hold steady or gain in value, but will generate annual gains of more than 50% if they fall more than 10%. Skeptics note China maintains the largest holdings of foreign reserves in the world at $3.3 trillion and that its markets have stabilized. The yuan "is undoubtedly overvalued and will decline in value over time," said Michael Lewitt, a hedge-fund manager and newsletter writer. "But as tempting and exciting as it is to imagine a Chinese collapse, it simply isn't going to happen quickly." Mr. Bass believes that China should be facing problems that will allow the fund to profit within 18 months. "No country has ever grown its banking system as quickly and recklessly," Mr. Bass says, adding that his performance will "be redefined over the next two years." Credit: By Gregory Zuckerman and Rob Copeland
Subject: Interest rates; Renminbi; Petroleum industry; Hedge funds; Portfolio management
People: Pickens, T Boone Jr Bass, Kyle
Company / organization: Name: Concho Resources Inc; NAICS: 211111, 211112; Name: Whiting Petroleum Corp; NAICS: 211111; Name: Hayman Capital Management LP; NAICS: 525990
Classification: 8130: Investment services; 8510: Petroleum industry; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: May 24, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790561398
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790561398?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Venezuelan Oil Firm Offers Debt Swap
Author: Kurmanaev, Anatoly; Armas, Mayela
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 May 2016: B.2.
Abstract:
Venezuela's cash-strapped state oil company is offering service providers a debt exchange, proposing to swap $2.5 billion worth of debt for dollar bonds, according to two contractors who were offered the deal and documents reviewed by The Wall Street Journal.
Full text: CARACAS -- Venezuela's cash-strapped state oil company is offering service providers a debt exchange, proposing to swap $2.5 billion worth of debt for dollar bonds, according to two contractors who were offered the deal and documents reviewed by The Wall Street Journal. Under the deal, a subsidiary of Petroleos de Venezuela SA, known as PDVSA, would issue a three-year international bond and hand it to approved suppliers in exchange for canceling some of the $20 billion worth of unpaid invoices. The bond would be priced at about a 40% discount to the company's benchmark obligation, which trades at about 45 cents on the dollar, said the deal prospectus and the people familiar with the offer. PDVSA representatives began sounding out local and international suppliers last week to gauge interest in the swap, and the company has hired Miami firm CP Capital Securities to arrange the transaction, said the people. PDVSA and CP Capital didn't reply to requests for comment. "CP Capital has been hired to advise PDVSA on the exchange of commercial invoices for financial debt with a minimum amount of $2.5 billion," read a deal prospectus viewed by the Journal. Venezuela's oil production has slipped 150,000 barrels this year to 2.5 million barrels a day, according to the Organization of the Petroleum Exporting Countries, as service giants Schlumberger and Halliburton reduced activity because of unpaid bills. The government has been struggling to boost output to alleviate acute shortages of imported food and medicine, which are fueling riots and looting across the country. Both contractors interviewed by the Journal said they would reject the deal in its current form, as the value of the offered bonds is less than the amount of debt they expect to get back through litigation. The bond issue would raise the financial burden for a government already struggling to meet its international obligations. The Venezuelan government and PDVSA are due to make about $6 billion worth of bond payments through the end of the year, obligations which consultancy Sintesis Financiera believes can only be met by cutting imports of basic goods to the lowest per capita levels since the 1950s. Credit: By Anatoly Kurmanaev and Mayela Armas
Subject: Bond issues; International finance; Petroleum production; Debt exchanges
Location: Venezuela
Company / organization: Name: Petroleos de Venezuela SA; NAICS: 211111
Classification: 3100: Capital & debt management; 9173: Latin America
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: May 24, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790561534
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Rise as Supply Concerns Persist; Light, sweet crude for July reaches highest settlement price since October
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its data for that week showed a 5.1-million-barrel decrease in crude supplies, a 3.6-million-barrel increase in gasoline stocks and a 2.9-million-barrel decrease in distillate inventories, according to market participants.
Full text: NEW YORK--U.S. oil prices rose to a new 2016 high Tuesday on expectations that continued supply disruptions would help reduce the oversupply of crude. Light, sweet crude for July delivery settled up 54 cents, or 1.1%, to $48.62 a barrel on the New York Mercantile Exchange, the highest settlement since October. Brent, the global benchmark, rose 26 cents, or 0.5%, to $48.61 a barrel on ICE Futures Europe. Brent crude hasn't settled below the U.S. benchmark since January. U.S. oil prices have surged more than 85% from their mid-February lows on expectations that the global crude glut that sent prices plunging in mid-2014 is set to shrink. Production has started to fall in some regions including the U.S. due to spending cuts, and unexpected outages in other countries are keeping additional barrels off the market. Citigroup Inc. on Tuesday called for Brent crude to reach $50 a barrel in the third quarter, up from its previous forecast that Brent wouldn't reach that level until the fourth quarter. "In Nigeria, Venezuela, Libya and a host of other countries, the threat of disruptions seems to be increasing and not decreasing," the bank's analysts said in a note. "Prices look likely to march forward to the mid-$60 range." Related Reading * The Market May Crowd Out the OPEC Cartel * Oil Slips on Supply Concerns * Chevron CEO John Watson on the Role of OPEC Nigerian production, which has fallen to multiyear lows following pipeline attacks, "will remain subject to major outages for at least the next 12 months," said Protection Group International Ltd. in a note. "Pipeline attacks are likely to continue at their current frequency in at least the short to medium term, and the security situation could deteriorate further if a government crackdown on suspected militants provokes a broader backlash." But outages in some regions might prove temporary, analysts say, and the return of that production could push prices lower. Canada's oil sands production was curtailed after wildfires but is expected to resume. Libyan exports could return to the market, with renewed backing from the United Nations to export cargoes from a disputed terminal in the East. Some analysts also expect increased production in the Middle East. Iraqi media reported on Tuesday that output from Iraq had reached a record high, citing government figures. Iran has also reiterated it has no plans to slash output at the moment. Traders are waiting on weekly U.S. inventory data due Wednesday. U.S. stockpiles of crude oil have fallen in recent weeks after hitting the highest level in more than 80 years. Analysts and traders surveyed by The Wall Street Journal expect the report to show that U.S. crude inventories fell by 2.5 million barrels last week, and stockpiles of refined products such as a gasoline also fell. The American Petroleum Institute, an industry group, said late Tuesday that its data for that week showed a 5.1-million-barrel decrease in crude supplies, a 3.6-million-barrel increase in gasoline stocks and a 2.9-million-barrel decrease in distillate inventories, according to market participants. The surprisingly large drawdown in crude supplies reported by API pushed Nymex crude prices in after-hours trading above $49 a barrel for the first time since October. Gasoline futures settled up 0.88 cent, or 0.5%, the highest settlement since August. Diesel futures rose 1.12 cents, or 0.8%, to $1.4887 a gallon. Jenny W. Hsu and Miriam Malek contributed to this article Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Crude oil prices; Inventory; Futures; Pipelines
Location: United States--US
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: United Nations--UN; NAICS: 928120; Name: New York Mercantile Exchange; NAICS: 523210; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790594062
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790594062?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Kansas City Southern Expects Rough 2016 for Rail Industry; Railroads suffering whiplash as refiners switch back and forth on oil suppliers
Author: Stevens, Laura
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract:
[...]an enormous amount has been invested in facilities to transport crude-by-rail in Canada, North Dakota, Texas and the receiving terminals along the U.S. Gulf Coast, an area Kansas City Southern serves, Mr. Ottensmeyer says.
Full text: Shipping crude oil is going to become an increasingly unpredictable business for railroads, as refiners have now demonstrated they will turn to the cheapest source for oil--no matter its location. "And when prices and spreads--more importantly spreads--are wide enough to support moving crude by rail, they will want to have those options," Patrick J. Ottensmeyer, incoming chief executive at Kansas City Southern, said in an interview. Crude-by-rail helped fuel a boom in the rail industry through 2014, as U.S. domestic producers drilled more wells in areas with few pipelines to carry it to market. As a result, an enormous amount has been invested in facilities to transport crude-by-rail in Canada, North Dakota, Texas and the receiving terminals along the U.S. Gulf Coast, an area Kansas City Southern serves, Mr. Ottensmeyer says. But since then, volumes have plummeted along with the price of oil. In the first quarter, crude-by-rail shipments fell 44% compared with the same quarter a year ago, according to the Association of American Railroads. The willingness of refiners to switch back and forth from international to domestic sources "is going to introduce more volatility than some of our other businesses have," Mr. Ottensmeyer said. Canadian Pacific Railway Ltd. CEO Hunter Harrison in April declared the long-term prospects for crude-by-rail "virtually over," but said it would come back to some degree. Mr. Ottensmeyer said that low energy prices are expected to provide growth in other areas along the Gulf Coast, however. The plummeting price of natural gas is resulting in new plastics plants and other facilities to tap that resource, he said. In addition, autos and other imports out of Mexico are expected to increasingly become a growth engine. A number of car companies are building out capacity in Mexico, and Kansas City Southern is the only major U.S. freight railroad with a network into that country. Some of that production will come online and help offset weaker volumes in industries like coal. "We feel like next year could be a turning point. This year is going to be a scramble," he said. "Everything seems to be stagnant to slow right now." Mr. Ottensmeyer will succeed current Chief Executive David L. Starling on July 1. Write to Laura Stevens at laura.stevens@wsj.com Credit: By Laura Stevens
Subject: Railroad transportation
Location: Texas Canada North Dakota
Company / organization: Name: Kansas City Southern; NAICS: 482111; Name: Canadian Pacific Railway Ltd; NAICS: 485112, 487110; Name: Association of American Railroads; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790619829
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
OPEC's Ability to Ease An Oil Supply Shock is Now Fading; Spare production capacity set to hit 8-year low, creating an unexpected risk as supply outages eat into the glut
Author: Williams, Selina; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract:
The cartel's ability to boost output rests mainly with its biggest producer, Saudi Arabia, which has historically held nearly all of the group's spare capacity . Since oil prices began falling in 2014, the Saudi state oil company has cut investments in new production. Chinese demand slowed, oil inventories built up, and in 2014 the price of oil began a long slide. [...]a few months ago, with prices below $30 a barrel and global oil inventories at a historic high, the notion that the world might not have sufficient oil production seemed far-fetched.
Full text: OPEC's ability to ease the pain of an oil-supply shock is slipping. For half a century, the Organization of the Petroleum Exporting Countries has buffered global crude markets, curtailing production to ease oil gluts and boosting output to prevent shortages. Now, as it heads into a June 2 meeting to discuss how to stabilize world oil markets, the cartel has neither the political consensus to cut output nor the technical capability to significantly raise production. Since last year, OPEC members haven't been able to agree on supply cuts to stem a glut that drove prices down by more than 50% since 2014. Instead they kept pumping full blast. The result: With recent supply outages sending the oil price back up, the cartel has little flexibility to boost production. This year, OPEC's spare pumping capacity--the amount it can bring online within 30 days and sustain for at least 90--will be at its lowest level since 2008, the U.S. Energy Information Administration estimates. It said OPEC spare capacity will decline more than 22% in the current quarter compared with the previous quarter. OPEC hasn't been forced to tap its spare capacity to handle recent outages because oil was stored at record levels when prices were low, creating a cushion against supply shocks. As those stocks are drained and non-OPEC production falls, OPEC could struggle to meet demand. By the third quarter of this year, the EIA said OPEC spare capacity will fall to 1.25 million barrels a day--a level not seen since 2008, when oil prices peaked at $147 a barrel on tight supply and surging Chinese demand. The cartel's ability to boost output rests mainly with its biggest producer, Saudi Arabia, which has historically held nearly all of the group's spare capacity . Since oil prices began falling in 2014, the Saudi state oil company has cut investments in new production. New production it brought onstream has mostly offset natural declines in other fields, rather than adding much new capacity. Saudi officials have long said they can boost production by about 2 million barrels a day over today's record daily production of 10.2 million barrels. But that 2 million barrels might not be possible in short order, a Saudi oil industry official said. "If there was a big crisis tomorrow, then the maximum Saudi Arabia can do would be around 500,000, maybe 700,000 maximum," the official said. State-controlled Saudi Arabian Oil Co, or Saudi Aramco, and the Saudi Energy Ministry didn't respond to requests for comment. Last month, Aramco Chief Executive Amin Nasser said the company plans to raise production even closer to its maximum capacity to power air conditioning during Saudi Arabia's hot summer. OPEC's spare capacity is slipping at a time when supply disruptions in non-OPEC countries such as Canada and Colombia, as well as in violence-plagued OPEC member Nigeria, removed more than 3 million barrels a day from global oil markets this month. OPEC's ability to quickly boost supplies hasn't been an issue for global markets since 2008. Back then, surging demand from China and tight world-wide supplies drove crude prices up. Saudi Arabia boosted output, but with a counterintuitive effect: Instead of dropping, oil prices went up to $147 a barrel, triple 2007 levels. Analysts and traders said the spike was partly due to concerns about shrinking Saudi spare capacity, which fell to about 1 million barrels a day in 2008. Prices fell with the global financial crisis, and the U.S. shale boom brought huge amounts of new production online. Chinese demand slowed, oil inventories built up, and in 2014 the price of oil began a long slide. Until a few months ago, with prices below $30 a barrel and global oil inventories at a historic high, the notion that the world might not have sufficient oil production seemed far-fetched. But a convergence of unrelated circumstances in Africa, the Middle East and North America tightened supplies. In Libya, a political crisis curtailed shipments. Oil thieves and saboteurs attacked Nigerian pipelines and wells. Workers went on strike in Kuwait and Canada's oil-sands region went up in flames. Now, the oil price is heading toward $50 a barrel and analysts say the supply disruptions may persist. "Because it's not down to a single outage, it's harder to see when they could be resolved," said Richard Mallinson of London-based consultancy Energy Aspects. Canadian oil sands fires and Nigeria disruptions could cut into oil stockpiles that accumulated in North America in recent years. Elsewhere, stocks are growing slower than they have since the fourth quarter of 2014. "Inventories may seem high now but if we get an outage somewhere of 1 million barrels a day for a period of three months, that's 90 million barrels gone," said Yasser Elguindi, an oil analyst at U.S.-based consultancy Medley Global Advisers. Worldwide, there is little spare capacity beyond Saudi Arabia. Many of the world's producers are pumping as much as they can to offset lower revenue from weaker oil prices. Only the U.S.--with its onshore oil fields that are faster to drill than offshore reservoirs--has significant room to increase pumping. But the ability of U.S. shale producers to quickly ramp up output has never been tested, and the small U.S. companies that pump shale oil may need a higher oil price than other producers to make new wells worthwhile. That leaves Saudi Arabia, with its cheap-to-pump reserves, as the most viable source of new production. Reaching the output of 12 million barrels a day that Saudi officials have said the country is capable of could require time-consuming drilling and development, analysts say. "If Saudi has more than 10.5 million barrels a day of capacity, why have they never produced it?" said Raymond James analyst Pavel Molchanov. Write to Selina Williams at selina.williams@wsj.com and Summer Said at summer.said@wsj.com Credit: Selina Williams, Summer Said
Subject: Cartels; Crude oil prices; Inventory; Petroleum production
Location: United States--US Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790632810
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Canada's Banks Continue to Face Oil-Price Fallout; Analysts expect lenders to report more soured loans for energy companies and consumers in oil-producing regions
Author: Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract: None available.
Full text: Canada's biggest banks begin reporting their fiscal second-quarter earnings this week and lower oil prices are expected to pressure results. Although oil prices have gained some traction since February, analysts are expecting lenders to report more soured loans for both energy companies and consumers in oil-producing regions. Canada's economy, largely dependent on natural resources, has been hard hit by the commodity-price collapse. "The ripple effects from low oil prices have yet to fully play out," said John Aiken of Barclays Capital Inc. in a research note. In particular, lower oil prices are expected to translate into higher unemployment, creating more financial stress for consumers. "While oil prices have recovered from extreme lows, Canadian companies have noted that even if prices remain around current levels, there will be significant further cuts," he added. Bank of Montreal will kick off bank-reporting season on Wednesday, followed by Canadian Imperial Bank of Commerce, Royal Bank of Canada and Toronto-Dominion Bank on Thursday. Bank of Nova Scotia will close out earnings season on May 31. EARNINGS FORECASTS: Analysts expect most of the big five banks to report single-digit percentage profit increases for the quarter ended April 30. The exception is Scotiabank, which is expected to post flat year-over-year results. Analysts polled by Thomson Reuters are expecting the following earnings-per-share results for each of the banks, which are listed below from largest to smallest based on total assets. * RBC expected to report C$1.64 versus C$1.63 a year ago. Reports on Thursday. * TD expected to report C$1.16 versus C$1.14 a year ago. Reports on Thursday. * Scotiabank expected to report C$1.42 versus C$1.43 Reports on May 31. * BMO expected to report C$1.75 versus C$1.71 a year ago. Reports on Wednesday. * CIBC expected to report C$2.31 versus C$2.28 a year ago. Reports on Thursday. WHAT TO WATCH FOR: --CREDIT QUALITY: Canada's banks are expected to report higher provisions for credit losses, or the amount of money they set aside for bad loans. Lenders could also increase their collective allowances, which are contingency funds for potential future loan losses. Canada's banking regulator has urged major lenders to review their accounting practices to ensure they have sufficient reserves, The Wall Street Journal reported in March. --OIL EXPOSURE: In recent months, analysts have pushed banks for more disclosure on energy loans, and any covenant relief being provided to distressed corporate borrowers. Scotiabank, Canada's third-largest bank by assets, has the biggest direct exposure of the country's banks at 3.6%of total loans. --NET INTEREST MARGINS: Persistently low interest rates will continue to weigh on net interest margins, or the difference between the money banks make on charging interest and their own borrowing costs. --RESTRUCTURING CHARGES: Cost controls will be a focus again this quarter. Scotiabank has already said it would record a restructuring charge of about C$275 million for the February-to-April quarter. But gleaning cost savings remain an issue for all banks due to slowing growth in their domestic operations. --DIVIDEND WATCH: Both BMO and CIBC are expected to raise their quarterly payouts, according to some analysts. Credit: By Rita Trichur
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790647394
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Auto, Mortgage Delinquencies Climb in Energy Regions; New York Fed credit report finds evidence of 'real hardship' in oil counties
Author: Zumbrun, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract:
Delinquencies on auto loans have spiked in the U.S. counties that had the highest employment in the oil-and-gas industry, according to the Federal Reserve Bank of New York's quarterly report on household debt and credit.
Full text: The year-and-a-half-long spell of low oil prices is making it hard for households to pay the bills in energy-producing regions, an ominous localized trend that comes as the rest of the country returns to pre-recession levels of health. Delinquencies on auto loans have spiked in the U.S. counties that had the highest employment in the oil-and-gas industry, according to the Federal Reserve Bank of New York's quarterly report on household debt and credit. Mortgage delinquencies have also climbed, though not as dramatically. Tuesday's report underscores that although the decline in oil prices has saved many Americans money at the pump, it has caused significant economic fallout for those who were working in the energy industry during the boom. So far, the increase in delinquencies and deterioration of credit appears to be concentrated only within energy regions of the country. "These energy counties are 1.7% of total employment, which is small in the national picture," said Andrew Haughwout, a New York Fed economist who co-wrote the research. "But this report is evidence of real hardship in these counties." Earlier * Laid-Off Workers Struggle to Pay Off Debt (April 26) The national picture remains one of gradual credit improvement. Overall credit increased by $136 billion, to $12.25 trillion, in the first quarter of 2016, driven by an increase of $120 billion in mortgage debt. The amount of debt remains much lower than the peak in 2008, when the housing crisis and recession racked household balance sheets. Delinquency rates declined nationally--the share of people more than 90 days behind on their mortgage fell to the lowest since 2007. The share of all household debt that is delinquent declined to 3.6% in the first quarter, also the lowest since 2007. The amount of student loans rose by $29 billion, to $1.26 trillion. The delinquency rate on student loans improved slightly in the first quarter, but remains far higher than all other types of debt. About 11% of student-loan balances are delinquent, compared to 3.6% for loan balances overall and just 2.1% of mortgages. The figures do not include student loan balances that are in grace periods and forbearance, and the New York Fed says student loan delinquencies may be about twice as high for loans that are actually in repayment. The New York Fed's report is drawn from a random sample of Equifax credit reports and provides a snapshot of U.S. consumer debt--showing a comprehensive picture of how much Americans have borrowed, and whether they're on top of their payments. As a supplement to this quarter's report , the New York Fed took stock of the fallout from the decline in oil prices, by comparing oil counties to the rest of the country. It defined oil counties as those in which at least 6% of employees worked in the oil and gas industry at the end of 2014--about 10% of all counties. Throughout the 2007-09 recession and until 2014, energy counties had been a source of strength in the national credit picture. Residents of such counties had somewhat lower rates of delinquency on auto loans and much lower delinquencies on mortgages. That reflected both the better jobs picture in energy regions and the fact that home prices didn't go through as large a boom and bust as in other regions. In the past year and a half, this pattern has reversed. Auto delinquencies have held steady at about 3% nationally. In oil counties they have climbed to about 5%. That's roughly equivalent to the auto-delinquency rate in the immediate aftermath of the recession. Similarly, mortgage-delinquency rates in oil counties have climbed slightly over the past year, while they have continued to decline in the rest of the country. Employment in mining and logging, the broad category that includes much oil-and-gas activity, has declined from over 900,000 in late 2014 to about 700,000 last month, a decline of over 20%. This appears too small to drag down the entire U.S. economy, which has about 144 million payroll employees. But the fallout in the 10% of counties that relied heavily on energy could be significant. The credit delinquencies could disproportionately affect community banks in those regions of the country, and local businesses will likely see fewer customers. "There's pockets of recession out there and oil and gas is definitely causing one of them," said Jason Schenker, president of Austin, Texas-based Prestige Economics. The rise in delinquencies, though concentrated in oil regions for now, could spread to auto lending more generally, he said, potentially harming the health of both auto manufacturers and financial institutions that provide the loans. "Autos could be vulnerable. Finance could be vulnerable, too," Mr. Schenker said. Write to Josh Zumbrun at Josh.Zumbrun@wsj.com Credit: By Josh Zumbrun
Subject: Student loans; Credit unions; Mortgages; Recessions; Energy industry; Gas industry; Housing prices
Location: United States--US
Company / organization: Name: Federal Reserve Bank of New York; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790722985
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017- 11-22
Database: The Wall Street Journal
Denham Backs Oil-and-Gas Team for Second Time With $300M; New venture follows asset sales by predecessor entity in 2014 and 2015
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract:
Denham Capital Management LP is backing the same oil-and-gas executive team to form Tall City Exploration II LLC with $300 million in equity commitment.
Full text: Denham Capital Management LP is backing the same oil-and-gas executive team to form Tall City Exploration II LLC with $300 million in equity commitment. Midland, Texas-based Tall City II is being led by Chief Executive Michael Oestmann, the same person who had formed and led the predecessor entity, Tall City Exploration LLC. Denham said the new company will have a "broader remit" than its predecessor, which focused on the Midland basin within the larger Permian basin. Tall City II will seek to acquire, explore and develop oil and gas assets throughout the entire Permian basin, Denham said in a news release. The first Tall City venture was formed in 2012 with $300 million commitment from Denham. The venture, however, didn't draw down the entirety of the commitment, WSJ Pro Private Equity reported in November. Tall City then sold assets in 2014 and 2015, returning more than $1.2 billion, or about 3.5 times Denham's equity investment. Credit: By Shasha Dai
Subject: Executives; Equity; Oil wells
Company / organization: Name: Denham Capital Management LP; NAICS: 523910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790730951
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Bank of Canada Expected to Hold Key Rate, Sound More Cautious Tone; Economic impact of planned government stimulus, wildfires in oil-rich Alberta remain questions
Author: Kim Mackrael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract:
OTTAWA--Canada's central bank is widely expected to keep its key interest rate unchanged this week, but could sound a more cautious note following a string of weak economic-data releases and wildfires that curbed Alberta's energy production.
Full text: OTTAWA--Canada's central bank is widely expected to keep its key interest rate unchanged this week, but could sound a more cautious note following a string of weak economic-data releases and wildfires that curbed Alberta's energy production. All 11 primary dealers of Canadian government securities surveyed by The Wall Street Journal predicted the Bank of Canada would maintain its current rate at 0.5% during a scheduled announcement on Wednesday. "There's obviously no reason to think about raising rates anytime soon," CIBC Capital Markets chief economist Avery Shenfeld said, noting that stronger growth at the start of the year began to fade in March. At the same time, "a rate cut doesn't look needed given that the currency has backed off its earlier strong point," Mr. Shenfeld said. A rally in the value of the Canadian dollar earlier this year had some economists concerned about the outlook for Canada's nonresource exports, which tend to be in greater demand when the currency is weak. The Bank of Canada sees nonresource exports leading Canada's economic growth in the future as the size of the energy sector declines. A majority of economists surveyed said they expected the key rate to remain unchanged until at least 2017 or 2018, when they said the central bank would likely begin to raise rates. The Bank of Canada cut interest rates twice last year to address the sharp drop in global oil prices, which has weighed on Canada's resource-reliant economy. The central bank held its key rate at 0.5% during is policy decision last month, saying the economy is still facing negative headwinds but should receive support from planned stimulus spending by the federal government. Since that time, however, wildfires in oil-rich Alberta forced the evacuation of several communities and prompted energy companies to close or slow down production. TD Securities economist Andrew Kelvin said it is too early to know the true economic impact of the fires, which will weigh on Canada's second-quarter growth, but the outlook for the second half of the year looks better. "We should see a bit of a rebound coming out of some of the rebuild efforts that will follow the Alberta wildfires," he said. David Watt, chief economist at HSBC Bank Canada, said he remains concerned about the underlying momentum of the economy, even with the government's planned fiscal stimulus, and anticipates another rate cut in the fourth quarter of the year. "Our concerns center on the view that the sectors of the economy expected to react positively to a weaker Canadian dollar and strong U.S. demand have shown little sustained momentum," Mr. Watt said in a research note. Write to Kim Mackrael at kim.mackrael@wsj.com Credit: By Kim Mackrael
Subject: Canadian dollar; Central banks; Energy industry
Location: Canada
Company / organization: Name: HSBC Bank Canada; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790750478
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790750478?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Analysts Forecast 2.5M-Barrel Fall in Oil Inventories
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract:
The American Institute, an industry group, said late Tuesday that its own data for that week showed a 5.1-million-barrel decrease in crude supplies, a 3.6-million-barrel increase in gasoline stocks and a 2.9-million-barrel decrease in distillate inventories, according to market participants.
Full text: NEW YORK--U.S. crude-oil stocks are expected to decrease in data due Wednesday from the Department of Energy, according to a survey of analysts by The Wall Street Journal. Estimates from 12 analysts surveyed showed that U.S. oil inventories are projected to have fallen by 2.5 million barrels, on average, in the week ended May 20. All 12 analysts expect stockpiles to fall. Forecasts range from a decline of 5 million barrels to an decrease of 500,000 barrels. The closely watched survey from the Energy Information Administration is due at 10:30 a.m. ET Wednesday. Gasoline stockpiles are expected to fall by 1.1 million barrels, according to analysts. Nine analysts expect a drop, two see a rise and one expects no change. Estimates range from a drop of 3 million barrels to an increase of 1 million barrels. Stocks of distillates, which include heating oil and diesel, are expected to fall by 800,000 barrels. Nine analysts expect a decline, and three see an increase. Forecasts range from a drop of 3 million barrels to a gain of 1.5 million barrels. Refinery use is seen rising 0.6 percentage point to 91.1% of capacity, based on EIA data. Nine analysts expect an increase, while one sees no change and two didn't provide estimates. Forecasts range from unchanged to a gain of 1.0 point. The American Institute, an industry group, said late Tuesday that its own data for that week showed a 5.1-million-barrel decrease in crude supplies, a 3.6-million-barrel increase in gasoline stocks and a 2.9-million-barrel decrease in distillate inventories, according to market participants. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Inventory; Price increases; Supply & demand
Location: United States--US
Company / organization: Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790789235
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canada's Alberta Province Details New Carbon Tax on Fuel Consumption; Move part of broader policy to phase out coal-fired plants and cap emissions from oil sands production
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract:
CALGARY, Alberta--The government of oil-rich Alberta province introduced legislation Tuesday to implement an economywide carbon tax starting next year, aimed at curbing greenhouse gas emissions and remaking its image as a champion of the fossil fuels industry.
Full text: CALGARY, Alberta--The government of oil-rich Alberta province introduced legislation Tuesday to implement an economywide carbon tax starting next year, aimed at curbing greenhouse gas emissions and remaking its image as a champion of the fossil fuels industry. The move is part of a broader environmental policy package expected to phase out coal-fired plants in the province and cap emissions from oil sands production. Details of those efforts, which were announced in November, have yet to be released. Coal mine operators and some oil sands producers have criticized those plans as a competitive burden compared with other jurisdictions. Alberta's new carbon tax targets all fossil fuel consumption, including gasoline sales and natural gas for home heating. The government will levy a tax of 20 Canadian dollars ($15.22) per metric ton from next January, which will then be increased to C$30 a ton from January 1, 2018. The initiative comes as part of a shift engineered by the left-leaning government of Premier Rachel Notley after decades of rule by a right-of-center party, which had sought to limit the impact on fossil fuel consumers and producers in Alberta. "We are making a fundamental choice about the future of our province. For too long, governments in Alberta choose to ignore and deny the problem" of climate change, Alberta's environment minister, Shannon Philips, said at a news conference in Edmonton. Two major oil sands producers, Cenovus Energy Inc. and Suncor Energy Inc., welcomed the move to position the province, which has long been closely associated with fossil fuel production, as a leader in environmental stewardship. These and other oil sands producers support efforts to mandate emissions reductions to help win public backing for new pipelines to carry their crude oil to market. "We fully support Alberta taking a leadership role in addressing climate change and we believe one of the best ways to do that is through an economywide carbon levy," Cenovus CEO Brian Ferguson said in a statement. Canadian Prime Minister Justin Trudeau has pushed for nationwide carbon pricing, but pledged to defer to the country's provincial and territorial leaders on specific policies. By 2030, Canada has committed to cut such emissions by 30% from 2005 levels. Rebates to lower income households in Alberta will offset most of the direct tax costs, but not the indirect impact of higher costs passed through by retailers, according to estimates by provincial government officials. Alberta will create a new agency to oversee implementation of the new environmental policies, Ms. Phillips said. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Emissions; Fossil fuels; Oil sands; Carbon; Environmental policy; Environmental tax; Environmental stewardship
People: Trudeau, Justin Notley, Rachel
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Cenovus Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790818293
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790818293?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Chevron Boss: Climate Change Could Help Business; CEO John Watson's stance sets him apart from oil counterparts amid pressure from environmentalists, investors
Author: Olson, Bradley; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 May 2016: n/a.
Abstract: None available.
Full text: SAN RAMON, Calif.--Chevron Corp. Chief Executive John Watson has a blunt message for investors, climate activists and anyone else listening: Fossil fuels aren't going away. But this stance increasingly sets him apart from his oil counterparts as they react to pressure from climate-change activists and concerned shareholders. On Wednesday, Chevron, like Exxon Mobil Corp., is facing a shareholder-proposal campaign by activists who want the company to detail the risk climate change poses to its business. Exxon is opposed to the proposal , and so is Mr. Watson: He questions its entire premise, arguing that climate change might even prove positive for Chevron, if it spurs more of the planet to shift from coal to natural gas. "I hope to gain market share in some areas," he said. Where many other oil and gas executives are retreating at least in rhetoric, emphasizing common ground with environmentalists, Mr. Watson, who became CEO in 2010 after climbing the company's ranks for three decades, has doubled down. Some of Chevron's biggest rivals, including Royal Dutch Shell PLC, Exxon, and BP PLC, have embraced some form of a price on carbon--a system that generally taxes polluters, which then pass the costs onto consumers and can lower demand. Several companies have also made new forays into renewable energy or emission-reduction technology. Shell's CEO on Tuesday aligned himself with those pressing for a major response to climate change during the company's annual meeting in The Hague. "We believe absolutely that climate change is real. Not all oil companies do that," Shell CEO Ben van Beurden told investors, warning that global climate goals are only achievable if governments implement "unprecedented policy change." Mr. Watson, 59 years old, isn't a climate-change skeptic. But the staunch disciple of free markets believes that only a major technological breakthrough, rather than a top-down solution from government, will substantially curb climate change. While nearly 200 countries agreed to reduce greenhouse-gas emissions in Paris last year , Mr. Watson doubts they will achieve their goals. "You can sign agreements in Paris, that's a good step," he said. "But when you sign agreements and create the impression that it's going to be implemented when no one's identified the trillions of dollars that it's going to cost, it's just not clear that's going to deliver." Shell, BP and ConocoPhillips have welcomed the idea of making additional disclosures about the risk climate change poses to their business, and last year shareholders at the companies overwhelmingly approved "climate stress test" measures. The companies have released additional information, such as their outlook for how much global oil demand will fall if the Paris goals are met. But it has fallen short of what some investor groups want: a detailed discussion of how specific company assets may decline in value if more stringent policies are adopted to reduce global emissions. Chevron is resisting such proposals, but notes that it already considers a potential price on carbon when planning projects. Still, some industry insiders fear that Mr. Watson's unabashed opposition to the idea that climate change could represent systemic challenges to the industry could backfire. "I'm worried about Chevron and Exxon's intransigence around this issue and seeming reluctance to talk about it," said Tom Nelson, head of commodities and resources at Investec Asset Management, which holds stocks in both companies. "The Americans risk alienating parts of the investment community." Exxon hasn't exactly embraced the Paris talks either, and its annual energy outlook is in sync with Mr. Watson's view that the use of fossil fuels will grow for decades. But the company has increasingly noted that it supports a carbon tax, and it announced earlier this month a research effort to reduce emissions from natural gas-fired power plants. Close associates of Chevron's Mr. Watson say his free-market views were solidified at the University of Chicago, where he obtained a master's degree in business administration in 1980. The university served as the intellectual home of the late economist Milton Friedman, a formidable proponent of uninhibited market forces. Mr. Watson has been known to cite Mr. Friedman's views in conversation. Mr. Watson argues his public positions represent realism. Almost every aspect of modern life depends on the use of fossil fuels, he says. Many Americans live "paycheck to paycheck" and don't want to spend more on energy, he adds, and developing nations care more about cheap energy and local pollution than climate change. Often, Mr. Watson points to Bill Gates, who has said "an energy miracle"--so far undiscovered--would be needed to reduce emissions enough to stave off negative impacts from climate change. The central debate facing the biggest oil companies is whether a transition to newer, cleaner forms of energy will come in the next 30 years or in the next 100, said Amy Myers Jaffe, executive director of energy and sustainability at the University of California, Davis. While many agree with Mr. Watson, who is in the 100-year-camp, companies betting on that run a risk of being wrong, she said. "There are some real uncertainties out there related to how quickly governments will embrace new energy policies and technologies," she said. "But those policies and technologies are real. Companies need to face this square on." Write to Bradley Olson at Bradley.Olson@wsj.com and Sarah Kent at sarah.kent@wsj.com Credit: By Bradley Olson and Sarah Kent
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 24, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790821583
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790821583?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Prices Highest in More Than Seven Months; Brent crude rose $0.58 to $49.19 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its data for that week showed a 5.1-million-barrel decrease in crude supplies, a 3.6-million-barrel increase in gasoline stocks and a 2.9-million-barrel decrease in distillate inventories, according to market participants.
Full text: Crude oil prices marched toward $50 in early Asian trade Wednesday as investors anticipate a likely decrease in the U.S. crude inventories and ongoing supply outages elsewhere in the world, which could curtail global supply. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $49.27 a barrel at 0150 GMT, up $0.65 in the Globex electronic session, the highest intraday level since mid-October when prices was last above $50. July Brent crude on London's ICE Futures exchange rose $0.58 to $49.19 a barrel. U.S. oil prices have surged more than 85% from their mid-February lows on expectations that the global crude glut that sent prices plunging in mid-2014 is set to shrink. Production has started to fall in some regions including the U.S. due to spending cuts, and unexpected outages in other countries are keeping additional barrels off the market. "The U.S. government data are expected to show that oil inventories have retreated from an eight-decade high, putting further upward pressure on prices," said ANZ Research. A survey by The Wall Street Journal estimates U.S. crude stockplies to have decreased by 2.5 million barrels in the week ended May 20. Stockpiles of refined products such as gasoline also fell. The American Petroleum Institute, an industry group, said late Tuesday that its data for that week showed a 5.1-million-barrel decrease in crude supplies, a 3.6-million-barrel increase in gasoline stocks and a 2.9-million-barrel decrease in distillate inventories, according to market participants. Official data on production and stockpiles will be released by the Energy Information Administration later Wednesday. Ongoing supply disruptions in Canada, Nigeria, and Libya is also helping to support the upward momentum. Citigroup Inc. expects Brent crude to reach $50 a barrel in the third quarter. However, some analysts said the supply disruptions are likely to be temporary and the real worry is the increasing output from producers within the Organization of the Petroleum Exporting Countries. Iraqi media reported on Tuesday that its output had reached 4.5 million barrels a day. Iran has also reiterated it has no plans to slash output at the moment. Without Iran's pledge to adjust production, Saudi Arabia is set to keep production at the current rate, if not higher. "There may be some OPEC members pumping less to offset some of these gains, but we think odds favor an overall increase," said Tim Evans, a Citi Futures analyst. Other analysts said the rise is prices is a possible result of asset reallocation as commodities were undervalued in recent months. "The oversupply in the oil markets is very solid. The imbalance has started to shift but still nowhere near a real tightening to the point of a shortage," said Aaron Lynch, a market analyst at OptionsXpress. Nicole Friedman contributed to this story. Credit: By Jenny Hsu
Subject: Crude oil prices; Inventory; Futures
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Citigroup Inc; NAICS: 551111; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790836093
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790836093?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Asia Shares Rise on Oil Price Gains; Strong U.S. housing data help fuel upbeat tone about prospect for Fed rate increase
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract: None available.
Full text: Stock markets in Asia rallied sharply Wednesday, jolted from weeks of torpor as oil prices advanced to their highest levels in more than seven months and investors shook off worries about higher U.S. interest rates. The Hang Seng Index finished up 2.7%, its biggest gain in over a month, leading rallies in other major share markets. Japan's Nikkei Stock Average finished up 1.6%, Australia's S&P ASX 200 was up 1.5% and South Korea's Kospi gained 1.2%. The Shanghai Composite Index slipped 0.2%, as China's central bank guided the yuan to its weakest level against the U.S. dollar in more than five years. In the past, a weakening of the currency by The People's Bank of China has been a sign of greater concern about the economy, but such moves also track the dollar, which strengthened to its highest levels in two months amid rising expectations of higher interest rates in the U.S. Broadly, crude-oil prices, which rose overnight and continued to tack on gains in the Asia trading day, drove up resources companies and fueled strong gains in the sector across most of the region. In Hong Kong, PetroChina Co. surged 3.9% and the Hang Seng sub index of energy shares was up 3.7%. Analysts are watching for a possible break above $50 a barrel for oil, a sticky barrier that global prices have failed to breach despite a recent rally amid continued worries about a global glut. Also underpinning Asia's gains was robust U.S. housing data Tuesday , indicating a strengthening domestic economy. Sales of new homes in the U.S. rose at the fastest pace in more than eight years in April, helping drive the S&P 500 to finish up 1.4%, its biggest gain in more than two months. The data added to rising expectations that the U.S. Fed could proceed with an interest rate rise as soon as June, but traders seem to have come to terms with that. "Now the market is comfortable with the idea of U.S. interest rates [rising], markets are following the lead from last night's U.S. session and rallying," said Alex Furber, a Singapore-based trader at CMC Markets brokerage. He added that Hong Kong in particular offered good value after earlier selling off, helping propel its bounce Wednesday. "[The Hang Seng Index] was trading above 21,500 at the end of April before being sold down this month," said Mr. Furber. The benchmark closed at 20368.05 on Wednesday. The MSCI Asia Pacific benchmark of stocks has slumped nearly 5% from late April to its close Tuesday, as a rising U.S. dollar pressures prices for many commodities and emerging-market assets. In Hong Kong, daily trading volumes have fallen to their lowest levels this year on uncertainties over the pace of U.S. rate increases. In Japan, Sony Corp. rose 6.5% to ¥3,072, the best performer among companies with market capitalization of $10 billion or above, despite the company's forecast Tuesday that its core image sensor business would record a deeper loss this fiscal year. Sony said it would stop making high-end camera module components for external customers, which will likely remove uncertainties about the firm's business outlook, said Jefferies and Co. investment bank. With its gaming and music businesses remaining strong, Sony is on track to achieve a ¥500 billion ($4.54 billion) operating profit milestone in the next fiscal year, ending March 2018, analysts said. Takashi Mochizuki contributed to this article Write to Chao Deng at Chao.Deng@wsj.com Credit: By Chao Deng
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790852536
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790852536?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
U.S. News: Borrowers Pinched in Oil Regions
Author: Zumbrun, Josh
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 May 2016: A.2.
Abstract:
Delinquencies on auto loans have spiked in the U.S. counties that had the highest employment in the oil-and-gas industry, according to the Federal Reserve Bank of New York's quarterly report on household debt and credit.
Full text: The year-and-a-half-long spell of low oil prices is making it hard for households to pay the bills in energy-producing regions, an ominous localized trend that comes as the rest of the country returns to pre-recession levels of health. Delinquencies on auto loans have spiked in the U.S. counties that had the highest employment in the oil-and-gas industry, according to the Federal Reserve Bank of New York's quarterly report on household debt and credit. Mortgage delinquencies have also climbed, though not as dramatically. Tuesday's report underscores that although the decline in oil prices has saved many Americans money at the pump, it has caused significant economic fallout for those who were working in the energy industry during the boom. So far, the increase in delinquencies and deterioration of credit appears to be concentrated only within energy regions of the country. "These energy counties are 1.7% of total employment, which is small in the national picture," said Andrew Haughwout, a New York Fed economist who co-wrote the research. "But this report is evidence of real hardship in these counties." The national picture remains one of gradual credit improvement. Overall credit increased by $136 billion, to $12.25 trillion, in the first quarter of 2016, driven by an increase of $120 billion in mortgage debt. The amount of debt remains much lower than the peak in 2008, when the housing crisis and recession racked household balance sheets. Delinquency rates declined nationally -- the share of people more than 90 days behind on their mortgage fell to the lowest since 2007. The share of all household debt that is delinquent declined to 3.6% in the first quarter, also the lowest since 2007. The amount of student loans rose by $29 billion, to $1.26 trillion. The delinquency rate on student loans improved slightly in the first quarter, but remains far higher than all other types of debt. About 11% of student-loan balances are delinquent. The figures do not include student-loan balances that are in grace periods and forbearance. The New York Fed's report is drawn from a random sample of Equifax credit reports and provides a snapshot of U.S. consumer debt -- showing a comprehensive picture of how much Americans have borrowed, and whether they're on top of their payments. As a supplement to this quarter's report, the New York Fed took stock of the fallout from the decline in oil prices, by comparing oil counties to the rest of the country. It defined oil counties as those in which at least 6% of employees worked in the oil and gas industry at the end of 2014 -- about 10% of all counties. Throughout the 2007-09 recession and until 2014, energy counties had been a source of strength in the national credit picture. Residents of such counties had somewhat lower rates of delinquency on auto loans and much lower delinquencies on mortgages. That reflected both the better jobs picture in energy regions and the fact that home prices didn't go through as large a boom and bust as in other regions. In the past year and a half, this pattern has reversed. Auto delinquencies have held steady at about 3% nationally. In oil counties they have climbed to about 5%. Similarly, mortgage-delinquency rates in oil counties have climbed slightly over the past year, while they have declined in the rest of the country. Employment in mining and logging, the broad category that includes much oil-and-gas activity, has declined from over 900,000 in late 2014 to about 700,000 last month, a drop of over 20%. "There's pockets of recession out there and oil and gas is definitely causing one of them," said Jason Schenker, president of Austin, Texas-based Prestige Economics. The rise in delinquencies, though concentrated in oil regions for now, could spread to auto lending more generally, he said, potentially harming the health of both auto manufacturers and financial institutions that provide the loans. "Autos could be vulnerable. Finance could be vulnerable, too," Mr. Schenker said. Credit: By Josh Zumbrun
Subject: Energy industry; Crude oil prices; Economic impact; Delinquency
Location: United States--US
Company / organization: Name: Federal Reserve Bank of New York; NAICS: 521110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.2
Publication year: 2016
Publication date: May 25, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790877544
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790877544?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Jour nal
Stocks Extend Rally, Buoyed by Oil, Financial Shares; U.S. oil prices settle at highest level since October
Author: Vaishampayan, Saumya; Gold, Riva
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
"Any time you have the odds of a hike increasing so dramatically in such a short amount of time, there's going to be an intense move" in financial stocks, said R.J. Grant, associate director of equity trading at KBW Inc. Despite recent gains, many investors are skeptical that the stock market will produce big returns this year, in part as the global economy remains sluggish.
Full text: The S&P 500's financial sector rallied to its highest level of the year Wednesday, propelling the broader market for the second straight session. The Dow industrials and S&P 500 have risen more than 2% since last Thursday, as oil prices approach $50 a barrel and investors appear more comfortable with the prospect of higher interest rates as early as next month. The gains, which include the S&P 500's biggest advance in more than two months on Tuesday, have pushed the index near its highest close for the year. Today's Highlights * Banks Ramp Up Risk With Block Trades * Will Fannie and Freddie Need Another Bailout? * Trillions in Debt--But for Now, No Reason to Worry "People are realizing that rates going up is not a negative for the longer-term economy--it's a positive vote of confidence that things are going better than people hoped," said JJ Kinahan, chief strategist at TD Ameritrade. On Wednesday, the Dow Jones Industrial Average gained 145.46 points, or 0.8%, to 17851.51. The S&P 500 rose 14.48, or 0.7%, to 2090.54 and the Nasdaq Composite advanced 33.84, or 0.7%, to 4894.89. Energy shares notched some of the biggest gains in the S&P 500 as U.S. crude oil rose 1.9% to $49.56 a barrel. Shares in Transocean, which provides offshore contract drilling services for energy companies, rose 89 cents, or 9.7%, to $10.11. Chesapeake Energy shares rose 30 cents, or 7.4%, to 4.35. Shares of banks and other financial firms continued to advance, reflecting investors' heightened expectations for interest-rate increases this year. The S&P 500's financial sector rose 1% to reach a 2016 high, though the group remains down 0.5% for the year. The KBW Nasdaq Bank Index of large U.S. commercial lenders rose 1.9%. Fed-fund futures, which are used by investors and traders to place bets on central-bank policy, showed that the odds of a rate increase at the Fed's June meeting were 28% on Wednesday afternoon, according to CME Group. Those odds stood at 4% earlier this month. "Any time you have the odds of a hike increasing so dramatically in such a short amount of time, there's going to be an intense move" in financial stocks, said R.J. Grant, associate director of equity trading at KBW Inc. Despite recent gains, many investors are skeptical that the stock market will produce big returns this year, in part as the global economy remains sluggish. Greg Woodard, portfolio strategist at Manning & Napier, which manages $38.1 billion, said he looks for "companies that have some kind of growth driver that is not as linked to what the Federal Reserve is doing, what oil prices are doing, or what global growth is doing." He said that includes Google parent Alphabet and Facebook, both of which Mr. Woodard's firm has invested in. Alphabet Class A shares rose 5.07, or 0.7%, to 738.10, while shares in Facebook added 19 cents, or 0.2%, to 117.89. The Stoxx Europe 600 climbed 1.3% to its highest close since April 28. Eurozone finance ministers and the International Monetary Fund reached a deal early Wednesday that clears the way for fresh loans for Greece and prevents the country from defaulting on big debt redemptions in July. Analysts said the deal reduced the risk of a summer crisis, but fell short of a long-term solution for the country's debt problems. "We're going into a period of uncertainty," said Patrick George, global head of equities at HSBC. "Big investors are sitting on the sidelines, waiting," he said, adding that international investors have been shy about investing in Europe because of uncertainty over what shape it will have after June 23, when the U.K. holds a referendum on its membership in the European Union. The British pound gained 0.6% against the dollar to $1.4705. In Asia, Japan's Nikkei Stock Average added 1.6% and Hong Kong's Hang Seng Index gained 2.7%. Shares in Shanghai ended slightly lower, however, after China guided the yuan to its weakest level against the dollar in more than five years . Gold for May delivery slipped 0.4% to $1,223.50 an ounce. The yield on the 10-year Treasury note rose to 1.870% from 1.859% on Tuesday. In the Markets * Oil at Seven-Month High as U.S. Stockpiles Drop * Dollar Edges Lower as Traders Await Yellen Speech Friday * Gold Hits Seven-Week Low * U.S. Government Bonds Steady * Asia Shares Rise on Oil Gains Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com and Riva Gold at riva.gold@wsj.com Credit: By Saumya Vaishampayan and Riva Gold
Subject: Interest rates; Investments; Commercial credit; Energy industry
Location: United States--US
Company / organization: Name: Google Inc; NAICS: 519130; Name: TD Ameritrade Holding Corp; NAICS: 523120; Name: CME Group; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place ofpublication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790889240
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790889240?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Chevron-led Consortium to Invest Up to $37 Billion in Kazakh Oil Field; Investment would be one of the first big commitments by a large oil company since the oil price slump
Author: Clark, Simon; Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
ASTANA, Kazakhstan--Chevron Corp. and its partners agreed to invest up to another $37 billion to increase output at a Kazakhstan oil field that is among the world's most expensive, the country's energy minister said on Wednesday, a rare big spending commitment during a prolonged crude price slump.
Full text: ASTANA, Kazakhstan--Chevron Corp. and its partners agreed to invest up to another $37 billion to increase output at a Kazakhstan oil field that is among the world's most expensive, the country's energy minister said on Wednesday, a rare big spending commitment during a prolonged crude price slump. The investment in the oil field known as Tengiz would begin in 2017 and come on top of the about $37 billion already spent by Chevron, the field's operator, and its partners: state-owned energy firm, KazMunaiGas, Exxon Mobil Corp. and Russia's Lukoil. Chevron Chief Executive John Watson was recently in Kazakhstan and discussed the project with the nation's political leaders, said Kanat Bozumbayev, the country's energy minister, in an interview. The new investment is expected to produce 24,000 jobs in Kazakhstan, he said. "For us it's good news," Mr. Bozumbayev said. "This future growth project is very important for us." Chevron said the consortium would announce the final investment decision for Tengiz at an appropriate time, adding a "rigorous review of the future growth project is ongoing." The investment is among a handful of large outlays by major oil companies during a nearly two-year long slump in crude prices. Companies have been forced to delay or cancel about $270 billion in projects through March since oil prices began their long slide, according to consultants Rystad Energy, including expensive Arctic developments. Chevron has lowered its spending as its revenues and profits take a beating, including disclosing in 2014 a delay in its expansion plans for Tengiz. The company estimated its overall capital spending will range between $17 billion and $22 billion annually over the next two years--down from this year's between $25 billion and $28 billion budget. The project is vital for Kazakhstan, which depends on oil for about half its state revenue. The economy of the Central Asian state has suffered as oil prices have more than halved since a peak in mid-2014. The IMF forecast gross domestic product growth of just 0.1% this year compared with 6% in 2013 before oil prices started falling. Tengiz's output is currently about 500,000 barrels a day, and the expansion would boost its output to about 760,000 barrels a day by 2021. Overall, Kazakhstan pumps about 1.6 million barrels a day, which is forecast to decline without help from expanding Tengiz. The country's other huge oil project--Kashagan--has yet to start up after gas leaks in 2013 shut down the oil field while it was being commissioned. Mr. Bozumbayev said that the pipes and plant at Kashagan were being inspected and the field is due to start up in the fourth quarter of this year, maybe even as soon as October. That $50 billion project was due to start pumping in 2005 but it was shut down amid budget blowouts, engineering missteps and management disputes. Both Tengiz and Kashagan are among the most expensive oil projects in the world because of their size and the fact that their oil involves toxic gas that requires extra facilities to extract sulfur. They are in remote locations where infrastructure had to be built. When Chevron first signed a deal to develop Tengiz with the Kazakh government in 1993, it was unclear how the oil would be shipped from the region that borders Russia on one side and China on the other. For years, the companies involved in the Tengiz development trod a delicate path between competing interests in the region vying for control of export routes. By 2001, the companies claimed a victory when oil started to flow through a newly constructed pipeline link of over 900 miles from Kazakhstan through southern Russia to the Black Sea port of Novorossiisk. Jefferies senior oil equity analyst Jason Gammel said the expansion of Tengiz could give Chevron a competitive advantage over its rivals as it demonstrates a clear plan for oil production growth beyond 2019, something the other firms are mostly lacking. "Tengiz is material in terms of size and it's the most visible component of Chevron's growth beyond 2019," Mr. Gammel said. Write to Simon Clark at simon.clark@wsj.com and Selina Williams at selina.williams@wsj.com Credit: Simon Clark, Selina Williams
Subject: Oil fields; Prices; Capital expenditures
Location: Russia Kazakhstan
Company / organization: Name: KazMunaiGaz; NAICS: 213111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790889438
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790889438?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Hits Seven-Month High as U.S. Stockpiles, Output Fall; Larger-than-expected decline in U.S. crude inventories buoys prices, but demand also drops
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
The U.S. Energy Information Administration said U.S. crude stockpiles fell 4.2 million barrels last week, while analysts polled by The Wall Street Journal had expected a decrease of 2.5 million barrels.
Full text: Oil prices hit new 2016 highs on Wednesday, after the Energy Department reported continued declines in U.S. crude inventories and production last week. U.S. inventories are closely watched by traders as the first indicator of the global supply-and-demand balance. Stockpiles have fallen in recent weeks from their highest level in more than 80 years, boosting expectations that the global glut of crude that has weighed on prices for nearly two years is now receding. After robust production pushed the world into oversupply in mid-2014, companies have slashed spending on new drilling, and production is starting to decline in the U.S. and some other regions. In addition, unexpected production outages have cut global supplies further this month. U.S. oil prices have surged more than 85% from their mid-February lows on expectations of declining global supplies. "Crude oil prices flirt with $50, as supply disruptions stack up on top of accelerating declines in...oil production," said Citigroup Inc. in a note. The U.S. Energy Information Administration said U.S. crude stockpiles fell 4.2 million barrels last week, while analysts polled by The Wall Street Journal had expected a decrease of 2.5 million barrels. That news comes after the American Petroleum Institute said late on Tuesday that its data for last week showed a 5.1-million-barrel decrease in U.S. crude supplies. U.S. crude oil for July delivery settled up 94 cents, or 1.9%, at $49.56 a barrel on the New York Mercantile Exchange, the highest settlement since October. Brent crude, the global benchmark, rose $1.13, or 2.3%, to $49.74 a barrel on ICE Futures Europe, the highest level since November. U.S. output also fell for an 11th straight week to 8.8 million barrels a day from a peak of 9.7 million barrels a day in April 2015. More * Stockpiles Fell More Than Expected. Or Did They? * Oil Is the Odd Commodity Out. Is That Bad for Crude? "The trend of...lower-than-expected output is going to get us above $50" in the coming days," said Phil Flynn, analyst at the Price Futures Group. However, gasoline stockpiles unexpectedly rose last week as demand fell, the EIA data showed. Analysts are expecting strong demand for gasoline this summer, starting with the Memorial Day holiday next week, and lower-than-expected consumption could weigh on prices. "Demand just wasn't there," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Memorial Day, next Monday, is the traditional start to the busy summer-driving season. After that, "You should have consistent draws and if you don't, we're in big trouble," Mr. Yawger said. Gasoline futures settled down 1.28 cents, or 0.8%, at $1.6416 a gallon. Supply disruptions in Canada, Nigeria and Libya are also helping to support the upward price momentum. However, some analysts say the outages are likely to be temporary and many of those barrels will come back online soon. Diesel stockpiles fell more than expected. Diesel futures rose 2.4 cents, or 1.6%, to $1.5127 a gallon, the highest level since November. Georgi Kantchev contributed to this article Write to Nicole Friedman at nicole.friedman@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Nicole Friedman
Subject: Crude oil prices; Supply & demand; Crude oil; Inventory; Petroleum production; Memorial Day
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790896088
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790896088?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
OPEC Strains to Cover Outages --- Oil cartel's members run low on spare capacity, blunting their ability to steer output
Author: Williams, Selina; Said, Summer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 May 2016: C.1.
Abstract:
The cartel's ability to boost output rests mainly with its biggest producer, Saudi Arabia, which has historically held nearly all of the group's spare capacity. Since oil prices began falling in 2014, the Saudi state oil company has cut investment in new production. Chinese demand slowed, oil inventories built up, and in 2014 the price of oil began a long slide. [...]a few months ago, with prices below $30 a barrel and global oil inventories at a historic high, the notion that the world might not have sufficient oil production seemed far-fetched.
Full text: OPEC's ability to ease the pain of an oil-supply shock is slipping. For half a century, the Organization of the Petroleum Exporting Countries has buffered global crude markets, curtailing production to ease oil gluts and boosting output to prevent shortages. Now, as it heads into a June 2 meeting to discuss how to stabilize world oil markets, the cartel has neither the political consensus to cut output nor the technical capability to significantly raise production. Since last year, OPEC members haven't been able to agree on supply cuts to stem a glut that drove prices down by more than 50% since 2014. Instead they kept pumping full blast. Now, as recent supply outages send the price of oil back up, the cartel has little flexibility to boost production. This year, OPEC's spare pumping capacity -- the amount it can bring online within 30 days and sustain for at least 90 -- will be at its lowest level since 2008, the U.S. Energy Information Administration estimates. It said OPEC spare capacity will decline more than 22% this quarter from the previous quarter. OPEC hasn't had to tap spare capacity to handle outages because record amounts of oil have been stored, creating a cushion against supply shocks. As those stocks are drained and non-OPEC production falls, OPEC could struggle to meet demand. By the third quarter, the EIA said OPEC spare capacity will fall to 1.25 million barrels a day -- a level unseen since 2008, when oil prices peaked at $147 a barrel on tight supply and surging Chinese demand. The cartel's ability to boost output rests mainly with its biggest producer, Saudi Arabia, which has historically held nearly all of the group's spare capacity. Since oil prices began falling in 2014, the Saudi state oil company has cut investment in new production. Saudi officials have long said they can boost production by about 2 million barrels a day over today's record daily production of 10.2 million barrels. But that 2 million barrels might not be possible to achieve in the short term, a Saudi oil industry official said. "If there was a big crisis tomorrow, then the maximum Saudi Arabia can do would be around 500,000, maybe 700,000 maximum," the official said. State-controlled Saudi Arabian Oil Co., or Saudi Aramco, and the Saudi Energy Ministry didn't respond to requests for comment. Last month, Aramco Chief Executive Amin Nasser said the company plans to raise production even closer to its maximum capacity to power air conditioning during Saudi Arabia's hot summer. OPEC's spare capacity is slipping at a time when supply disruptions in non-OPEC countries such as Canada and Colombia, as well as in violence-plagued OPEC member Nigeria, removed more than 3 million barrels a day from global oil markets this month. OPEC's ability to quickly boost supplies hasn't been an issue for global markets since 2008. At that time, surging demand from China and tight world-wide supplies drove crude prices up. Saudi Arabia boosted output, but with a counterintuitive effect: Instead of dropping, oil prices went up to $147 a barrel, triple 2007 levels. Analysts and traders said the spike was partly due to concerns about shrinking Saudi spare capacity, which fell to about 1 million barrels a day in 2008. Prices fell with the global financial crisis, and the U.S. shale boom brought huge amounts of new production online. Chinese demand slowed, oil inventories built up, and in 2014 the price of oil began a long slide. Until a few months ago, with prices below $30 a barrel and global oil inventories at a historic high, the notion that the world might not have sufficient oil production seemed far-fetched. But a convergence of unrelated circumstances in Africa, the Middle East and North America tightened supplies. In Libya, a political crisis curtailed shipments. Oil thieves and saboteurs attacked Nigerian pipelines and wells. Workers went on strike in Kuwait and Canada's oil-sands region went up in flames. Now, oil is heading toward $50 a barrel and analysts say the supply disruptions may persist. "Because it's not down to a single outage, it's harder to see when they could be resolved," said Richard Mallinson of London-based consultancy Energy Aspects. Canadian oil-sands fires and Nigeria disruptions could cut into oil stockpiles that accumulated in North America in recent years. Elsewhere, stocks are growing slower than they have since the fourth quarter of 2014. "Inventories may seem high now but if we get an outage somewhere of 1 million barrels a day for a period of three months, that's 90 million barrels gone," said Yasser Elguindi, an oil analyst at consultancy Medley Global Advisers. World-wide, there is little spare capacity beyond Saudi Arabia. Many of the world's producers are pumping as much as they can to offset lower revenue from weaker oil prices. Only the U.S., with its onshore oil fields that are faster to drill than offshore reservoirs, has room to increase pumping. But the ability of U.S. shale producers to quickly ramp up output hasn't been tested, and the small U.S. companies that pump shale oil may need a higher oil price than other producers to make new wells worthwhile. Credit: Selina Williams, Summer Said
Subject: Cartels; Supply & demand; Inventory; Crude oil prices; Petroleum production
Location: Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Classification: 9178: Middle East; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: May 25, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790897520
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790897520?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited with out permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shell to Lay Off Another 2,200 Staff; New round of restructuring comes amid low oil prices, integration of BG Group
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
Shell is counting on the acquisition of BG to give it a dominant foothold in lucrative liquefied natural gas markets and deep water oil fields offshore Brazil.
Full text: LONDON--Royal Dutch Shell PLC plans at least another 2,200 job cuts this year, part of the oil group's effort to adjust to low crude prices while integrating the recently acquired BG Group. The Anglo-Dutch oil giant had made it clear it would slash thousands of jobs after its roughly $50 billion takeover of BG, but the latest reductions announced on Wednesday would bring the total number cut this year to "at least" 5,000 globally. The reductions would offset the addition of BG's 4,600 staff and bring the total number of job cuts at Shell since 2015 to 12,500. Shell is just one of many oil companies trying to reduce costs fast to combat a dramatic slump in oil prices over the past two years, even though oil prices have rebounded off lows at the start of the year of below $30 a barrel. Across the industry, companies have slashed billions from their spending plans and fired thousands of employees to manage the sharp market downturn amid a global glut of crude. "These are tough times for our industry and we have to take further difficult decisions to ensure Shell remains competitive through the current, prolonged downturn," said Paul Goodfellow, Shell Vice President for the U.K. and Ireland in an emailed statement. Shell reported an 83% drop in first-quarter earnings from the same period last year, vowing at the time to bring down spending further. Just months into its acquisition of BG, management faces the challenge of delivering on promised merger-related savings. Shell is counting on the acquisition of BG to give it a dominant foothold in lucrative liquefied natural gas markets and deep water oil fields offshore Brazil. Some shareholders criticized the deal as too expensive. "We need to reduce our cost base, improve production efficiency and have an organization that best fits our combined portfolio and business plans," Mr. Goodfellow said. In the U.K. and Ireland, the company plans to reduce staff working in exploration and production by 475. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Acquisitions & mergers; Crude oil prices; Chemical industry
Location: United Kingdom--UK Ireland
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790903581
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790903581?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
China Looks to Open Up Commodities Futures Market, Regulator Says; It will add more products, such as crude oil
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
China will study the possibility of allowing domestic commercial banks and other financial institutions to trade in the commodities futures market, said Fang Xinghai, vice chairman of the China Securities Regulatory Commission at a conference in Shanghai Wednesday, according to a speech transcript posted on the commission's website.
Full text: SHANGHAI--A senior China securities regulator on Wednesday said the country would encourage commercial banks and foreign investors to trade in China's commodities futures market , where it plans to add more products such as crude oil in a signal of Beijing's ambition to seek greater pricing power in the market. China will study the possibility of allowing domestic commercial banks and other financial institutions to trade in the commodities futures market, said Fang Xinghai, vice chairman of the China Securities Regulatory Commission at a conference in Shanghai Wednesday, according to a speech transcript posted on the commission's website. China will also open up the commodities futures market to foreign investors, allowing them to hedge risks. It plans to start with crude oil, iron ore and rubber futures, said Mr. Fang, adding that calls have been growing from foreign investors wanting access to China's commodities futures market. "Opening up the market must be a two-way street, and both channels are important, but the current focus is about attracting foreign investors," Mr. Fang said. Chinese commercial banks and other institutions should be encouraged to enter the commodities futures market in an orderly manner to better manage risks. Domestic banks are only allowed to trade gold and silver futures, although their corporate clients and part of the high-net-worth individual clients have more demand for commodities futures to hedge risks and allocate assets, Mr. Fang added. He also called for more strict regulations and said that the exchanges have effectively clamped down on speculative trading on some commodities futures by raising margin requirements and transaction fees, and restricting trading lots. Stella Lee
Subject: Futures market; Crude oil; Commercial banks
Location: China Beijing China
Company / organization: Name: Securities Regulatory Commission-China; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1790913646
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1790913646?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Dollar Edges Lower as Traders Look to Yellen's Speech; The U.S. currency shows losses against some commodity-linked currencies amid an uptick in oil prices
Author: Cherney, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
The dollar got a boost from positive economic data, as well as commentary from some Fed bank presidents that suggested some officials believed the central bank could raise interest rates at its next policy committee meeting in June.
Full text: The dollar edged lower on Wednesday after several sessions of gains, as investors awaited comments expected Friday from Federal Reserve Chairwoman Janet Yellen for clues about whether the central bank could raise interest rates soon. In trading late Wednesday, the euro was up 0.1% against the dollar to $1.1154 and the pound jumped 0.6% to $1.4707, according to FactSet data. The WSJ Dollar Index, which measures the dollar against 16 currencies, was down nearly 0.2%. The dollar was also showing losses against some commodity-linked currencies, including the Brazilian real, Mexican peso and Russian ruble, amid an uptick in oil prices. The dollar gained slightly against the yen, trading recently at ¥110.2080 for a gain of more than 0.2%. The consolidation comes after the WSJ Dollar Index rose four out of the past five trading days prior to Wednesday. The dollar got a boost from positive economic data, as well as commentary from some Fed bank presidents that suggested some officials believed the central bank could raise interest rates at its next policy committee meeting in June. Still, investors will be closely watching Ms. Yellen's comments on Friday, when she speaks at Harvard University. "Without an endorsement from Fed Chair Janet Yellen, who speaks Friday morning, the idea of a near-term rise in U.S. rates could quickly fade, sinking much of the dollar's newfound support," Commonwealth Foreign Exchange said in a note Wednesday. Higher rates are positive for the dollar because it makes the currency more attractive to yield-seeking investors. The dollar has broadly risen over the past two years as investors expected U.S. rates to rise, though it has given up some of those gains this year amid concerns about economic growth. Interest-rate futures are reflecting a 32% chance the Fed raises rates at its June meeting, up from 4% last week, according to CME Group. Write to Mike Cherney at mike.cherney@wsj.com Credit: By Mike Cherney
Subject: American dollar; Interest rates
Location: United States--US
Company / organization: Name: CME Group; NAICS: 523210; Name: Harvard University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791022874
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791022874?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
White House to Push Companies for More Disclosure on Greenhouse Gas Emissions; Shareholders also pushing oil giants for more disclosure on impact of climate-change regulations
Author: Harder, Amy; Olson, Bradley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
The White House's Federal Acquisition Regulation Council, which directs government contracts, is expected to require companies that have contracts with the U.S. government to indicate publicly whether they disclose their greenhouse gas emissions, their goals to cut those emissions, and the risks a changing climate could pose to their operations.
Full text: WASHINGTON--The White House is set to propose a new rule Wednesday that would push companies with federal contracts to publicly disclose more information about their impact on climate change, their efforts to address the issue, and how a warmer planet could affect business operations. The White House's Federal Acquisition Regulation Council, which directs government contracts, is expected to require companies that have contracts with the U.S. government to indicate publicly whether they disclose their greenhouse gas emissions, their goals to cut those emissions, and the risks a changing climate could pose to their operations. "The goal in this effort is to try to have better and clearer information both about greenhouse gas emissions and accounting for climate-related risks," Brian Deese, a senior adviser to President Barack Obama, said in an interview. "We want to make sure that better information is informing contracting decisions going forward." The rule, which is expected to be finalized this fall after a public comment period, would affect an estimated 90% of all federal contracts, or more than $400 billion in annual contracting expenditures, according to the administration. The White House announcement will coincide with meetings Wednesday of Exxon Mobil Corp. and Chevron Corp. shareholders, where attendees are expected to vote on resolutions that would require the companies to disclose more information about the risks new climate-change regulations pose to their businesses. Related * Chevron CEO: Climate Change Could Help Business Both companies opposed the investor proposals, which call for them to show how the value of their assets could fall if the world moves toward lower-carbon energy sources. They're not expected to pass Wednesday, but they are expected to garner a far higher percentage of votes at each company than in previous years. The White House rule is much less sweeping than the activist investor efforts because it doesn't actually require any new public disclosure of information, only reporting on whether that information is currently disclosed. It also doesn't address the impact of climate-change regulations. The rule instead seeks to put companies on the record one way or the other about whether they have revealed their greenhouse gas emissions and goals to cut those emissions, and whether they have considered how the effects of a warmer planet--such as an increase in extreme weather events--could impact operations. Administration officials say they hope the rule will add to the public debate about climate-change risks, including events like Wednesday's shareholder meetings of two of the U.S.'s biggest oil and natural-gas companies. "There are significant existing demand drivers for disclosure of greenhouse gas emissions and climate-related risk data, including growing calls from investors, insurers, and institutions," three administration officials wrote in a blog item to be posted Wednesday. "Today's announcement sends another clear market signal that there is strong interest for disclosure of greenhouse gas emissions and climate-related risk data government-wide." The federal government is a major buyer of petroleum products, often for Department of Defense operations such as jet fuel for aircraft or diesel for Navy vessels. Exxon Mobil, Chevron and other major oil companies routinely compete for and win such contracts, which can extend across multiple years and stretch into the hundreds of millions of dollars. Write to Amy Harder at amy.harder@wsj.com and Bradley Olson at Bradley.Olson@wsj.com Credit: By Amy Harder and Bradley Olson
Subject: Emissions; Greenhouse effect; Bills; Shareholder meetings; Greenhouse gases; Climate change; Disclosure; Natural gas utilities
Location: United States--US
People: Obama, Barack Deese, Brian
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Chevron Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791023010
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791023010?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Government Bond Yields Barely Budge Despite Stronger Stocks and Oil; Possibility of Fed rate increase this summer continues to weigh down bond market
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
Interest-rate futures--a popular tool for hedge funds and money managers to place bets on the Fed's future policy moves--showed Wednesday that the odds of an interest-rate increase at the Fed's June 14-15 policy meeting were 32%, according to CME Group.
Full text: The yield on the benchmark 10-year U.S. government note barely budged Wednesday even as U.S. stocks strengthened and crude oil prices rose to the highest level since October. While strength in riskier markets sapped appetites for haven bonds, the selling pressure in the bond market was largely absorbed by buyers struggling to obtain income in a low yield world. Eurozone government bond yields including those in Germany and France fell Wednesday, and lower yields overseas turn Treasurys into a bargain. ''There is a global reach for yield,'' which is likely to keep a lid on U.S. bond yields, said John Brady, managing director at futures brokerage R.J. O'Brien. In late afternoon trading, the yield on the benchmark 10-year Treasury note was 1.87%, only a small uptick from 1.859% Tuesday. Yields rise as bond prices fall. The Dow Jones Industrial Average stock index was up nearly 1% and U.S. crude oil prices were up 1.9%. The bond market for many times in the past two years, has had a subdued reaction to strength in risky markets. Bond yields have been hold near their all-time lows driven in a large part by strong demand overseas. Foreign investors have been struggling to get positive income as negative interest rate policy in Japan and the eurozone has sent a large number of government debt abroad to yield below zero. U.S. bond yields have risen this month driven by a possibility of a rate increase by the Federal Reserve this summer. But higher yields have made them more appealing to foreign buyers. Wednesday's $34 billion sale of five year notes drew 66.6% indirect bidding, a proxy of demand by foreign investors. That was higher than the average of 59.5% for the past four sales of five-year notes. A two-year auction a day earlier also attracted solid foreign demand. The five-year notes were sold at a yield of 1.4%. While that was slim, it was a better alternative than negative yields on similar-maturity government bonds in Germany and Japan. Even U.S. buyers stepped up to bid on the two auctions. The direct bidding of the five-year notes was 11.6%, the highest since July 2014. Analysts say this could partly reflect a view that while the Fed may raise rates this summer, its tightening path remains very gradual and slow, which is unlikely to generate a big rise in U.S. bond yields. Investors who bought notes from the auctions "think the Fed's talk of a summer hike has been too impactful on yields,'' said Ian Lyngen, senior government bond strategist at CRT Capital. One risk is that higher bond yields along with a stronger dollar will tighten financial conditions and slow down the U.S. growth momentum, which would argue for the Fed to be cautious in raising rates, say analysts. The yield on the two-year note, highly sensitive to the Fed's rate policy outlook, settled at 0.918% Wednesday, the highest closing level since March 15. The yield risen from 0.774% at the end of April. A number of Fed officials over the past week warned that a rate increase in June isn't off the table. Interest-rate futures--a popular tool for hedge funds and money managers to place bets on the Fed's future policy moves--showed Wednesday that the odds of an interest-rate increase at the Fed's June 14-15 policy meeting were 32%, according to CME Group. A month ago the probability was zero. The odds for a July increase have jumped more sharply to 58% Wednesday from 15% a month ago. Write to Min Zeng at min.zeng@wsj.com Credit: By Min Zeng
Subject: Bond markets; Yield; Investments; Federal Reserve monetary policy; Crude oil prices; Eurozone
Location: United States--US France Japan Germany
Company / organization: Name: Peoples Bank of China; NAICS: 521110; Name: Harvard University; NAICS: 611310; Name: CME Group; NAICS: 523210; Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791023654
Document URL: https://login.ezproxy.uta.edu/ login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791023654?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Fed's Neel Kashkari: Fed Not Good at Predicting Oil Prices; Minneapolis Fed president says unlikely U.S. will go to negative rates; mentions initiative to explore ways to end threat of 'too big to fail' banks
Author: Shayndi Raice
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
Mr. Kashkari and several of his Federal Reserve colleagues have noted the limits of monetary policy in bringing back the U.S. economy and the need for fiscal policy to help spur growth.
Full text: BISMARCK, N.D.--Federal Reserve Bank of Minneapolis President Neel Kashkari said the central bank is bad at predicting the price of oil and the correlation between the dollar and oil prices remains murky. Speaking at a question-and-answer session at an oil conference, Mr. Kashkari spoke about a range of economic and regulatory issues. He said it was unlikely the U.S. would need to turn to negative interest rates as a tool to stimulate economic growth, as some European countries and Japan have done recently. He also attributed persistently low inflation partly to the drop in oil prices. Mr. Kashkari isn't a voting member of the rate-setting Federal Open Market Committee. Mr. Kashkari also mentioned his initiative to explore ways to end the threat posed by "too big to fail" banks. He said the banking industry needs to function like other areas of the economy. The oil industry, for example, suffered recently as the price of oil dropped. But the downturn didn't spread throughout the economic system. "You all have gone through a heck of a shock and the U.S. government didn't step in to bail you out," said Mr. Kashkari. "Our banking system needs to endure that kind of a shock without bringing down the whole U.S. economy." North Dakota has been hit especially hard since the price of oil began to tumble. Oil production in the Bakken formation, one of the highest-cost sources of U.S. production, was tiny before becoming the country's second-largest oil producer after Texas in 2012. In December, a Moody's report warned of a full-blown recession in the state if job losses continued. The Minneapolis Fed president said fiscal policy, specifically investments in human capital, can step in to help spur economic growth. Mr. Kashkari and several of his Federal Reserve colleagues have noted the limits of monetary policy in bringing back the U.S. economy and the need for fiscal policy to help spur growth. On the problem of growing student debt loads, Mr. Kashkari said the cost of education needs to come down so that we don't burden the next generation. "We need to be able to educate more people at lower costs," he said. Mr. Kashkari also responded to a question about Congress's use of money from a Federal Reserve account to fund a highway bill. He said it should be a one-time "gimmick" used by Congress because it compromises the Fed's independence. "Protecting that independence is really important," he said. "We can't do that anymore." Write to Shayndi Raice at shayndi.raice@wsj.com Credit: By Shayndi Raice
Subject: Banking; Fiscal policy; Recessions; Petroleum production; Economic growth
Location: Japan United States--US
Company / organization: Name: Congress; NAICS: 921120; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Federal Open Market Committee--FOMC; NAICS: 921130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791116432
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791116432?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Exxon, Chevron Shareholders Narrowly Reject Climate-Change Stress Tests; Supporters of proposals see victory in defeat
Author: Olson, Bradley; Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
Separately on Wednesday, the White House said it planned to propose a new rule that companies with federal contracts must disclose whether they share information about the risks that a changing climate could pose to their operations, as well as their goals to reduce greenhouse gas emissions.
Full text: Shareholders at Exxon Mobil Corp. and Chevron Corp. narrowly voted down resolutions calling for stress tests to determine the risk that efforts to curb climate change pose to their businesses. Despite the defeat, the proposals drew more support than any contested climate-related votes in the history of the two biggest U.S. oil and gas companies. Preliminary results showed 41% support from Chevron investors that cast ballots and 38% support at Exxon, an indication that more mainstream shareholders like pension funds, sovereign-wealth funds and asset managers are starting to take more seriously the threat of a global weaning from fossil fuels. The number of shareholders supporting the climate-risk measures "is significant, and it will continue to grow," said Beth Richtman, investment manager at the California Public Employees' Retirement System, which manages about $290 billion. Calpers owns about $1 billion worth of Exxon shares and approximately $600 million in Chevron stock. "There's a groundswell of share owners who are going to keep pushing this forward," she said. "We need to see them rise to the realm of best practices in terms of climate risk reporting, and we're not there yet." While the shareholder votes aren't binding, supporters of the measures declared victory even in defeat after the oil companies' annual shareholder meetings Wednesday. "You have to read this as a shot across the bow of the industry," said Andrew Logan, director of the oil and gas program at Ceres, a Boston-based nonprofit group that advocated for the proposals. Exxon and Chevron had fought to keep the measures off the ballot, a push that the U.S. Securities and Exchange Commission rebuffed. Separately on Wednesday, the White House said it planned to propose a new rule that companies with federal contracts must disclose whether they share information about the risks that a changing climate could pose to their operations, as well as their goals to reduce greenhouse gas emissions. That rule, expected to be completed this fall, would affect most federal contracts. The U.S. government is a major buyer of oil products, including jet fuel and diesel used by the military. Exxon Chief Executive Rex Tillerson said Wednesday the company includes in its energy outlook a proxy cost on carbon. "It's really the only way we know to accommodate in our financial decision-making the impacts of future policies that are yet to be formulated," he said. He added that most Exxon projects are either too short-term or too large for the theoretical cost of carbon they use in planning purposes to affect their decision-making. Exxon has also noted it published a 2014 report on managing climate risks that said none of the company's oil and gas holdings are threatened by a global push to reduce carbon emissions. Chevron told investors that the proposed climate measure was flawed. Efforts to limit warming could allow some energy producers, such as those who sell natural gas, to benefit while others fall out of favor, including coal-mining companies , Chevron said. The company is a large producer of natural gas and factors in a theoretical future price of carbon when deciding which projects to sanction, making a stress test unnecessary, the company said. "We don't think this proposal will advance our thinking," Chevron Chief Executive John Watson said Wednesday. Measures of this sort have been pushed in prior years by environmental groups and activist investors, but now more traditional shareholders are putting their muscle behind the proposals as concern spreads over the effect that policies to mitigate climate change could have on energy company financials. Those who led the filing of the Exxon resolution were the Church Commissioners for England and the New York State Common Retirement Fund, along with others. The lead filers for the Chevron resolution were Hermes Equity Ownership Services and Wespath Investment Management, a division of the United Methodist Church. Investors representing more than $10 trillion in assets pledged to support the climate proxy measures, which assert that Exxon, Chevron and other big oil companies should be transparent about how their drilling prospects would suffer if the world turned away from carbon-intensive fuels, including crude oil. The New York State Common Retirement Fund, Norway's sovereign-wealth fund, the Church of England, Calpers and others actively campaigned for the proposals. In December, nearly 200 countries pledged in Paris to hold the rise in average global temperatures to less than 2 degrees Celsius above preindustrial levels. This is the yardstick many shareholder resolutions have used to urge the companies to take greater action and show how such a goal will affect their business units. Supporters of that effort say more investors want to see how companies are preparing for climate change impacts. A stress-test measure at Occidental Petroleum Corp. received 49% of votes, and similar proposals passed overwhelmingly last year at two other big oil companies, BP PLC and Royal Dutch Shell PLC. In a report on climate released this month, Total SA, the French energy company, said it has reduced activity in Canada's oil-sands region and is avoiding Arctic exploration over concerns that some fossil fuels will have to stay in the ground if the goals set forth in Paris are achieved. ConocoPhillips and Statoil ASA have issued projections that global oil demand could fall significantly by 2040 if measures to reduce climate risk are put in place. By contrast, Exxon's projection for global oil demand in that year is 28% higher than peers' forecasts. "There's an awful lot of shareholder disquiet about how Exxon is approaching climate change," said Edward Mason, head of responsible investment for the Church Commissioners for England, which manages the assets of the Church of England. At the Exxon annual meeting, shareholders did approve one shareholder proposal, giving investors greater power to propose director candidates . None of eight proposed shareholder measures passed at Chevron's meeting. Amy Harder contributed to this article. Write to Bradley Olson at Bradley.Olson@wsj.com and Nicole Friedman at nicole.friedman@wsj.com Credit: By Bradley Olson and Nicole Friedman
Subject: Shareholder voting; Emissions; Carbon; Investments; Decision making; Climate change; Proposals; Stockholders; Natural gas utilities
Location: United States--US
People: Tillerson, Rex W
Company / organization: Name: New York State Common Retirement Fund; NAICS: 523991; Name: Public Employees Retirement System-California; NAICS: 525110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791128831
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791128831?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Unlikely Oil Tycoons; The plucky Jewish trader from London's East End risked his firm on a new class of tanker that just might be allowed to use the Suez Canal.
Author: Lowenstein, Roger
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract: None available.
Full text: As late as the 1880s, John D. Rockefeller's Standard Oil commanded fully 80% of the world's petroleum market. The most serious threats to his hegemony were already in his boardroom, having capitulated to mergers. Or so it seemed until Royal Dutch and Shell, a pair of relative latecomers to Big Oil, appeared from nowhere to challenge Rockefeller's near-monopoly. This is the story that Peter B. Doran tells in "Breaking Rockefeller: The Incredible Story of the Ambitious Rivals Who Toppled an Oil Empire." His heroes are Marcus Samuel Jr., the English merchant who founded Shell Oil, and Henri Deterding, an early executive at the Royal Dutch Petroleum Co., which would eventually merge with Shell. His villain is Rockefeller, whose cutthroat tactics Mr. Doran clearly despises. Rockefeller's oil trust did seem invincible. What happened? The present-day lords of Exxon and Shell will empathize. New supplies outstripped demand, creating a window for upstart challengers. The oil market has ever been thus. Though "monopoly" and "scarcity" dominate the headlines, the usual condition of the oil business is overabundance. That is why oil barons have been so tempted to form cartels. As Mr. Doran, vice president for research at the Center for European Policy Analysis in Washington, D.C., relates, this was so even at the dawn of the automobile age, which spurred a mad thirst for fuel. Rockefeller believed that competition "was the enemy of efficiency in the petroleum business--not its ally." He "systematically" eliminated rival refiners via "ruinous" price-cutting and the judicious use of corporate spies. Mr. Doran advances the barbed accusation that Rockefeller "could recoup the losses from a price war in one market by raising the cost of kerosene someplace else." He also has Rockefeller arranging for kickbacks from railroads, giving him another edge. What exposed him, finally, to competition was a pair of gushers in remote corners of the earth. "Breaking Rockefeller" takes us to czarist Russia and the Caspian port of Baku, the so-called Black City of crude where Marco Polo had once witnessed a wondrous "fountain from which oil springs in great abundance." The problem was the difficulty of shipping the oil to market. The obvious route--through the Suez Canal and thence to Asia--was barred by the canal authorities due to the fear of an explosion. Enter Marcus Samuel, a plucky Jewish trader from London's East End, bookish but willing to take a risk (traits he shared with Rockefeller). He longed to penetrate the British upper crust, and the surest route was wealth. He risked his firm on the development of a new class of tanker that just might pass muster with the International Suez Commission. It worked. Samuel's ships were named for sea shells, and the Shell logo would soon appear on gas stations across the world. While Samuel was busy climbing the social hierarchy of England, Dutch colonists discovered oil in the remote tobacco fields of Sumatra in northern Indonesia. When their wells ran dry, the company brought in geologists who told them that they were drilling in the wrong place. The geologists, hiking through rugged terrain, discovered anticlines (hidden folds of rock in the earth), and the anticlines led them to oil--a lot of oil. Henri Deterding took over the company just after the strikes in Sumatra and methodically expanded in the Far East. "The pendulum of fortune," Mr. Doran writes, "now swung violently in Royal Dutch's favor." Royal Dutch would merge with Shell in 1907, and Mr. Doran contends that it took their combined power, along with that of the U.S. Justice Department, to finally "break" Standard Oil. "The best antitrust laws in the world," he writes, "mattered little if there was no competing, sizable alternative for consumers." This statement is puzzling, since the dismemberment of Standard into numerous smaller companies supplied its own competition. Nor is it clear that Rockefeller was "broken"; as Mr. Doran states, his wealth grew faster after the divestiture than before it. Mr. Doran has a broad lens, taking in Alfred Nobel and the Rothschilds as well as the muckraker Ida Tarbell. "Breaking Rockefeller" emulates the best oil literature, in which geology and geopolitics go hand in hand. One thinks of Anthony Sampson's "The Seven Sisters" (1974) and Daniel Yergin's "The Prize" (1990). He relates many nice vignettes, such as how Winston Churchill pushed to convert the tradition-bound British navy from coal-burning ships to (much swifter) oil burners. But Mr. Doran is not quite master of his material. There are too many story lines going in too many directions. We do not need virtually an entire chapter on the 1905 uprising in Baku to illustrate "country risk"; nor do we need four pages detailing Glenn Curtiss's 1910 flight over Manhattan to observe that oil would find a large market in the sky. A more serious problem is the author's weakness for cliché. "Shock" is partnered with "awe"; "points" have "no return"; the past is "indelibly linked to the present." Overstatement abounds. Observing that Rockefeller and Churchill were similarly bewitched by the commodity's potential, Mr. Doran writes: "Both looked at oil and saw themselves." And he writes of the antitrust case against Standard Oil, brought in 1909 and resolved in 1911: "Hanging in the balance was the future of America's young democracy." Actually, our democracy was neither young nor in the balance. It is interesting to read of Samuel's success--he did eventually earn his title, becoming the Viscount Bearsted, though his inattention to work weakened Shell and left it vulnerable to Royal Dutch. And there is a good description of Rockefeller silently presiding over ritual lunches with executives. But Mr. Doran cannot quite get his arms around the lust for profit that motivated the oil titans. He writes that "greed" was "the most implacable piece" of the "puzzle," later that the "challenge" of greed still exists in the oil business and later still that greed remains part of the "equation" of oil. The author seems eager to say something about greed but is not sure what. He might have observed that, without it, we would not have all the oil that his story celebrates. Mr. Lowenstein's most recent book is "America's Bank: The Epic Struggle to Create the Federal Reserve." Credit: By Roger Lowenstein
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Arts
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791144093
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791144093?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shrinking Oil Revenues Prompt Gulf States to Sell Bonds; Gulf states could face a total $1 trillion deficit in next five years if oil prices stay low
Author: Parasie, Nicolas; Whittall, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 May 2016: n/a.
Abstract:
Saudi Arabia, the Middle East's biggest economy, will need to find ways to finance a $324 billion deficit, ratings firm Moody's Investors Service said recently. Besides issuing bonds and tapping their reserves, Gulf countries are resorting to a raft of measures to ease the pain of lower oil prices.
Full text: The oil-exporting countries of the Persian Gulf, from Qatar to Saudi Arabia, are turning to the public to sell debt as shrinking oil revenues erode their budgets. Qatar, which owns some of the world's largest gas reserves, sold $9 billion worth of bonds in three multiyear tranches, the latest Gulf state to tap the international capital markets for funds in an attempt to shore up government finances crippled by low energy prices. Qatar's return to the markets follows the example of the United Arab Emirates and Bahrain, which earlier this year sold around $6 billion worth of bonds. Saudi Arabia also is preparing to tap the international bond markets later this year, people familiar with the matter have said. It already secured a $10 billion bank loan with the help of international lenders earlier this year. The six member states of the Gulf Cooperation Council--Saudi Arabia, the U.A.E., Qatar, Kuwait, Bahrain and Oman--have relied mostly on income from oil and gas sales to expand their economies. Now, after oil prices tumbled below $30 a barrel at the start of the year, budget deficits are widening, though oil has since rebounded to nearly $50 a barrel. The GCC states this year are expected to post a deficit of between $120 billion and $150 billion depending on the price of oil, said Anita Yadav, head of fixed-income research at Dubai-based bank Emirates NBD. The International Monetary Fund said earlier this year that if oil prices remained low, the Gulf nations faced a combined deficit of nearly a $1 trillion in the next five years. Saudi Arabia, the Middle East's biggest economy, will need to find ways to finance a $324 billion deficit, ratings firm Moody's Investors Service said recently. Besides issuing bonds and tapping their reserves, Gulf countries are resorting to a raft of measures to ease the pain of lower oil prices. Saudi Arabia, for example, is overhauling its economy to bring to an end the country's dependence on oil. Others like the U.A.E. or Kuwait have raised taxes and fees, while some have also cut subsidies. There has been a flurry of debt sales in recent weeks, as issuers want to wrap up their financing plans ahead of the start of the Muslim holy month, called Ramadan, set to start around June 6 this year and often a slow time for deal activity in the region. Recent issuers include state-linked entities such as Abu Dhabi sovereign fund Mubadala, the emirate's flagship carrier, Etihad, and Dubai's ports operator, DP World. Qatar's issuance comes despite several ratings downgrades earlier this year. Moody's this month cut its credit ratings on Saudi Arabia, Oman and Bahrain. Qatar wasn't downgraded but had its outlook changed to negative. Middle Eastern governments have already sold $8.6 billion of internationally marketed bonds in 2016 before the Qatar issue, just shy of the total full-year issuance for 2015 of $8.9 billion, according to Dealogic. In April, Abu Dhabi sold a total of $5 billion of debt spread across five-year and 10-year tranches, paying interest rates of 2.1% and 3.1%, respectively. Gulf governments are likely to borrow more in the near future, according to research firm Marmore, a subsidiary of Kuwait Financial Centre Markaz. It estimates Gulf governments will raise between $285 billion and $390 billion in debt through 2020 by issuing local and international debt and bonds. That compares with $72.1 billion raised between 2008 and 2014. HSBC Holdings, J.P. Morgan Chase, Bank of Tokyo-Mitsubishi UFJ and QNB Capital are coordinating Qatar's bond sale, in which Qatar is set to raise $9 billion spread across three tranches, according to an update notice released Wednesday by banks handling the deal. Tasks Vossos in London contributed to this article. Write to Nicolas Parasie at nicolas.parasie@wsj.com and Christopher Whittall at christopher.whittall@wsj.com Credit: Nicolas Parasie, Christopher Whittall
Subject: Bond issues; International finance; Prices; Budget deficits
Location: Bahrain Kuwait Oman Qatar United Arab Emirates Saudi Arabia
Company / organization: Name: DP World; NAICS: 488310; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 25, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791258221
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791258221?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Brent Oil Futures Rise Above $50, Highest Since November; Brent rose 30 cents to $50.04 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
[...]some analysts say the rally is unlikely to last, given that major producers -- especially those in the Organization of the Petroleum Exporting Countries -- are likely to keep production high in the battle for market share.
Full text: HONG KONG--International oil prices rose to the highest level in six months Thursday, as the recent decline in U.S. crude stocks raised expectations for a tightening in the market amid lower global supply. Brent, the international benchmark for oil, rose 30 cents to $50.04 a barrel in morning Asian trade, the highest since early November. U.S. oil prices traded on the New York Mercantile Exchange rose 29 cents to $49.85 a barrel. Persistent oversupply has kept prices well below their highs above $100 a barrel two years ago. The collapse in prices has prompted energy companies to withhold investment, especially in the upstream sector, resulting in a slowdown in global output growth. Ongoing supply disruptions in North America and Africa, as well as dwindling output from Latin America, have also pushed up prices. "The fundamentals of the U.S. are changing, and the declining production rate in the U.S. is a welcoming sign that adds to the belief the glut is dwindling," said Vyanne Lai, energy analyst at the National Australia Bank. The U.S. Energy Information Administration said U.S. crude stockpiles fell 4.2 million barrels last week. Analysts polled by The Wall Street Journal had expected a decrease of 2.5 million barrels. U.S. output also fell for the 11th straight week to 8.8 million barrels a day from a peak of 9.7 million barrels a day in April 2015. However, some analysts say the rally is unlikely to last, given that major producers -- especially those in the Organization of the Petroleum Exporting Countries -- are likely to keep production high in the battle for market share. The rising price makes an OPEC production cut even less likely at the upcoming June 2 summit, said Citi Futures analyst Tim Evans. Refineries in France, meanwhile, remain beset by labor unrest, limiting crude oil consumption there, he added. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Energy industry; Price increases
Location: United States--US Africa Latin America North America
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791150446
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791150446?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Treasury Yields Lower Even as Oil Hits $50
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract: None available.
Full text: The safe-haven bond market is shaking off stronger oil and stocks this morning. While headline durable goods was good, the details were less upbeat as orders for nondefense capital goods excluding aircraft fell 0.8% in April. Meanwhile, traders say the rise in bond yields the past 2 weeks suggests bond investors have adjusted to the risk of a rate increase by the Fed this summer. Higher yields have bolstered demand for this week's 2- and 5-year auctions; analysts say today's $28B sale of 7s could go well, too. The 10-year yield is at 1.856%, versus 1.87% yesterday. Write to Min Zeng at min.zeng@wsj.com Credit: By Min Zeng
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791154808
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791154808?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
$50 Oil Is a Pain at the Pump in Asia; India, Malaysia, Thailand and Indonesia seize big drop in oil prices to roll back costly fuel subsidies
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
India, Malaysia, Indonesia and Thailand are among big fuel consumers in the region that took advantage of the slump in oil prices to scale back long-standing government assistance for gasoline, diesel and other fuels.
Full text: The return of $50 oil promises to sting motorists and other energy consumers across Asia, leaving them stuck with higher energy bills following the rollback of costly fuel subsidies. India, Malaysia, Indonesia and Thailand are among big fuel consumers in the region that took advantage of the slump in oil prices to scale back long-standing government assistance for gasoline, diesel and other fuels. Now, oil prices are on the rise again. Brent crude oil rose above $50 a barrel for the first time in six months, up 79% from its 12-year low of $27.88 in January. That is translating to higher fuel prices across the region. Diesel prices in Delhi have climbed more than 7% this year, while diesel in Thailand is up 17%, according to data compiled by BMI Research. Many countries subsidize their citizens' energy bills. In Asia, home to some of the world's largest energy consumers, subsidies became a multibillion-dollar burden during the era of $100 oil. Those countries are among several that cut their spending on fuel subsidies as prices began to slide in 2014. India under Prime Minister Narendra Modi removed diesel subsidies in October 2014, continuing steps taken by his predecessor. In 2012, India spent more on oil-related subsidies than any country in Asia, at $39.4 billion. But by 2014, that bill fell by a quarter to $29.7 billion, according to the International Energy Agency. The cuts have resulted in huge savings for the Indian government, said Marie Diron, who tracks India for ratings agency Moody's. The rollbacks have coincided with greater spending on infrastructure, making any reinstatement of subsidies a tall order for Mr. Modi's government, she said. "Households [and] corporates have had to spend more on their energy bills than they would have otherwise," she said. But at the same time "it brings some stability to public finances that were before subject to wider fluctuations depending on oil prices." Indonesia, meanwhile, has cut its oil subsidy bill by 16% over the same time, while Malaysia slashed subsidies by 41% from 2013 to 2014. The lower subsidies come as fuel demand in many countries in the region is still clicking along. In India, demand grew by 10% in the first quarter. If the rebound in oil prices is leading to higher inflation, then it hasn't yet shown up in the data. Inflation in many countries in the region has either remained stable or declined in recent months. "At nearly $50 a barrel, oil prices are still well below their year-ago level," said Frederic Neumann, co-head of Asian economic research at HSBC. But he added that inflation also remains low "in part because overall growth is so weak." Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Bills; Gasoline prices; Price increases
Location: Indonesia India Malaysia Thailand Asia
People: Modi, Narendra
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United S tates, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791154814
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791154814?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Slip After Hitting $50 a Barrel; There are concerns that higher prices could unlock more supply
Author: Puko, Timothy; Kantchev, Georgi; Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
Related Coverage * How High Can Oil Prices Go? * $50 Oil Is a Pain at the Pump in Asia * Oil Prices Poised to Hit Sweet Spot for Global Economy * The New Oil Traders: Moms and Millennials * Heard: The Oil Rally: What Comes After $50 The move above $50 was seen as a key moment by many analysts and traders.
Full text: U.S. oil prices ended slightly lower Thursday after briefly rising above $50 a barrel in intraday trading, as investors considered whether higher prices could unlock more output in an already oversupplied market. U.S. crude oil for July delivery settled down 8 cents, or 0.2%, at $49.48 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, lost 15 cents, or 0.3%, to $49.59 a barrel on ICE Futures Europe. Both benchmarks had topped $50 a barrel earlier Thursday. Related Coverage * How High Can Oil Prices Go? * $50 Oil Is a Pain at the Pump in Asia * Oil Prices Poised to Hit Sweet Spot for Global Economy * The New Oil Traders: Moms and Millennials * Heard: The Oil Rally: What Comes After $50 The move above $50 was seen as a key moment by many analysts and traders. Many trade based on momentum and the patterns of other traders, and a lot of options have strike prices that kick in at $50 a barrel. Some will see crossing that line as a signal that prices are rising and they should buy, but others are considering whether that level will lead more producers to sell and ramp up output. It is common for volatility to die when the market approaches that type of number, traders said. And volatility did hit its lowest point since last June, a level not consistently seen in more than two years. "You have these psychological numbers that are almost like magnets. It goes there and gets stuck there," said to Tim Pickering, president at Auspice, which manages $300 million. Prices are still up 89% from a 13-year low hit in February, thanks primarily from disruptions to production and pipelines, primarily in Canada and Africa, that cut supply by about 3.4 million barrels a day in May, according to TD Securities. That has traders viewing a market coming into balance, ending a long period of oversupply, said the bank's head of commodity strategy, Bart Melek. As long as oil stayed below $50, SEB Markets clients believed the price would fall back down to around $45, said Bjarne Schieldrop, SEB's chief commodities analyst. "Now we have $50 that is the reference point," he said. "So when it dips below 50, that will be seen as a buying opportunity." But many see the disruptions, wildfires in Canada and unrest in a key oil-producing region of Nigeria, as temporary situations that may have run their course. There are few signs that other production cuts are coming to offset steadily rising production from OPEC, a broker and trader said. "The market looks pretty well supplied," said Scott Shelton, broker at ICAP PLC. "We've hit a major point at 50 bucks and (traders) don't...have enough information" to keep betting that prices can go even higher. Supply from countries in the Organization of the Petroleum Exporting Countries is strong. OPEC will meet next week, but few expect the meeting to result in any effort to cut or cap production to help prices. Key to OPEC production is Iran. Currently, Iran's oil exports have reached 2 million barrels a day and they are expected to rise to 2.2 million barrels a day by the middle of the summer, the National Iranian Oil Company has said. "We are bound for a correction soon because the fundamentals say there is still a lot of oil out there in floating storage," said Michael Nielsen, senior derivatives trader at Global Risk Management. The market could tumble again by around $6-$10 once levels of $51 or $52 a barrel are reached, Mr. Nielsen said. At this stage, investors could be more likely to square their positions and cash in on their trades. A rise in U.S. rig counts could be the trigger for a fall, indicating that U.S. production is ramping up again. Baker Hughes will release the latest oil rig count Friday, which many see as a proxy for activity in the industry. Last week, Baker Hughes said the rig count was unchanged after 17 weeks of declines. Gasoline futures settled down 2.21 cents, or 1.3%, at $1.6195 a gallon. Diesel futures fell 1.14 cents, or 0.8%, to $1.5013 a gallon. Jenny W. Hsu and Alistair MacDonald contributed to this article. Write to Timothy Puko at tim.puko@wsj.com , Georgi Kantchev at georgi.kantchev@wsj.com and Miriam Malek at Miriam.Malek@wsj.com Credit: By Timothy Puko, Georgi Kantchev and Miriam Malek
Subject: Crude oil prices; Crude oil; Supply & demand
Location: United States--US Asia
Company / organization: Name: ICAP PLC; NAICS: 523140; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791163375
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791163375?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Asian Markets Edge Up as Oil Breaches Key Level; Brent crude crosses $50 a barrel; stocks overall fairly muted
Author: Fong, Dominique
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
Citigroup analysts said in a morning note they don't anticipate investors in Asia adding much risk to their portfolios before further economic data from the U.S. later Thursday, a scheduled speech by U.S. Federal Reserve Chairwoman Janet Yellen on Friday, and the closure of stock markets in the U.S. and the U.K. on Monday for public holidays.
Full text: Energy shares rose across Asia on Thursday as oil prices breached a key threshold, though concerns about a U.S. interest-rate increase capped share-price gains. Japan's Nikkei Stock Average ended up 0.1%, Australia's S&P/ASX 200 gained 0.3%, and Korea's Kospi slipped 0.2%. In China, the Shanghai Composite Index recouped losses to end up 0.3%. Hong Kong's Hang Seng Index ended 0.1% higher. In early Asian trading, Brent oil futures, a global benchmark for oil, broke above $50 a barrel a barrel, a psychologically important level for traders. Goldman Sachs last year projected oil could drop to as low as $20 a barrel, and the sinking price was a key worry for stock investors globally. Falling oil prices hurt profits at energy companies and the financial institutions that lend to them. Also, the decline hasn't translated into a big uptick in consumer spending in the U.S., adding to concerns about the health of the U.S. economy. A higher oil price "will be a good, positive sentiment for the equities market," said Alex Wijaya, a senior sales trader for CMC Markets in Singapore. In Hong Kong, energy shares were the bright spot. Chinese oil producer PetroChina was up 0.4%. Traders otherwise seemed to be booking profit from the Hang Seng Index's 2.2% rise Wednesday, the largest one-day gain since mid-April. Fundamentally, traders are still "haunted" by the sluggish China economy , Mr. Wijaya said. "It's still doubtful how much further these shares can recover." In the morning, Chinese stocks sank on worries about further yuan depreciation. Concerns were prompted by the authorities' move Wednesday to fix the yuan at its weakest level since March 2011. Chinese investors were also cautious amid signs that Beijing is tightening regulation of its commodities markets, and amid suspicions the government has intervened to shore up the market. The "invisible hand"--buying of banking shares by a group of state-backed funds--is still propping up the index to prevent a wave of margin calls that would be triggered if the benchmark falls below 2,700 points, which would trigger more selling, said Jacky Zhang, an analyst at BOC International. Some listed companies have pledged their shares as collateral for bank loans, he said. Chinese stocks reversed losses in the afternoon to finish with a gain, led by materials and energy shares. The smaller Shenzhen Composite Index rose 0.5%, and the Nasdaq-style ChiNext index climbed 0.9%. Concerns about the U.S. economy resurfaced after an early reading of Markit Economics' services purchasing managers index came in weaker than expected overnight. In a sign of investor caution, the price of gold, a traditional safe-haven asset, rebounded in early Asian trading to $1,232.30 a troy ounce. Citigroup analysts said in a morning note they don't anticipate investors in Asia adding much risk to their portfolios before further economic data from the U.S. later Thursday, a scheduled speech by U.S. Federal Reserve Chairwoman Janet Yellen on Friday, and the closure of stock markets in the U.S. and the U.K. on Monday for public holidays. The price of Brent crude oil was recently at $50.02 a barrel. Yifan Xie contributed to this article. Write to Dominique Fong at Dominique.Fong@wsj.com Credit: By Dominique Fong
Subject: Stock exchanges; Purchasing managers index; Energy industry
Location: Australia Japan United States--US Asia China Hong Kong
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Stree t Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791170570
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791170570?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Climate-Change Tests Voted Down --- Investors at Chevron, Exxon reject proposals to assess risks of fight against global warming
Author: Olson, Bradley; Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 May 2016: B.3.
Abstract:
Separately on Wednesday, the White House said it planned to propose a new rule that companies with federal contracts must disclose whether they share information about the risks that a changing climate could pose to their operations, as well as their goals to reduce greenhouse gas emissions.
Full text: Shareholders at Exxon Mobil Corp. and Chevron Corp. narrowly voted down resolutions calling for stress tests to determine the risk that efforts to curb climate change pose to their businesses. Despite the defeat, the proposals drew more support than any contested climate-related votes in the history of the two biggest U.S. oil and gas companies. Preliminary results showed 41% support from Chevron investors that cast ballots and 38% support at Exxon, an indication that more mainstream shareholders such as pension funds, sovereign-wealth funds and asset managers are starting to take more seriously the threat of a global weaning from fossil fuels. The number of shareholders supporting the climate-risk measures "is significant, and it will continue to grow," said Beth Richtman, investment manager at the California Public Employees' Retirement System, which manages about $290 billion. Calpers owns about $1 billion worth of Exxon shares and approximately $600 million in Chevron stock. "There's a groundswell of share owners who are going to keep pushing this forward," she said. "We need to see them rise to the realm of best practices in terms of climate risk reporting, and we're not there yet." While the shareholder votes aren't binding, supporters of the measures declared victory even in defeat after the oil companies' annual shareholder meetings Wednesday. "You have to read this as a shot across the bow of the industry," said Andrew Logan, director of the oil and gas program at Ceres, a Boston-based nonprofit group that advocated for the proposals. Exxon and Chevron had fought to keep the measures off the ballot, a push that the U.S. Securities and Exchange Commission rebuffed. Separately on Wednesday, the White House said it planned to propose a new rule that companies with federal contracts must disclose whether they share information about the risks that a changing climate could pose to their operations, as well as their goals to reduce greenhouse gas emissions. That rule, expected to be completed this fall, would affect most federal contracts. The U.S. government is a major buyer of oil products, including jet fuel and diesel used by the military. Exxon Chief Executive Rex Tillerson said Wednesday the company includes in its energy outlook a proxy cost on carbon. "It's really the only way we know to accommodate in our financial decision-making the impacts of future policies that are yet to be formulated," he said. He added that most Exxon projects are either too short-term or too large for the theoretical cost of carbon they use in planning purposes to affect their decision-making. Exxon has also noted it published a 2014 report on managing climate risks that said none of the company's oil and gas holdings are threatened by a global push to reduce carbon emissions. Chevron told investors that the proposed climate measure was flawed. Efforts to limit warming could allow some energy producers, such as those who sell natural gas, to benefit while others fall out of favor, including coal-mining companies, Chevron said. The company is a large producer of natural gas and factors in a theoretical future price of carbon when deciding which projects to sanction, making a stress test unnecessary, the company said. "We don't think this proposal will advance our thinking," Chevron Chief Executive John Watson said Wednesday. Measures of this sort have been pushed in prior years by environmental groups and activist investors, but now more traditional shareholders are putting their muscle behind the proposals. Those who led the filing of the Exxon resolution were the Church Commissioners for England and the New York State Common Retirement Fund, along with others. The lead filers for the Chevron resolution were Hermes Equity Ownership Services and Wespath Investment Management, a division of the United Methodist Church. Investors representing more than $10 trillion in assets pledged to support the climate proxy measures, which assert that Exxon, Chevron and other big oil companies should be transparent about how their drilling prospects would suffer if the world turned away from carbon-intensive fuels, including crude oil. --- Amy Harder contributed to this article. Credit: By Bradley Olson and Nicole Friedman
Subject: Shareholder voting; Proposals; Climate change; Stockholders
Location: United States--US
People: Tillerson, Rex W
Company / organization: Name: Public Employees Retirement System-California; NAICS: 525110; Name: Chevron Corp; NAICS: 211111, 324110; Name: Exxon Mobil Corp; NAICS: 211111, 447110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: May 26, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791224424
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791224424?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil at $50: Where Are Crude Prices Headed Next? Analysts appear unable to reach consensus as market offers opposing hints to oil rally's potential
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
Related * Oil Prices Poised to Hit Sweet Spot for Global Economy * The New Oil Traders: Moms and Millennials * Oil Touches $50 on Easing Supply-Glut Fears * Iran's Oil Deals Hit Banking Snag The return of $50 oil is the latest development in a market that has confounded investors, producers and traders since a selloff caused by a global oversupply of crude began in 2014.
Full text: HONG KONG--While oil's rise above $50 a barrel for the first time in seven months is a landmark for the market, analysts appear to have no clear idea how long this year's crude rally might last. Brent crude, used to price much of the world's oil, and West Texas Intermediate, the U.S. benchmark, both topped $50 a barrel Thursday before edging lower to $49.59 and $49.48 a barrel, respectively. Related * Oil Prices Poised to Hit Sweet Spot for Global Economy * The New Oil Traders: Moms and Millennials * Oil Touches $50 on Easing Supply-Glut Fears * Iran's Oil Deals Hit Banking Snag The return of $50 oil is the latest development in a market that has confounded investors, producers and traders since a selloff caused by a global oversupply of crude began in 2014. Prices had fallen below $30 a barrel at the beginning of this year--a level not seen since early last decade--before mounting a recovery. Many analysts cite strong demand from major emerging countries such as China and India, coupled with supply constraints on many main producers in the Middle East, as a reason to remain bullish on oil. However, those in the "bear" camp reckon there is still plenty of global supply that could potentially come on line, with a number of U.S. producers of shale oil ready to step up production as prices rise. The return of thousands of barrels of crude onto global markets from Iran is also helping keep oil plentiful. "The brave new world of petroleum promises to be volatile and the 'new normal' for oil prices makes stability elusive," analysts at Citi said in a report. In recent weeks, supply disruptions from Nigeria to Canada to Libya took enough oil off the market to launch Brent prices back above $50. In the lead-up to those outages, waning North American output helped drain a massive overhang in U.S. stockpiles, which have eased from 80-year highs reached weeks ago. Some analysts expect prices to creep higher this year. The summer driving season is on the horizon in the U.S. and other advanced economies, a period that normally drives up consumption of oil products, chiefly gasoline. Elsewhere, low prices have already helped fuel a big rise in demand. In China, oil imports have risen 12% this year, government data show. That is thanks in part to the country's efforts to fill up its strategic reserves of oil. The gain has also been supported by the rise of independent Chinese refiners, known as teapots, that have been processing more oil for both the domestic and export markets. In India, fuel consumption rose 10% in the first quarter as auto sales there hit a record, according to International Energy Agency estimates. "The U.S. driving season is approaching," said Peter Lee, oil-and-gas analyst at BMI Research in Singapore. "The market is [also] counting on gasoline demand in China and India." Another factor to keep a floor under prices: The Organization of the Petroleum Exporting Countries, long the dominant force in setting global prices, has lost much of its ability to loosen the oil taps because of reduced spare capacity among major producers. While the price recovery is welcome for oil producers and services companies that help them drill wells, few expect a return of the boom years of the first half of the decade, when $100 oil was a fixture of the market and helped fund far-flung ventures in remote locales offshore and in the Arctic . Those days also seeded a drilling renaissance in the U.S., where the sector is now barely getting by and suffering a wave of bankruptcy filings . Still, some analysts said prices were likely to be kept in check by the fact that there are large volumes of supply ready to return to the market. For one thing, recent outages among exporters are likely to be temporary, they said. At the same time, the U.S. is littered with drilled wells that haven't been activated and $50 oil makes doing so profitable, according to Citigroup, while prices at $60 are likely to spur fresh drilling. The recent price rally could release 400,000 barrels a day or more of new U.S. output. The bank's analysts forecast that oil prices could reach around $65 a barrel by the end of 2017, though they said they have only "65% or so confidence in this price path." Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Consumption; Price increases; Supply & demand
Location: Iran United States--US India China
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791228676
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791228676?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, I nc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Chevron-Led Group Bets More on Oil Field
Author: Clark, Simon; Williams, Selina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 May 2016: B.6.
Abstract:
Chevron Corp. and its partners agreed to invest as much as an additional $37 billion to increase output at a Kazakhstan oil field that is among the world's most expensive, the country's energy minister said Wednesday, a rare big spending commitment during a prolonged crude price slump.
Full text: ASTANA, Kazakhstan -- Chevron Corp. and its partners agreed to invest as much as an additional $37 billion to increase output at a Kazakhstan oil field that is among the world's most expensive, the country's energy minister said Wednesday, a rare big spending commitment during a prolonged crude price slump. The investment in the oil field known as Tengiz would begin in 2017 and come on top of the roughly $37 billion already spent by Chevron, the field's operator, and its partners: state-owned energy firm KazMunaiGas, Exxon Mobil Corp. and Russia's Lukoil. Chevron Chief Executive John Watson was recently in Kazakhstan and discussed the project with the nation's political leaders, said Kanat Bozumbayev, the country's energy minister, in an interview. The new investment is expected to produce 24,000 jobs in Kazakhstan, he said. "For us it's good news," Mr. Bozumbayev said. "This future growth project is very important for us." Chevron said the consortium would announce the final investment decision for Tengiz at an appropriate time, adding a "rigorous review of the future growth project is ongoing." The investment is among a handful of large outlays by large oil companies during a nearly two-year-long slump in crude prices. Companies have been forced to delay or cancel about $270 billion in projects through March since oil prices began their long slide, according to consultants Rystad Energy, including expensive Arctic developments. Chevron has lowered its spending as its revenue and profit take a beating, including disclosing in 2014 a delay in its expansion plans for Tengiz. The company estimated its overall capital spending will range between $17 billion and $22 billion annually over the next two years -- down from this year's budget of between $25 billion and $28 billion. The project is vital for Kazakhstan, which depends on oil for about half its state revenue. The economy of the Central Asian state has suffered as oil prices have more than halved since a peak in mid-2014. The IMF forecast gross domestic product growth of just 0.1% this year compared with 6% in 2013 before oil prices started falling. Tengiz's output is currently about 500,000 barrels a day, and the expansion would boost its output to about 760,000 barrels a day by 2021. Credit: Simon Clark, Selina Williams
Subject: Capital expenditures; Oil fields
Location: Kazakhstan
Company / organization: Name: KazMunaiGaz; NAICS: 213111; Name: Chevron Corp; NAICS: 211111, 324110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2016
Publication date: May 26, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791242969
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791242969?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Iran's Oil Deals Hit Banking Snag; Energy companies turn to small lenders, barter to sidestep continuing U.S. banking limitations
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract: None available.
Full text: TEHRAN--Even after the lifting of international sanctions against Iran, long-standing U.S. banking limitations are impeding the country's oil resurgence by forcing energy companies to use small lenders or barter to get their deals done. France's Total SA in February had to arrange payments through three smaller European banks to ship the first exports of Iranian crude to Europe in years, said Mohsen Ghamsari, the director in charge of marketing oil at the National Iranian Oil Co. These banks do little business in the U.S., making them less likely to run afoul of U.S. restrictions. Before international banking sanctions, which started around 2006, Total often used giant French bank BNP Paribas SA for project finance and oil shipments in Iran, according to people familiar with the matter. A BNP representative said the bank is wary of doing business in Iran after getting hit with an $8.9 billion fine for breaching American sanctions last year. Total declined to comment. The U.S. banking restrictions remain in place over Iran's alleged support for terrorism--which Iran denies--and its testing of ballistic missiles, which it says is legitimate. They ban dollar transactions processed through the U.S. financial system, as well as any dealings with entities accused by the U.S. government of supporting terrorism, human-right violations and long-range missile programs. These restrictions, which date back to the 1990s, have outlived the international sanctions related to Iran's nuclear program, which were lifted in January as a result of a deal between Iran and six world powers. The deal created an opportunity for energy companies in one of the world's biggest oil producers, but the opening has been narrow and fleeting. Energy companies have had to be nimble because the remaining U.S. restrictions ban transactions with Iran in dollars, the currency of choice in the global oil market. But most important, major European banks refuse to take on even legal business for fear of falling foul of U.S. authorities. The smaller banks that Mr. Ghamsari said Total used--Germany's Europäisch-Iranische Handelsbank AG, Switzerland's Banque de Commerce et de Placements and Turkey's Halk Bankasi--don't do much business in the U.S.--if any. BCP declined to comment. EIH said it is helping customers dealing with Iran but declined to provide more details. Halkbank didn't respond to requests for comment. Royal Dutch Shell PLC and BP PLC, which declined to comment, have yet to buy Iranian oil because their banks refuse to deal with the Islamic Republic, Mr. Ghamsari said. After running into banking hurdles, some European companies are setting up complex bartering arrangements to buy Iranian petrochemicals--bypassing the Western banking system altogether--said Ali Mohammad Bossaghzadeh, the director of production control at Iran's state-run National Petrochemical Co. Under one such arrangement, he said a European company pays for the Iranian petrochemicals by sending money to an EU-based maker of spare automobile parts. That parts maker then sends its products to Iran, where the buyer pays Iranian petrochemicals companies. He declined to name any of the companies involved. Bartering deals with Iran were common during sanctions for non-oil products, but they weren't expected to remain as a means of doing business after sanctions. Energy transactions "have not taken place as quickly as we would have wished," Amir Hossein Zamininia, Iran's deputy oil minister for international affairs, said. "Some major banks are being too cautious...because they have been terrorized by the United States' Treasury in the past." In a statement, a Treasury Department spokesman said that President Barack Obama, Secretary of State John Kerry and Treasury Secretary Jack Lew "have all been very clear that we are not standing and will not stand in the way of permissible business activities involving Iran." Mr. Zamininia said deals are getting "resolved case by case. It is a question of time." Mr. Kerry met with European banking leaders in London last week to address their concerns about doing business with Iran. He said European banks could open accounts for Iran, lend money there and fund programs--as long as the money isn't in dollars and doesn't go to entities designated as supporting terrorism. No big banks, though, have stepped forward since to announce new deals related to Iran. "They worry about compromising their business in the U.S.," said William Breeze, a lawyer at U.K. firm Herbert Smith Freehills. The workarounds that energy companies have so far found come at a cost. Smaller banks tend to charge more for their services, handle a more limited range of transactions, and be less creditworthy than their major peers, Iran trade professionals say. The speed with which energy companies can return to Iran will have powerful implications for world oil markets. Iran's crude production fell from more than 4 million barrels a day to less than 2.8 million barrels a day after the U.S. and the European Union tightened sanctions on the Islamic Republic's nuclear program in 2010. Wood Mackenzie, the U.K. energy consultancy, said in an April report that Iran's current production capacity is only 3.7 million barrels a day--just a little more than the 3.6 millions barrels the International Energy Agency says it is pumping now, and far below its targets of about 4 million barrels. Iran, a member of the Organization of the Petroleum Exporting Countries, has said it won't cooperate with the cartel on output until it reaches 4 million to 4.2 million barrels a day of production, a decision that has weighed on oil prices. "To go beyond this level, Iran's oil fields will need targeted investment and modern recovery techniques," Wood Mackenzie said. Sarah Kent in London contributed to this article. Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 179 1245134
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791245134?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Norway's Oil Activity to Continue to Fall in 2017; Oil companies in Norway, Western Europe's largest oil exporter, expect to slash spending for the third consecutive year in 2017 as they continue to downsize.
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
Norway's oil sector increased spending by 73% between 2010 and 2014, as high and stable oil prices enabled companies to develop projects previously seen as unprofitable, but capacity constraints in the global oil-field services industry fueled costs to unprecedented levels.
Full text: OSLO--Oil companies in Norway, Western Europe's largest oil exporter, expect to slash spending for the third consecutive year in 2017 as they continue to downsize, delay projects and cut costs, an official survey showed Thursday. Oil companies operating in Norway expect to spend 153.2 billion kroner ($18.47 billion) on exploration and production next year, the weakest figure since 2011 and nearly a third below the sector's all-time high of NOK220.7 billion two years ago. In 2016, they expect to spend NOK165.9 billion on exploration and production, down from NOK195.4 billion a year earlier and 1% below a similar estimate made in February. Lower oil-sector spending is set to damp the Nordic country's growth, as oil and gas constitute nearly a fifth of its gross domestic product and nearly 40% of its export revenue. Although the Brent oil price picked up to $50 a barrel on Thursday, from below $30 a barrel in January, it remains more than 50% cheaper than two years ago, and the global oil sector is delaying projects and slashing jobs to reduce costs. The spending estimate was roughly in line with what analysts had expected. DNB Markets had forecast spending would drop to around NOK155 billion next year, and Nordea Markets had the figure at NOK151 billion. The Norwegian Oil and Gas Association said in a report last year that it expected oil-sector spending to bottom out at NOK132 billion in 2017 and start to pick up in 2018. Norway's oil sector increased spending by 73% between 2010 and 2014, as high and stable oil prices enabled companies to develop projects previously seen as unprofitable, but capacity constraints in the global oil-field services industry fueled costs to unprecedented levels. Norway produced 3.92 million barrels of oil equivalent a day in 2015, up slightly on the prior year but 14% below the peak a decade earlier. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Cost reduction
Location: Norway Western Europe
Company / organization: Name: Nordea Markets; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791258234
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791258234?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
OPEC Likely to Choose New Secretary-General Next Week; Abdalla Salem el-Badri has been set to retire since 2013 but has stayed on because the fractious oil cartel has been unable to agree a new leader
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
Agreeing on a new secretary-general would be a litmus test for the cartel's fragile sense of unity, after talks to calm the oil market have collapsed in quarrels, said OPEC representatives who attended a series of meetings in Vienna this week ahead of the June 2 gathering.
Full text: VIENNA--The Organization of the Petroleum Exporting Countries is likely to choose a new secretary-general at its meeting next week, the only concrete action the cartel is expected to take, said national delegates of the group. The 13-nation group that controls more than a third of the world's crude-oil output has been unable to agree on much since petroleum prices began a long swoon nearly two years ago. Once able to swing production up or down to influence prices, OPEC has stayed on the sidelines during this downturn as an American oil boom floods the market and prices remain far below what the group's members want . OPEC is now zeroing in on a replacement for its current secretary-general, Abdalla Salem el-Badri, who has been set to retire since 2013 but has stayed on because the fractious oil cartel hasn't been able to agree on a new leader. Agreeing on a new secretary-general would be a litmus test for the cartel's fragile sense of unity, after talks to calm the oil market have collapsed in quarrels, said OPEC representatives who attended a series of meetings in Vienna this week ahead of the June 2 gathering. "This should give us an idea if things are getting smoother or even tougher than before," said one OPEC delegate. Price of a Barrel by Country The secretary-general doesn't have real power in OPEC, like the Saudi Arabian oil minister, for instance, but his role as a broker often helps smooth differences within the group. Mr. Badri, a Libyan, is seen as a neutral observer in the internal rivalries dividing OPEC between Saudi Arabia and Iran and richer countries like Kuwait and poorer ones like Venezuela. OPEC member Nigeria has nominated Mohammed Barkindo, a former group managing director of the country's state-owned oil company, a spokesman said. Mr. Barkindo once worked as acting secretary-general of OPEC. Meanwhile, Venezuela, one of the most vocal OPEC members, is pushing for one of its own countrymen, Ali Rodriguez, a long-serving OPEC representative for the Latin American nation, according to OPEC delegates. Indonesia, which rejoined OPEC in December, is also considering fielding a secretary-general candidate, according to OPEC and Indonesian representatives. An Indonesian oil ministry spokesman declined to comment. After meetings here in Vienna at OPEC's headquarters, OPEC officials from Iran, Saudi Arabia and other Persian Gulf members said they supported Mr. Barkindo because of his experience and because he comes from an African country that doesn't generally choose sides in Middle East power struggles. I Made Sentana contributed to this article. Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon and Summer Said
Subject: Cartels; Price increases
Location: Venezuela Iran Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791290079
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791290079?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The Oil Rally: What Comes After $50; Prices could still rise in the short term though long-term outlook is subdued
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract: None available.
Full text: Drip, drip, drip. The leak in the world oil market is getting annoying, helping to push crude prices above $50 a barrel for the first time this year. So where do we go from here? While demand is a slow-moving beast, supply sometimes isn't. Despite near-record inventory, traders are right to price in the risk of the market getting tighter in a hurry. That means prices could still rise in the short term, even though the long-term outlook remains more subdued. In other words, while $60 oil is a distinct possibility in coming months, the market is far from its heyday. Producers may not even be budgeting for $50. Canada's wildfires have had the biggest individual impact on supply, taking about one million barrels a day offline. But the fires' effect is transitory. Far less predictable is Nigeria, where estimates range from 600,000 to 800,000 barrels a day of exports lost due to militant activity in the restive Niger Delta and elsewhere. If militants' boasts are anything to go by other, previously "safe" export sources may be at risk. And then there is Venezuela. While power outages and rapid inflation haven't crimped the country's crude exports yet, two emerging factors might. One is the exasperation of vital service providers such as Halliburton and Schlumberger, both of which recently said they were cutting back activity due to unpaid bills. Plus, there are fears of outright social unrest following President Nicolás Maduro's declaration of a state of emergency earlier this month. Venezuela exports about 1.7 million barrels a day. Output there was crippled by a strike in 2002 and 2003. With oil production outages at their highest level in several years, excess global production of about 1.3 million barrels a day has been erased for now. That comes as U.S. shale output is finally in steady decline and well over one million barrels a day of planned conventional projects world-wide have been shelved. A temporary deficit can't be ruled out. That won't mean a physical shortage because commercial and strategic inventories now exceed 4.5 billion barrels globally. That acts as an unprecedented shock absorber. On the other hand, the ability of producers to step in and plug a shortfall somewhere else in the world--so-called spare capacity--may be at its lowest in years. Saudi Arabia traditionally maintained the most idle production capacity but has less than in the past. Analysts at RBC Capital Markets wrote this week that exceeding 11 million barrels a day in the short term would be a stretch. It now produces 10.2 million barrels daily. Oil prices moved back above $50 a lot quicker than oil producers expected and they probably aren't rushing to boost their long-term expectations quite yet. That is prudent, but those in the energy pits are focused on what happens at the margin. They need to watch the headlines and brace for even higher prices. Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791366042
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791366042?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The New Oil Traders: Moms and Millennials; Rebound in crude prices draws investors to exchange-traded products; 'the swings are gigantic lately'
Author: Eisen, Ben; Friedman, Nicole; Vaishampayan, Saumya
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
CME Group Inc., the world's largest futures-market operator, estimates that crude oil has been its second-most traded contract among retail investors this year after a contract tied to the S&P 500, and such investors make up about 10% of daily trading volume in oil, a record high, said Mark Omens, executive director of retail sales at CME. An energy-industry software consultant who studied finance in college, he has traded oil and natural-gas exchange-traded products a few times using a smartphone app called Robinhood.
Full text: When Erika Cajic woke before dawn one morning in early May and read that wildfires were breaking out in an oil-producing region of Alberta, she sat down on the family room couch with a cup of hot chocolate and her laptop and bought shares of an investment linked to crude. The 45-year-old full-time parent of two in Mississauga, Ontario, like many investors, reasoned that the production outages would drive up the price of oil. By buying the VelocityShares 3x Long Crude Oil exchange-traded note, she tripled down on her hunch, as the product uses derivatives that aim to rise and fall at triple the daily change in oil. Within about four days, she estimated she made about 500 Canadian dollars (US$384) on those trades after converting from U.S. dollars. "The swings are gigantic lately," she said of the product, known by its ticker UWTI, and the other energy products she has traded in recent months. Read More * Crude Retreats From $50 * Oil Poised to Hit Sweet Spot * Where Are Oil Prices Headed Next? For some individual investors, crude is the new hot trade. Oil in the U.S. fell to its lowest level since 2003 in February but has surged roughly 90% since then. On Thursday, it traded above $50 a barrel for the first time since October, before easing Friday . That compares with a stock market that has offered nowhere near that momentum. "I just thought, let's throw a couple of hundred dollars in it...and try it out," said Matt Krasnoff, 26, of New York, who bought shares of UWTI last year after hearing about it from a friend. "I just enjoy the risk and the thrill of the market in general." CME Group Inc., the world's largest futures-market operator, estimates that crude oil has been its second-most traded contract among retail investors this year after a contract tied to the S&P 500, and such investors make up about 10% of daily trading volume in oil, a record high, said Mark Omens, executive director of retail sales at CME. Total assets in the 15 U.S. exchange-traded products that track crude, including UWTI, hit a record $8.5 billion in early March and had nearly $8 billion Wednesday, according to Bianco Research LLC, which specializes in investment analysis. That figure doesn't distinguish between retail and institutional investors, which also have a large presence in the market. Brokerages are keen to make sure that if traders lose money in these products, which can happen quickly, they are aware of that possibility. Some have spilled hundreds of words detailing the inner workings and risks of such products, which are prone to large daily percentage moves, even into the double digits. Frederick Bailey, 59, of Savannah, Ga., said he put a modest amount of money in UWTI in January as crude broke below $30 a barrel and rode it higher as oil prices rebounded. Mr. Bailey, who said he is between jobs, once worked at banks that dealt with exchange-traded funds. Mr. Bailey also visits online chatter sites talking about oil, such as StockTwits, where one poster this week wrote: "...once again the crude been rude to this dude." Millennials are also fans of crude-related trading, said Howard Lindzon, chairman and chief executive officer of StockTwits. UWTI and the VelocityShares 3x Inverse Crude Oil ETN, which bets on oil to decline, were the second- and third-most-visited pages during the first quarter on StockTwits, prompting the company to sell a T-shirt with the two tickers on the front. Grant Heimer, a 25-year-old in Dallas, trades stocks as a hobby and learned about commodity exchange-traded products from his friends last year, he said. An energy-industry software consultant who studied finance in college, he has traded oil and natural-gas exchange-traded products a few times using a smartphone app called Robinhood. "Oil just seemed to make a lot of sense to me," said Mr. Heimer. He has never held a position longer than five days and still has most of his portfolio in stock investments. Most of his oil trades made money, he said, but not all. "I'm not careless," said Mr. Heimer. "It's a very appealing thing to do for somebody like me who's OK with a small risk and a short amount of time." Some have ventured into selling the underlying futures contracts, where retail investors need permission to access the market. Archna Jagtiani, a 42-year-old who lives in the Chicago suburbs, started trading after the financial crisis. "After 2010 when the market was up...my account had not come back and I was just paying fees," she said. "It's better this way. I cannot blame anybody if I lose money." She said she spends her days trading and tutoring kids in math after the market closes. Ms. Jagtiani used to trade oil exchange-traded products, but a few months ago switched to buying and selling oil-futures contracts because of the quirks of holding some oil exchange-traded products for a long period of time. "If oil goes from $43.50 [a barrel] to $43.70, you've made a hundred bucks," she said of oil futures, which she holds for intervals as short as 15 minutes. Mr. Krasnoff works at LinkedIn Corp. in New York and keeps a list of his investments displayed on Yahoo Finance on his computer screen during the day. He said he typically invests in technology companies that he is familiar with and reads articles about the industry and watches Twitter to stay up to date. He ditched UWTI within a few months of trying it, after he lost money. "It was outside of the realm of what I knew...the last straw was realizing that I wasn't informed enough," he said. Now, he says, he is going to stick to investing in what he knows, like tech. Write to Ben Eisen at ben.eisen@wsj.com , Nicole Friedman at nicole.friedman@wsj.com and Saumya Vaishampayan at saumya.vaishampayan@wsj.com Credit: By Ben Eisen, Nicole Friedman and Saumya Vaishampayan
Subject: Crude oil prices; Institutional investments; Crude oil
Location: United States--US
Company / organization: Name: CME Group; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791366066
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791366066?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Stree t Journal
Oil Prices Poised to Hit Sweet Spot for Global Economy; Range of $50 to $60 a barrel represents 'goldilocks' scenario for consumers, industry and the oil industry alike
Author: Sparshott, Jeffrey; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
Related * The New Oil Traders: Moms and Millennials * Oil Touches $50 on Easing Supply-Glut Fears * How High Can Oil Prices Go? * Iran's Oil Deals Hit Banking Snag U.S. prices ended slightly lower Thursday at $49.48 a barrel. Since hitting a 13-year low in February, U.S. crude has climbed 89% in 73 trading days, the sharpest rise since an increase of 92% between February and May of 2009.
Full text: The most powerful oil rally in seven years pushed crude prices above $50 a barrel on Thursday, a level that eases pressure on producers while being low enough to keep consumers happy at the gas pump. Crude prices briefly rose above $50 a barrel in intraday trading Thursday, a level they haven't reached since October, continuing a jagged rise over the last three months. A sustained price at or slightly above $50 isn't high enough to spur energy companies to spend again on big projects but offers some relief after almost two years of swooning prices. It is also a price low enough to boost economic growth in many countries, including the U.S. If oil prices remain above $50, that would help to counteract some of the impact to the broader U.S. economy from energy-firm layoffs and defaults, while not being a steep enough rise to cripple the most fuel-reliant industries, such as airlines and railroads. A recovery at those levels would also still leave extra money in U.S. consumers' budgets compared with recent years. Related * The New Oil Traders: Moms and Millennials * Oil Touches $50 on Easing Supply-Glut Fears * How High Can Oil Prices Go? * Iran's Oil Deals Hit Banking Snag U.S. prices ended slightly lower Thursday at $49.48 a barrel. Since hitting a 13-year low in February, U.S. crude has climbed 89% in 73 trading days, the sharpest rise since an increase of 92% between February and May of 2009. For major oil-producing and other commodity-focused countries, the latest rebound is too small to bring much of a boost but could cushion some from even greater turmoil. It is likely to trigger sighs of relief among officials in struggling economies such as Angola, Nigeria and Venezuela, along with the big Middle East producers such as Saudi Arabia. Other emerging-market economies hit hardest by capital outflows due to depressed commodity sectors could find their footing. "Prices in the $50 to $60 range would be high enough to ease some of the pressure on producers, while still low enough to boost spending on other goods and services," Julian Jessop, chief global economist at Capital Economics, wrote in a note Thursday. Such a recovery could also be enough to relieve pressure on central bankers in the U.S. and around the world who have seen inflation stuck below their targets for years. That could allow the Federal Reserve to slowly increase interest rates, while keeping them low enough to maintain economic growth. "If oil prices and the dollar remain broadly stable, inflation should move up further over time to our 2% objective," Fed governor Jerome Powell said Thursday. Even though U.S. gasoline is one-third more expensive than it was in February, when oil futures crashed, it is still cheaper than when oil last touched $50, and a sustained rise above $50 a barrel would still leave gasoline prices well below their levels from 2014, when a gallon of regular unleaded averaged nearly $3.36 in the U.S., according to the U.S. Energy Information Administration and the Oil Price Information Service. The near-record 34 million U.S. drivers who are planning road trips this Memorial Day weekend are likely to pay the lowest gasoline prices during that holiday in 11 years, according to the American Automobile Association. Cheaper gasoline has helped prop up consumer spending, albeit at relatively modest levels compared with previous oil-price busts. Lower fuel costs are cushioning Americans who are constrained by disappointing wage growth, higher health-care expenses and fast-rising rents. Research shows the small windfall in recent years was frequently used at restaurants, grocery stores and on other forms of entertainment. Vehicle miles traveled and automobile purchases also have hit records, led by SUVs and other big vehicles. A rise in prices to between $50 and $60 also would be moderate enough for the industries that depend most heavily on oil to handle. While airlines increasingly have shied away from hedging their fuel consumption, and will have to pay more for fuel if prices remain higher, they also have stressed that they can handle higher fuel prices, given the extensive restructuring, consolidation and product improvements that have transformed the industry in recent years. For the energy companies that have been punished by the price collapse, a recovery at this level is likely not enough to spur new investment, and there are signs that many big companies will continue cutting back into 2017. The world's largest helicopter operator said Thursday that it expects energy-related work to decline further and said for the first time that it may cancel some orders for new aircraft. Bristow Group Inc. Chief Executive Jonathan Baliff said continuing uncertainty led the company to shelve plans to provide full-year profit guidance, as oil and gas companies cut back on exploration and production and reduce their demand for flying. The world's biggest oil companies are in no hurry to resume expensive, long-term projects, which require higher prices to be profitable. "We have to be careful about $50 oil being a red herring," said Bernstein analyst Nicholas Green. "The major oil companies are going to remain extremely cautious. They are not going to be able to find many projects that are as economically viable as they want them to be at $50 a barrel, and that may even be true at $60." According to analysis by Macquarie, just two significant new developments were sanctioned last year, compared with a normal level of around 15 a year. Macquarie predicts a similarly low number this year. Hans Jakob Hegge, chief financial officer at Norway's Statoil ASA, said in an interview that 2017 could mark a third year of cuts across the industry. Mr. Hegge said companies are paying closer attention to maintaining their profits, rather than boosting production no matter the cost--a departure from previous cycles. Oil hitting $50 a barrel may boost some smaller producers in places like the U.S. shale fields, sending their projects into the black. But many American producers have said $50 oil won't spur them to rush out and tap new wells. On recent calls with investors to discuss financial performance, two of the biggest U.S. shale producers spelled out differing views. Pioneer Natural Resources Co., active in west Texas, said $50 oil would spur it to put drilling rigs back to work, albeit on a small scale. But the head of EOG Resources Inc. said that while the effects of the energy downturn are starting to ease, it will take at least another year--and significantly higher crude prices--for the U.S. oil and gas industry to recover. "In the U.S. it will take a sustained $60 to $65 oil price and 12 months of lead time for the industry to deliver a modest level of growth," said Bill Thomas, chief executive of EOG. Sarah Kent and Erin Ailworth contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com and Riva Gold at riva.gold@wsj.com Credit: By Jeffrey Sparshott and Georgi Kantchev
Subject: Gasoline prices; Consumers; Crude oil prices; Economic growth; Energy industry; Rents
Location: United States--US
Company / organization: Name: Pioneer Natural Resources Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791388834
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791388834?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Drivers Won't Suffer at Gas Pump From Oil's Rise; Even as crude oil prices hit $50, motorists likely to pay lowest Memorial Day gasoline prices in 11 years
Author: Sider, Alison; Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
Gasoline prices also usually peak around Memorial Day as refineries end traditional spring maintenance and run hard to fill the higher demand in the summer-driving season, analysts said.
Full text: The sharpest rise in oil prices in seven years isn't expected to bring much pain at the gas pump. Even as crude oil prices hit $50 a barrel on Thursday, after having fallen below $27 about three months ago, a near-record 34 million U.S. drivers are planning a road trip this holiday weekend, according to AAA. They are likely to pay the lowest Memorial Day gasoline prices in 11 years. Gasoline prices are 16% cheaper today than the last time oil was at $50 a barrel in November. Refineries have been running hard this year, with fewer outages than a year ago. That keeps gasoline supplies healthy and blunts the impact of rising crude prices. "This isn't going to be the next gasoline apocalypse," said Tom Kloza, global head of energy analysis at the Oil Price Information Service. Gasoline is more expensive than it was three months ago, with the national average for regular now at $2.31, according to AAA. Pump prices are up 33% from their recent low in mid-February, which came just as oil futures crashed to their own 13-year low. But that rebound in gasoline prices hasn't been as severe as the 89% rise in crude prices over the same period. One Houston resident, Javier Abundis, said Thursday he still isn't worried about fuel prices, though he drives an SUV. He's planning a trip to Mexico next week and thinks the drive will probably cost only $140 round trip. "It's cheap," he said. "I know it's not going to last, so we just try to enjoy it." U.S. households are still likely to save $160 billion in 2016 compared with what they spent on gasoline two years ago, when oil prices were more than $100 a barrel, according to Jason Thomas, director of research at private-equity firm Carlyle Group. The savings is equivalent to a 2.6% raise in the median household income of $51,900 in 2014, according to Citigroup. AAA estimates the savings at about $700 per licensed driver, even with crude prices on the rise. There is often a lag between rising oil futures prices and those at the filling station. But many analysts don't expect gasoline prices to go up fast enough to dissuade Americans from driving or buying cars at what has been a record pace this year. Many who predict record consumption and vehicle purchases this year had also expected oil futures to rise above $50. About half of the drivers surveyed recently by AAA said that $2.50 a gallon would be "too high" a price for gasoline. Retail prices jump about 25 cents for every $10 change in crude futures, according to AAA, so oil would have to get to nearly $60 a barrel for drivers to start to balk at the cost of filling up. It may never get there this year. Many U.S. oil producers have planned to sell production or increase output as oil breaches $50 and nears $60, so some analysts expect that will cap the rally soon. Gasoline prices also usually peak around Memorial Day as refineries end traditional spring maintenance and run hard to fill the higher demand in the summer-driving season, analysts said. "Don't cry for consumers," Mr. Thomas said. "They'll do just fine." Write to Alison Sider at alison.sider@wsj.com and Timothy Puko at tim.puko@wsj.com Credit: By Alison Sider and Timothy Puko
Subject: Crude oil prices; Gasoline prices; Crude oil; Cost control; Memorial Day; Petroleum refineries
Location: United States--US
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Carlyle Group; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791447080
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791447080?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Most Canadian Banks Post Stronger-Than-Expected Profits; Effects of lower oil prices on the Canadian economy have yet to fully manifest, analysts say
Author: Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
"The sustained low oil price resulted in credit losses in our oil and gas loan book and in the unsecured retail portfolios of oil-exposed regions," said RBC Chief Executive Dave McKay on a conference call.
Full text: Soured energy loans are piling up at Canada's biggest banks, but most lenders still posted stronger-than-expected profits for the fiscal second quarter. Royal Bank of Canada, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce trumped analyst forecasts for the February-to-April quarter, while Bank of Montreal's profit fell shy of views. Bank of Nova Scotia will close out the industry's earnings season next week. Despite a string of mostly higher profits, banks recorded an upswing in impaired energy loans in the latest quarter. The four lenders that have reported to date recorded a total of 2.37 billion Canadian dollars ($1.82 billion) in impaired oil and gas loans, comprising roughly 8.4% of their total energy portfolios, according to an analysis by brokerage Edward Jones. Although Canadian lenders continue to sidestep much of the fallout from the commodity-price rout, analysts warn the effects of lower oil prices on the Canadian economy have yet to fully manifest. In addition to distressed energy borrowers, there are signs consumers in oil-producing regions such as Alberta are struggling to pay back their debts, including credit-card bills. Against that backdrop, RBC, CIBC and BMO took bigger provisions for credit losses on a quarter-over-quarter basis. "The sustained low oil price resulted in credit losses in our oil and gas loan book and in the unsecured retail portfolios of oil-exposed regions," said RBC Chief Executive Dave McKay on a conference call. "Overall, these losses are within our expectations." Canada's banks have stressed that energy loans account for only a fraction of their total loan books. At 3.6% of total loans, Scotiabank has the biggest direct oil and gas exposure. The four lenders who have reported second-quarter results so far--RBC, TD, CIBC and BMO--together held a specific allowance, or loss reserve, of C$458 million against commercial oil and gas exposures, according to Edward Jones analyst James Shanahan. "This represents 19.3% of impaired loans but still only 1.6% of outstanding oil and gas loans," he wrote in an email. "The current level of loss reserves for the Canadian banks could prove to be insufficient from a loss severity perspective," he added, noting the rebound in energy prices may not be sufficient to save financially strapped energy firms. Earlier this year, Canadian banks faced criticism that they hadn't amassed enough reserves to cover soured loans to the energy sector. On Thursday, however, RBC, CIBC and TD signaled they were preparing for tougher times ahead by fattening their so-called collective allowances, or rainy day reserves that cushion against unspecified future potential credit losses. "Overall, we've been saying for some time that we expect credit to be a headwind to earnings this year given the benign PCL [provisions for credit losses] rates we reported in 2015," said TD Chief Executive Bharat Masrani on an afternoon conference call. "However, we remain comfortable that we are adequately reserved and losses will be manageable," he added. Overall, it has been a strong fiscal second quarter for Canadian lenders. RBC, Canada's largest bank by assets and one of three big banks to report on Thursday, posted a better-than-expected profit of C$2.57 billion , or C$1.66 a share. Quarterly profit for TD, Canada's No. 2 bank, increased 10% to C$2.05 billion , or C$1.07 a share. And CIBC, Canada's fifth-largest lender, posted a net profit of C$941 million, or C$2.35 a share, in its latest quarter. Earlier this week, BMO reported a slight drop in earnings to C$973 million , or C$1.45 a share. Its results fell shy of analyst expectations. Write to Rita Trichur at rita.trichur@wsj.com Credit: By Rita Trichur
Subject: Profits; Financial performance; Banking industry; Loans; Bank reserves; Energy industry; Natural gas reserves; Oil reserves
Location: Canada
People: Shanahan, James
Company / organization: Name: Scotiabank; NAICS: 522110; Name: Edward D Jones & Co; NAICS: 523120; Name: Canadian Imperial Bank of Commerce; NAICS: 522110; Name: Bank of Nova Scotia; NAICS: 522110; Name: Bank of Montreal; NAICS: 522110; Name: Toronto-Dominion Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791447128
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791447128?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Str eet Journal
Offshore Driller Rowan's Executives to Take Pay Cut; Seven senior executives to take 10% salary cut as show of 'good faith' amid oil-price downturn
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
According to a regulatory filing, the Houston company's seven senior executive officers had requested their base salary be cut for the year.
Full text: Offshore driller Rowan Cos. PLC's top executives have agreed to a voluntary 10% salary cut starting July 1 as a show of "good faith" during the oil-price downturn . According to a regulatory filing, the Houston company's seven senior executive officers had requested their base salary be cut for the year. The reduction would also affect stock awards and other benefits that are calculated based on salary. Related * Oil Prices Poised to Hit Sweet Spot for Global Economy * The Energy Companies for Which Oil Rebound Came Too Late (May 16) * Transocean Swings to a Quarterly Profit as Cost-Cutting Offsets Revenue Decline (May 4) Chief Executive Thomas P. Burke's base salary was $800,000 in 2015, while Executive Chairman W. Matt Ralls made $700,000. Rowan offers offshore contract drilling services to oil and gas companies around the world, focusing on high-specification and premium jack-up rigs and ultra-deepwater drillships. At the end of the year, it had 31 mobile offshore drilling units. The company, which has recorded about $900 million in impairments over the past two years, has retired rigs or taken them out of service for extended periods, known in the industry as "cold stacking," to cut costs. For the first three months of the year, Rowan reported a slight profit decline as revenue fell nearly 9%. Companies across the energy industry have been battered by sharply lower crude oil prices over the past two years, forcing them to slash spending and, in some cases, to seek bankruptcy protection . This month, Switzerland-based Transocean Ltd., which has the world's largest fleet of offshore drilling rigs, offset a 35% revenue drop through more than $900 million in cost cuts. Shares of Rowan closed Thursday at $16.69, down 26% over the past 12 months. Credit: By Maria Armental
Subject: Profits; Offshore drilling; Cost reduction; Crude oil prices; Energy industry; Natural gas utilities
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791456660
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791456660?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Unsecured Creditors Ask Judge to Reject Sabine Plan; First Reserve formed the oil company with Nabors Industries in 2007
Author: Corrigan, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract: None available.
Full text: Sabine Oil & Gas Corp.'s creditors are making a last-ditch effort to block the First Reserve Corp.-backed company's restructuring plan ahead of a final bankruptcy court hearing on the proposal next month. In court papers filed Wednesday, lawyers for the oil company's unsecured creditors asked Judge Shelly Chapman of the U.S. Bankruptcy Court in Manhattan to reject the blueprint for Sabine's reorganization, citing "fundamental flaws" in the valuation of the company's assets that tilt the plan in favor of senior lenders. Unsecured creditors, owed about $1.4 billion, say Sabine has burned through about a quarter of a billion dollars in cash to craft a plan that leaves then with equity worth about $6.8 million, which amounts to a fraction of a penny on the dollar of what they're owed. Unsecured creditors say the actual assets available to repay them could total as much as $268 million. Sabine hasn't yet filed a response to the creditors' objection. A lawyer for Sabine couldn't immediately be reached for comment Thursday. Under the bankruptcy-exit plan, which has already survived a number of legal battles, senior lenders will swap their debt for about 93% of the equity in the reorganized business. The final bankruptcy-court hearing on the deal is scheduled to begin June 13. The dispute with unsecured creditors centers on the valuation of Sabine's assets and on which assets count as senior lenders' collateral. Lawyers for the unsecured creditors say Sabine hasn't taken administrative costs and other factors into account. The creditors, who have pushed for a sale of the business, also say oil prices have increased significantly since Sabine's experts last valued its assets. Sabine's figures will be nearly three months old by the time its restructuring plan goes up for final court approval, court papers show. Unsecured creditors are also objecting to liability releases written into the plan that aim to protect the company, its lenders and a host of others from lawsuits after the bankruptcy comes to a close. Several other junior creditors joined in objecting to Sabine's plan, including oil billionaire T. Boone Pickens, who sued Sabine last year over pipeline infrastructure that he says was installed on his property "without authority and without seeking the consent." Sabine could still reach a broad settlement with creditors. Judge Chapman ordered all sides to mediation on June 3, led by Judge Robert Drain. But if mediation fails, opposition from unsecured creditors could mean a lengthy and contentious hearing on the plan. Sabine, which explores and develops onshore oil and gas properties in both Texas and Louisiana, filed for bankruptcy in July to restructure some $3 billion in debt. The company, formerly NFR Energy LLC, was formed in 2007 as a joint venture between First Reserve and Nabors Industries Ltd. Nabors later exited its stake. Credit: By Tom Corrigan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 17 91469043
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791469043?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Dai's Take: Some Private-Equity Activity in the Oil Patch Picks Up; New capital inflows, however, might undermine recovery in prices that firms had welcomed
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 May 2016: n/a.
Abstract:
"Oil prices have rebounded, and the market psychology indicates that there may be price support beneath what we have now," said Christopher Manning, a Trilantic North America managing partner who leads the firm's energy team.
Full text: Welcome to the new WSJ Pro PE Check out our new website, http://www.wsj.com.ezproxy.uta.edu/pro/privateequity , for data, infographics and a 10-year archive of stories. Some Private-Equity Activity in the Oil Patch Picks Up In the past few months, several private-equity firms have ramped up their activities in the oil patch. Denham Capital Management LP recently backed a new oil and gas venture with $300 million. Lime Rock Resources closed a $754 million fund. Trilantic Capital Management LLC has opened a Texas office, invested $300 million in a natural-gas producer, and formed an energy advisory board. Underlying all these activities is a view that oil and gas prices are bound to recover from their recent lows. Oil prices briefly rose above $50 a barrel Thursday. "Oil prices have rebounded, and the market psychology indicates that there may be price support beneath what we have now," said Christopher Manning, a Trilantic North America managing partner who leads the firm's energy team. The wide gaps between the price expectations of sellers and buyers also have narrowed, prompting more transactions. Mike Marziani, chief financial officer of Tall City Exploration II LLC, a recent Denham investment, said the opportunity set his company sees has "broadened" since last year. The ramped-up activities, however, threaten to contribute to a self-defeating cycle. Consider the economic principles at work here: Sustained low prices push out high-cost producers, reducing supply. This brings supply better in line with demand, creating a new equilibrium for price-setting. The recovery in prices, meanwhile, stands to encourage supply and depress demand until another balance is reached. In other words, the increased supply brought by private equity and other oil and gas players could undermine the very recovery that they so welcomed. So why did private-equity practitioners behave in a way that seems to defy economic principles? Experienced energy investors all follow their own play books, approaching risks and modeling prices differently. They also have different return expectations. The management teams the firms back may have experience in certain oil and gas basins that other teams are less familiar with. For instance, Tall City, Denham's recent investment, focuses on the Permian basin. Trilantic has its sights on three more basins in addition to the Permian: the South-Central-Oklahoma-Oil-Province play, the Cotton Valley/Haynesville shale, and the Denver-Julesburg basin. Now maybe more than ever, investors should be judicious about where to put their money to work, as not all basins are created equal. "There are more basins that don't work than those that do work," said Trilantic's Mr. Manning. WEDNESDAY, JUN 1 -- Orange County Employees Retirement System WEDNESDAY, JUN 1 -- Oregon Investment Council THURSDAY, JUN 2 -- Minnesota State Board of Investment Send us your tips, suggestions and feedback. Write to: Yolanda Bobeldijk ; Laura Cooper ; Chris Cumming ; Shasha Dai ; Jessica Davies ; Braden Kelner ; Laura Kreutzer ; Dawn Lim ; William Louch ; Mike Lucas ; Amy Or ; Becky Pritchard ; David Smagalla ; Chitra Vemuri . Follow us on Twitter: @YEBobeldijk , @LCooperReports , @ShashaDai1 , @JessicaMillsDav , @bradenkelner , @LauraKreutzer , @dawnmlim , @william_louch , @Lucastoons , @beckspritchard , @DSmagalla_DJ
Subject: Acquisitions & mergers; Prices; Equity; Natural gas; Private equity
Location: Texas
Company / organization: Name: Denham Capital Management LP; NAICS: 523910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 26, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791480516
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791480516?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Falls Below $50 on Profit-Taking; OPEC Meeting in Focus; July Brent crude fell $0.43 to $49.16 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 May 2016: n/a.
Abstract:
"The $50 mark was a psychological barrier and not a true reflection of what's happening in the supply and demand of the market," said Gao Jian, an energy analyst at SCI International.
Full text: Crude oil prices were below the $50 threshold during early Asian trade Friday, thanks to profit-taking and a stronger dollar, after breaching the key milestone the day before. The earlier upswing, stoked by a weaker greenback and the unexpected drawdown in U.S. crude inventories last week, lasted less than a day as higher oil prices stirred up concerns that some previously marginalized producers would restart or ramp up production as prices ascend. "The $50 mark was a psychological barrier and not a true reflection of what's happening in the supply and demand of the market," said Gao Jian, an energy analyst at SCI International. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $49.11 a barrel at 0303 GMT, down $0.37 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.43 to $49.16 a barrel. Rise in the U.S. dollar also stifled oil prices from advancing. The WSJ dollar index last showed the greenback was up 0.1% at 87.44. The dollar has gained 2.8% since early May, according to the U.S. dollar index. Analysts say the greenback could rise further in anticipation of a U.S. interest rates rise, as early as June or July. As oil is pegged to the dollar, a strong greenback doesn't bode well for traders using different currencies. Despite the recent retreat, prices are still up nearly 90% from a 13-year low in February, thanks to disruption to production in places like Canada and Africa. Production in China and U.S. have also been sliding. Last week, U.S. crude output fell 8% on-year to 8.8 million barrels a day. In China, output dropped 5.6% in April. However, these shortfalls are being offset by increasing production by members of the Organization of the Petroleum Exporting Countries. In April, global oil supplies rose by 250,000 barrels a day while OPEC production rose by 330,000 barrels a day, driven by Iran, Iraq and the United Arab Emirates, the International Energy Agency said in a report earlier this month. "As long as oil prices retains the upward momentum, OPEC will see less reason to freeze or cut production in the upcoming meeting," said a Singapore-based fuel oil trader. In the last OPEC gathering in mid-April, members failed to agree on a production cap. While the market was not surprised by the discord, the prospect of a world further drenched in oil weighed on sentiment. The next OPEC meeting is scheduled for June 2 in Vienna, Austria. Tim Evans, a Citi Futures analyst said that while an agreement to freeze or reduce output is still unlikely, it would "leave open the possibility of a further increase in OPEC total production" as Iran, Kuwait, Iraq and Saudi Arabia are expected to roll out more barrels. Together, production by these countries made up around 63% of OPEC's total production in April, based on data in the OPEC May report. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 33 points to $1.6162 a gallon, while June diesel traded at $1.4938, 75 points lower. ICE gasoil for June changed hands at $443.25 a metric ton, down $5.00 from Thursday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; American dollar; Futures
Location: United States--US China
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 27, 2016
Section: Markets
Publisher: Dow Jones & Compa ny Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791531258
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791531258?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Hurdles Remain for Iran Oil Deals
Author: Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 May 2016: B.2.
Abstract:
After running into banking hurdles, some European companies are setting up complex bartering arrangements to buy Iranian petrochemicals, bypassing the Western banking system altogether, said Ali Mohammad Bossaghzadeh, the director of production control at Iran's state-run National Petrochemical Co. Under one such arrangement, he said, a European company pays for the Iranian petrochemicals by sending money to a European Union-based maker of spare automobile parts.
Full text: TEHRAN -- Even after the lifting of international sanctions against Iran, long-standing U.S. banking limitations are impeding the country's oil resurgence by forcing energy companies to use small lenders or barter to get their deals done. France's Total SA in February had to arrange payments through three smaller European banks to ship the first exports of Iranian crude to Europe in years, said Mohsen Ghamsari, the director in charge of marketing oil at the National Iranian Oil Co. These banks do little business in the U.S., making them less likely to run afoul of U.S. restrictions. Before international banking sanctions, which started around 2006, Total often used giant French bank BNP Paribas SA for project finance and oil shipments in Iran, according to people familiar with the matter. A BNP representative said the bank is wary of doing business in Iran after getting hit with an $8.9 billion fine for breaching American sanctions last year. Total declined to comment. The U.S. banking restrictions remain in place over Iran's alleged support for terrorism -- which Iran denies -- and its testing of ballistic missiles, which it says is legitimate. The measures ban dollar transactions processed through the U.S. financial system, as well as any dealings with entities accused by the U.S. government of supporting terrorism, human-right violations and long-range missile programs. The restrictions, which date back to the 1990s, have outlived the international sanctions related to Iran's nuclear program, which were lifted in January as a result of a deal between Iran and six world powers. The deal created an opportunity for energy companies in one of the world's biggest oil producers, but the opening has been narrow and fleeting. Energy companies have had to be nimble because the remaining U.S. restrictions ban transactions with Iran in dollars, the currency of choice in the global oil market. But most important, major European banks refuse to take on even legal business for fear of falling foul of U.S. authorities. The smaller banks that Mr. Ghamsari said Total used -- Germany's Europaisch-Iranische Handelsbank AG, Switzerland's Banque de Commerce et de Placements and Turkey's Halk Bankasi -- don't do much business in the U.S. -- if any. BCP declined to comment. EIH said it is helping customers dealing with Iran but declined to provide more details. Halkbank didn't respond to requests for comment. Royal Dutch Shell PLC and BP PLC, which declined to comment, have yet to buy Iranian oil because their banks refuse to deal with the Islamic Republic, Mr. Ghamsari said. After running into banking hurdles, some European companies are setting up complex bartering arrangements to buy Iranian petrochemicals, bypassing the Western banking system altogether, said Ali Mohammad Bossaghzadeh, the director of production control at Iran's state-run National Petrochemical Co. Under one such arrangement, he said, a European company pays for the Iranian petrochemicals by sending money to a European Union-based maker of spare automobile parts. That parts maker then sends its products to Iran, where the buyer pays Iranian petrochemicals companies. He declined to name any of the companies involved. Bartering deals with Iran were common during sanctions for non-oil products, but they weren't expected to remain as a means of doing business after sanctions. Energy transactions "have not taken place as quickly as we would have wished," Amir Hossein Zamininia, Iran's deputy oil minister for international affairs, said. "Some major banks are being too cautious." In a statement, a Treasury Department spokesman said that President Barack Obama, Secretary of State John Kerry and Treasury Secretary Jack Lew "have all been very clear that we are not standing and will not stand in the way of permissible business activities involving Iran." Mr. Kerry met with European banking leaders in London last week to address their concerns about doing business with Iran. He said European banks could open accounts for Iran, lend money there and fund programs -- as long as the money isn't in dollars and doesn't go to entities designated as supporting terrorism. No big banks, though, have stepped forward since to announce new deals related to Iran. --- Sarah Kent in London contributed to this article.
Credit: By Benoit Faucon
Subject: Energy industry; Banking industry; Sanctions; Petroleum industry
Location: United States--US Iran
Company / organization: Name: National Iranian Oil Co; NAICS: 324110; Name: Total SA; NAICS: 447190, 324110, 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2016
Publication date: May 27, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791556334
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791556334?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Rally Drives Oil Closer to Sweet Spot
Author: Sparshott, Jeffrey; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 May 2016: A.1.
Abstract:
U.S. prices ended slightly lower Thursday at $49.48 a barrel. Since hitting a 13-year low in February, U.S. crude has climbed 89% in 73 trading days, the sharpest rise since an increase of 92% between February and May of 2009.
Full text: The most powerful oil rally in seven years pushed crude prices above $50 a barrel on Thursday, a level that eases pressure on producers while being low enough to keep consumers happy at the gas pump. Crude prices briefly rose above $50 a barrel in intraday trading Thursday, a level they haven't reached since October, continuing a jagged rise over the last three months. A sustained price at or slightly above $50 isn't high enough to spur energy companies to spend again on big projects but offers some relief after almost two years of swooning prices. It is also a price low enough to boost economic growth in many countries, including the U.S. If oil prices remain above $50, that would help to counteract some of the impact to the broader U.S. economy from energy-firm layoffs and defaults, while not being a steep enough rise to cripple the most fuel-reliant industries, such as airlines and railroads. A recovery at those levels would also still leave extra money in U.S. consumers' budgets compared with recent years. U.S. prices ended slightly lower Thursday at $49.48 a barrel. Since hitting a 13-year low in February, U.S. crude has climbed 89% in 73 trading days, the sharpest rise since an increase of 92% between February and May of 2009. For major oil-producing and other commodity-focused countries, the latest rebound is too small to bring much of a boost but could cushion some from even greater turmoil. It is likely to trigger sighs of relief among officials in struggling economies such as Angola, Nigeria and Venezuela, along with the big Middle East producers such as Saudi Arabia. Other emerging-market economies hit hardest by capital outflows due to depressed commodity sectors could find their footing. "Prices in the $50 to $60 range would be high enough to ease some of the pressure on producers, while still low enough to boost spending on other goods and services," Julian Jessop, chief global economist at Capital Economics, wrote in a note Thursday. Such a recovery could also be enough to relieve pressure on central bankers in the U.S. and around the world who have seen inflation stuck below their targets for years. That could allow the Federal Reserve to slowly increase interest rates, while keeping them low enough to maintain economic growth. "If oil prices and the dollar remain broadly stable, inflation should move up further over time to our 2% objective," Fed governor Jerome Powell said Thursday. Even though U.S. gasoline is one-third more expensive than it was in February, when oil futures crashed, it is still cheaper than when oil last touched $50, and a sustained rise above $50 a barrel would still leave gasoline prices well below their levels from 2014, when a gallon of regular unleaded averaged nearly $3.36 in the U.S., according to the U.S. Energy Information Administration and the Oil Price Information Service. The near-record 34 million U.S. drivers who are planning road trips this Memorial Day weekend are likely to pay the lowest gasoline prices during that holiday in 11 years, according to the American Automobile Association. Cheaper gasoline has helped prop up consumer spending, albeit at relatively modest levels compared with previous oil-price busts. Lower fuel costs are cushioning Americans who are constrained by disappointing wage growth, higher health-care expenses and fast-rising rents. Research shows the small windfall in recent years was frequently used at restaurants, grocery stores and on other forms of entertainment. Vehicle miles traveled and automobile purchases also have hit records, led by SUVs and other big vehicles. A rise in prices to between $50 and $60 also would be moderate enough for the industries that depend most heavily on oil to handle. While airlines increasingly have shied away from hedging their fuel consumption, and will have to pay more for fuel if prices remain higher, they also have stressed that they can handle higher fuel prices, given the extensive restructuring, consolidation and product improvements that have transformed the industry in recent years. For the energy companies that have been punished by the price collapse, a recovery at this level is likely not enough to spur new investment, and there are signs that many big companies will continue cutting back into 2017. The world's biggest oil companies are in no hurry to resume expensive, long-term projects, which require higher prices to be profitable. "We have to be careful about $50 oil being a red herring," said Bernstein analyst Nicholas Green. "The major oil companies are going to remain extremely cautious. They are not going to be able to find many projects that are as economically viable as they want them to be at $50 a barrel, and that may even be true at $60." According to analysis by Macquarie, just two significant new developments were sanctioned last year, compared with a normal level of around 15 a year. Macquarie predicts a similarly low number this year. Hans Jakob Hegge, chief financial officer at Norway's Statoil ASA, said in an interview that 2017 could mark a third year of cuts across the industry. Mr. Hegge said companies are paying closer attention to maintaining their profits, rather than boosting production no matter the cost -- a departure from previous cycles. Oil hitting $50 a barrel may boost some smaller producers in places like the U.S. shale fields, sending their projects into the black. But many American producers have said $50 oil won't spur them to rush out and tap new wells. On recent calls with investors to discuss financial performance, two of the biggest U.S. shale producers spelled out differing views. Pioneer Natural Resources Co., active in west Texas, said $50 oil would spur it to put drilling rigs back to work, albeit on a small scale. But the head of EOG Resources Inc. said that while the effects of the energy downturn are starting to ease, it will take at least another year -- and significantly higher crude prices -- for the U.S. oil and gas industry to recover. "In the U.S. it will take a sustained $60 to $65 oil price and 12 months of lead time for the industry to deliver a modest level of growth," said Bill Thomas, chief executive of EOG. --- Sarah Kent and Erin Ailworth contributed to this article. Credit: By Jeffrey Sparshott and Georgi Kantchev
Subject: Gasoline prices; Energy industry; Commodities trading; Economic impact; Crude oil prices
Location: United States--US
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: May 27, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791556522
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791556522?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Retreat From $50; Investors taking profits after oil touched seven-month high Thursday
Author: Kantchev, Georgi; Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 May 2016: n/a.
Abstract: None available.
Full text: Oil prices fell further below the key $50 threshold Friday , as investors took profits from the recent rally and the dollar strengthened. Trading volume was among the lowest for any day since Christmas, with Monday's U.S. Memorial Day holiday limiting activity. Many traders simply wanted to get out of the market to limit their risk of exposure to any big or unforeseen changes, helping prices to fall slightly as bullish speculators who drove the rally sold to close their positions, brokers said. "This is just dead," said Peter Donovan, broker for Liquidity Energy in New York. "We're not seeing a lot of aggressive activity right before the weekend, which is to be expected." U.S. crude oil for July delivery settled down 15 cents, or 0.3%, at $49.33 a barrel on the New York Mercantile Exchange. For the week, it gained 92 cents, or 1.9%, marking its third-straight winning week. Brent crude, the global benchmark, lost 27 cents, or 0.5%, to $49.32 a barrel on ICE Futures Europe. It also held to gains for a third straight week, up 60 cents, or 1.2%, for this week and up 8.7% for the three-week winning streak. U.S. oil breached $50 a barrel Thursday for the first time since October. Analysts now wonder whether Friday's fall is a temporary pullback or indicative of a market still facing a problem with oversupply. "Speculators are clearly very cautious at these price levels," said David Hufton of PVM brokerage, adding that some Canadian production might return after outages due to wildfires. "Then there is dollar strength to consider with a Federal Reserve hike in June back on the table." The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, rose 0.6% Friday. As oil is priced in dollars, its price often falls as the dollar rises because it becomes more expensive for holders of other currencies as the greenback appreciates. Oil prices have bounced back from the decade-lows of below $30 that they hit earlier this year. The rally has been fueled by a combination of supply disruptions and a continued fall in U.S. oil output. Oil's Run at $50 * Oil Prices Poised to Hit Sweet Spot * The New Oil Traders: Moms and Millennials * Drivers Won't Suffer From Oil's Rise * How High Can Oil Prices Go? * Iran's Oil Deals Hit Banking Snag Despite the recent retreat, U.S. crude is still up nearly 90% from its 13-year low in February, the sharpest rise since an increase of 92% from February to May of 2009. Still, some analysts say disruptions are mostly temporary, meaning many of the lost barrels will be back. "Expecting a persisting supply glut and fearing the excessively bullish sentiment, we see more downside than upside from today's prices and maintain our cautious view," said Norbert Rücker, head of commodities research at Julius Baer. Production by members of the Organization of the Petroleum Exporting Countries is also on the rise. UBS analysts forecast that OPEC's production will exceed 33 million barrels a day this summer. In a meeting in Doha in mid-April, a group of OPEC and non-OPEC members, including heavyweights Saudi Arabia and Russia, failed to agree on a production cap. The next OPEC meeting is scheduled for Thursday in Vienna. "We don't expect OPEC producers to come to any agreement at the coming meeting in Vienna and expect Gulf countries to ramp up production," UBS said in a report. "This return of disrupted supply and OPEC's increasing of production lay the foundation for a wider market surplus, and for prices to fall back below $40 in the short run." Previously on OPEC * Saudi Oil Minister Surprises OPEC with Tough Line on Prices (Feb. 24) * Cheap Oil Means Record U.S. Trade Surplus With OPEC (April 5) * OPEC Officials: May Discuss Oil Freeze at June Meeting (April 21) The market did pare losses late in the day after the latest U.S. oil-rig count showed two fewer rigs drilling for oil. Baker Hughes Inc., which tracks the data, said 316 oil rigs are active, down from 1,609 at the peak in October 2014. Many traders and analysts trade the rig count as a rough proxy for production, and some expect the falling number of rigs will help cut U.S. oil output and help end the oversupply that has brought prices down from above $100 a barrel two years ago. Gasoline futures settled up 1.24 cents, or 0.8%, at $1.6319 a gallon. It still finished down for the week by 0.37 cent, or 0.2%, snapping a two-week winning streak. Diesel futures fell 0.73 cent, or 0.5%, to $1.494 a gallon. It gained 0.4 cent, or 0.3%, on the week, its third-straight weekly gain. Diesel is up nearly 12% in those three weeks. Ezequiel Minaya and Jenny W. Hsu contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev and Timothy Puko
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 27, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791573506
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791573506?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Stocks Fall in Quiet Session --- Both oil and the S&P 500 gained early, but slid lower by the end of the day's trading
Author: Kuriloff, Aaron; Zeng, Min
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 May 2016: C.4.
Abstract:
Money managers said a slow approach to raising interest rates is unlikely to roil the bond market, especially at a time when many foreign investors are struggling to get income with even lower yields overseas.
Full text: Major U.S. stock indexes pulled back slightly in light trading after two days of advances. Crude-oil prices climbed above $50 a barrel but failed to remain there, spurring declines in the materials and energy sectors. Utilities, telecommunications and consumer discretionary companies gained as investors repositioned after days of buying riskier stocks. Thursday's session was the second-lowest-volume day this year, with roughly 5.8 billion U.S. shares changing hands ahead of a U.S. holiday weekend. That came after another particularly slow session Monday. "It seems like there's very little consensus out there, so the market seems to get whipped around," said Rob Bernstone, managing director in equity trading at Credit Suisse. The Dow Jones Industrial Average fell 23.22 points, or 0.1%, to 17828.29. The S&P 500 slipped 0.44 points, or less than 0.1%, to 2090.10, while the Nasdaq Composite Index climbed 6.88 points, or 0.1%, to 4901.77. Energy shares in the S&P 500 reversed an early climb as crude prices fell back below $50 after briefly topping the milestone in intraday trading. U.S. crude oil lost 0.2% to $49.48 a barrel. The energy sector has been one of the top performers in the S&P 500 this year, rising 11% so far in 2016 as oil has rebounded from its lows. Shares of materials companies dragged on the S&P 500, losing 1.1%. Freeport-McMoRan fell 31 cents, or 2.7%, to $11.34 while Dow Chemical Co. dropped 87 cents, or 1.7%, to 51.99. DuPont was the biggest decliner in the Dow, falling 1.27, or 1.9%, to 66.96. While oil fell, it still settled at its second-highest level this year, weighing on travel companies. Delta Air Lines fell 74 cents, or 1.7%, to 42.76. American Airlines Group slid 66 cents, or 2.1%, to 31.51 and Southwest Airlines fell 74 cents, or 1.7%, to 41.79. Dollar Tree rose 10.01, or 12.8%, to 88.37, making it the biggest gainer in the S&P 500. The retailer's shares hit a new record after the company raised its outlook for the year and earnings topped expectations. Financial shares in the S&P 500 fell 0.6% after gaining in recent sessions on expectations that higher interest rates would help profits at banks. Federal Reserve Board governor Jerome Powell said Thursday it may be appropriate for the Fed to raise interest rates again "fairly soon," but said the Fed should proceed at a gradual pace. The yield on the benchmark 10-year Treasury note settled at 1.823% Thursday, down from 1.87% Wednesday. Money managers said a slow approach to raising interest rates is unlikely to roil the bond market, especially at a time when many foreign investors are struggling to get income with even lower yields overseas. "Investors are yield starved," said Thomas Roth, executive director in the U.S. government-bond trading group at Mitsubishi UFJ Securities (USA) Inc. "They know that the Fed will have to move slowly or they will crush all the bondholders." The euro rose 0.3% against the dollar to $1.1195, while the dollar fell 0.4% against the yen at 109.764 yen. The WSJ Dollar Index, which measures the buck against a basket of 16 currencies, slipped 0.2%. The Stoxx Europe 600 gained 0.1%, despite declines in the region's banking sector, which had risen nearly 7% in the last two sessions. "No one has exact clarity on the Fed," said Mark Harris, head of multi asset at City Financial. "We seem to have rolled from one set of crises to another [this year] and central banks are struggling to deal with these issues," he said. Early Friday, Japan's Nikkei Stock Average was up 0.4%, while the Shanghai Composite Index was flat and Hong Kong's Hang Seng was down 0.3%. Credit: By Aaron Kuriloff and Min Zeng
Subject: Stock prices; Dow Jones averages; Daily markets (wsj)
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: May 27, 2016
column: Thursday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791575518
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791575518?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Corporate Profits Rise as GDP Is Revised Up; Stronger first-quarter performance comes amid signs of stabilizing oil prices, dollar
Author: Leubsdorf, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 May 2016: n/a.
Abstract:
Related Reading * G-7 Leaders Differ on Risks to Global Growth * U.S. Companies Dial Back Investment Despite Upbeat Economic Signs Beyond the corporate sector, consumer spending and a healthier housing market are supporting continued economic growth.
Full text: U.S. corporate profits, hit hard last year by the energy downturn and strong dollar, show signs of stabilizing as oil prices dance around $50 a barrel and economic growth appears to be picking up. But American companies still face earnings pressure due to rising wage growth and a still-weak global economic expansion. A key measure of corporate profits--after taxes, without inventory valuation and capital consumption adjustments--rose at a 1.9% pace in the first three months of 2016, the Commerce Department said Friday. That was after dropping at an 8.1% pace in the fourth quarter and a 3.3% decline in the third quarter. "At least it's not negative," said Christine Short, senior vice president at analytics firm Estimize, though she added that the profit rebound is "still nothing to write home about." The broader economy seems on track to rebound after a weak performance over the past few quarters. Gross domestic product, a broad measure of goods and services produced across the U.S. economy, expanded at a 0.8% seasonally adjusted annual rate in the first three months of 2016, the Commerce Department said in updated figures out Friday. That was up from an initial estimate of 0.5% growth but still represented a deceleration from the fourth quarter's 1.4% growth rate. The resilience of corporate profits in the months ahead will be key to supporting the stock market, which has returned near the all-time highs reached last spring. It's also critical to firms' ability to hire workers and invest in new equipment and facilities. Some analysts cautioned that the fourth-quarter decline in corporate profits and first-quarter rebound were likely driven in part by BP PLC's record settlement with the U.S. government over the 2010 Deepwater Horizon oil spill in the Gulf of Mexico , which was finalized late last year. On a year-over-year basis, profits in the first quarter were down 3.6% for the second straight quarter, and profits as a share of the overall economy remain depressed from the record levels reached earlier in the expansion. Company earnings should be falling or flat on an annual basis over the next two quarters, but are expected to turn positive late this year, said Ms. Short. Rising oil prices and a stable dollar, she said, are set to be "a tremendous help." Crude prices touched $50 a barrel this past week for the first time since last year, propelled by the most powerful rally in seven years. Higher prices are set to ease pressure on energy firms that have shed workers and pulled back on drilling across the oil patch over the past two years. The dollar, meanwhile, has been more or less stable over the past year after rising sharply against other major currencies in late 2014 and early 2015 as the Federal Reserve prepared to begin raising short-term interest rates. A stronger dollar has made U.S.-made products more expensive for foreign customers, reducing demand for exports and squeezing the domestic manufacturing sector. Related Reading * G-7 Leaders Differ on Risks to Global Growth * U.S. Companies Dial Back Investment Despite Upbeat Economic Signs Beyond the corporate sector, consumer spending and a healthier housing market are supporting continued economic growth. But overall activity remains sluggish. J.P. Morgan Chase economists on Friday warned that economic indicators signal a 34% chance of a recession within 12 months, the highest level since it began tracking the risk last year. The worst may be over from the oil downturn and effects of a strong dollar. But a tightening labor market is pushing up wages "and that probably is cutting into margins" more broadly, said Jesse Edgerton, a J.P. Morgan Chase economist. Meanwhile, metrics of consumer confidence and spending, housing-market activity and foreign trade are all pointing to a pickup in GDP growth in the current quarter. Forecasting firm Macroeconomic Advisers on Friday projected growth would accelerate to a 2.5% pace in the second quarter. That could prompt Fed officials to support a second increase in short-term interest rates. The U.S. central bank in December raised its benchmark federal-funds rate, which had been pinned near zero for seven years, to a range of 0.25% to 0.5%. Since then, policy makers have exercised caution in the face of worries about global growth and volatile financial markets. The Fed has recently signaled that a move may come at its upcoming meetings on June 14-15 or July 26-27. Investors on Friday pegged the odds of a rate increase in June or July at 56%, according to fed-fund futures tracked by CME Group. Fed Chairwoman Janet Yellen said Friday that "probably in the coming months such a move would be appropriate" if certain conditions are met, including an improvement in economic growth. "We saw weak growth in the first quarter of the year and relatively weak growth at the end of last year," she said during an event at Harvard University. "Growth looks to be picking up, from the various data that we monitor." Household outlays, the housing sector and spending by state and local governments all provided positive contributions to output growth in the first quarter. Business investment, inventories and foreign trade were all drags on growth. Business spending remains a sore spot. The Commerce Department this week reported that April saw a decline in a key proxy for capital spending , orders for long-lasting civilian capital goods excluding aircraft. That came after the first quarter saw the steepest decline in fixed nonresidential investment -- a metric of U.S. business spending -- since the tail end of the 2007-2009 recession, including sharply lower spending on structures and equipment. Chico's FAS Inc. said this past week that same-store sales fell 4.2% from a year earlier in the three months ended April 30. The Fort Myers, Fla.-based women's apparel retailer said it plans to scale back capital expenditures for this year and close dozens of stores. "In this challenging environment, we are allocating our resources prudently," Chief Financial Officer Todd Vogensen told analysts Thursday. Consumers seem to be in better shape. The unemployment rate in April was 5%, half the level seen in the recession's immediate aftermath, and long-sluggish wage growth has firmed by some measures. Consumer spending expanded at a 1.9% rate in the first quarter, and retail sales jumped in April at the fastest pace in a year . The University of Michigan on Friday reported its index of consumer sentiment rose to 94.7 in May, the highest level in 11 months. The pace of job gains, though, may be slowing. Nonfarm employers added 160,000 jobs in April, a deceleration from the first quarter's monthly average of 203,000, according to Labor Department data. Write to Ben Leubsdorf at ben.leubsdorf@wsj.com Credit: By Ben Leubsdorf
Subject: Economic growth; Interest rates; Economic indicators; Recessions; Crude oil prices; Gross Domestic Product--GDP
Location: United States--US
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 27, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791897901
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791897901?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Rig Count Fell by Two in Latest Week; Gas rigs increase by two, bringing count to 87
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 May 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs rose by two in the latest week to 87.
Full text: The U.S. oil-rig count fell by two to 316 in the latest reporting week, according to oil-field services company Baker Hughes Inc., keeping up a broad trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to tumble in 2014. The number of oil rigs in the U.S. peaked at 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs rose by two in the latest week to 87. The U.S. offshore-rig count was 24 in the latest week, unchanged from last week and down five from a year earlier. Oil prices fell further below the key $50 threshold Friday, as investors took profits from the recent rally and the dollar strengthened. U.S. oil breached $50 a barrel Thursday for the first time since October. Analysts now wonder whether Friday's fall is a temporary pullback or indicative of a market still facing a problem with oversupply. U.S. crude was recently down 0.4% to $49.27 a barrel. Write to Ezequiel Minaya at ezequiel.minaya@wsj.com Credit: By Ezequiel Minaya
Subject: Oil service industry; Supply & demand
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 27, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791982028
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791982028?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Emerald Oil Snags $73 Million Bid Before July Auction; Court approval of stalking horse, or lead, bid would allow company to move forward with its sale timeline
Author: Rizzo, Lillian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 May 2016: n/a.
Abstract:
Court papers show the company is asking Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del., to sign off on the stalking horse, or lead, bidder so it can move forward with its sale timeline.
Full text: Emerald Oil Inc. snagged a $73 million bid from affiliates of institutional investor Crestline Management LP and private-equity firm Sole Source Capital LLC, setting the floor ahead of a July auction. Court papers show the company is asking Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del., to sign off on the stalking horse, or lead, bidder so it can move forward with its sale timeline. If that timeline is approved, other bids for Emerald would be due by July 6. If needed, an auction would be held July 11. A hearing to approve the sale would take place on July 14. Emerald said in court papers that the sale of all of its oil and gas assets, including leases and mineral contracts mainly in North Dakota, will reap the best recovery for the company's creditors. Court papers show that since filing for bankruptcy, Emerald heard from nine interested bidders, and by the end of the process received four bids before selecting Sole Source and Crestline as the lead bidder. When Emerald initially filed for bankruptcy protection in March, it was in talks with British businessman Brian Kennedy's Latium Group as a possible stalking-horse bidder , court papers showed. Attorneys for Emerald and Latium couldn't immediately be reached Friday to comment on the status of a bid. Emerald sought chapter 11 protection in March , blaming its financial troubles on the steep declines in oil and gas prices like many of its peers. Chief Financial Officer Ryan Smith said in court papers that Emerald chose bankruptcy "rather than remaining under the constant threat of impending creditor remedies while hoping for an immediate turnaround in both the global commodities and capital markets." Emerald won court approval earlier this month to use the rest of its approximately $130 million bankruptcy financing package following a squabble with creditors that was smoothed over after weeks of negotiations. The financing package is made up of $20 million in new money, and the remaining $109.9 million is a roll-up of existing debt. The loan is from a group of existing lenders led by Wells Fargo Bank. The Denver-based company, which has operations primarily in North Dakota, owes about $111 million to senior lenders and roughly $148.5 million to bondholders, court papers show. (This article also appears in Daily Bankruptcy Review, a publication from Dow Jones & Co. Go to http://dbr.dowjones.com.ezproxy.uta.edu .) Write to Lillian Rizzo at Lillian.Rizzo@wsj.com Credit: By Lillian Rizzo
Subject: Bankruptcy reorganization; Bankruptcy; Bids
Location: North Dakota
Company / organization: Name: Bankruptcy Court-US; NAICS: 922110; Name: Wells Fargo Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1791982069
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1791982069?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Big Oil Companies Stay Shy Despite Upswing in Prices; Rally that briefly lifted crude prices above $50 a barrel isn't enough to spark new spending, output
Author: Kent, Sarah; Cook, Lynn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 May 2016: n/a.
Abstract: None available.
Full text: The world's biggest energy companies are treating with caution the rally that briefly lifted crude-oil prices over $50 a barrel this week, wary of boosting spending and production too soon. Companies including Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC spent huge sums on giant new oil and natural-gas projects as prices surged over the past decade, only to make large corresponding cuts to their development budgets when prices plunged in 2014 and 2015. Oil prices are recovering, topping $50 a barrel for the main global benchmark on Thursday--nearly double the price in January--before retreating to $49.33 a barrel on Friday. But companies are moving more slowly to start new drilling and production this time around. "We're not going to try and get into a boom and bust," BP's chief financial officer, Brian Gilvary, said in a conference call last month. Even at $60 a barrel, he said, "We wouldn't be looking to significantly ramp [activity] up." Shell this week announced a fresh round of job cuts across its business, bringing its total planned for the year to at least 5,000. Earlier this month, the Anglo-Dutch company said it would cut its planned 2016 spending on new projects by nearly 10%. Oil hitting $50 a barrel may boost smaller producers in places like the U.S.'s shale fields, sending their relatively low-cost projects into the black. But many of the expensive, long-term projects that big oil companies specialize in, such as deep-water wells, require higher prices to be profitable. Still, some larger oil companies say they can boost production as prices reach the $50 threshold, though the increase may be modest. Although many of Chevron Corp.'s mega projects around the globe need higher prices to be profitable, the company recently said its Permian Basin operations in West Texas can hum along with crude at $50. Chevron has slashed 40% from its costs in the area and now has 4,000 wells there that give a 10% rate of return when West Texas Intermediate, the U.S. benchmark price, is at $50. "We are now in full horizontal factory mode in the Permian," said Joe Geagea, an executive vice president for technology and services at Chevron, comparing drilling operations there to a streamlined manufacturing process. Exxon hit the brakes this year, slashing its budget by 25% and dropping the number of drilling rigs it runs in the U.S. from close to 60 at the height of the oil boom to about 16 as it delayed shale production. What will it take for Exxon to step on the gas again? "It's not really a price trigger for us," said Jeff Woodbury, vice president of investor relations, when Exxon discussed first-quarter earnings in late April. The company cares more about the broad supply-and-demand balance across the whole world, he said. Global oil demand is growing, but not fast enough to outpace the crude supply glut that has built up over the two years. A forecast from the International Energy Agency now projects a strong rebound in the second half of 2016, with oil demand rising by 1.8 million barrels a day to 96.8 million barrels a day by the fourth quarter. Although many U.S. producers have said $50 oil won't spur them to rush out and tap new wells, one of the bigger uncertainties is whether the $50 threshold will lead them to finish the many wells that are drilled but not yet pumping in fields from Texas to North Dakota--estimated at nearly 4,000 according to data from consulting firm Rystad Energy. "Consensus appears to be building around the notion that $50 to $55 is tantamount to an industry 'all clear,'" analysts at Tudor, Pickering, Holt & Co. said. Further out in the futures market, oil is trading over $50 a barrel into 2017. That allows companies to hedge their future output by locking in higher prices today for oil they won't pump until next year, said John England, a vice chairman of oil for Deloitte LLP in Houston. "A kind of cautious optimism is starting to creep back into the market, even though some support for higher crude prices stems from temporary outages like wildfires in Canada that have shut down oil-sands production and attacks on pipelines in Nigeria," Mr. England said. :The prevailing view on Wall Street is that $60-a-barrel oil is the new $90, the price needed to trigger the sort of production growth seen during the last upswing that peaked in 2014, said Evan Calio, head of U.S. oil research at Morgan Stanley. He says that conventional wisdom may be wrong. While some shale producers may start pumping from wells drilled but not completed if oil hangs above $50 a barrel, most will need months of stable prices before they can borrow enough money to ramp up output again, he said. "Growth will take longer to return than the market expects," said Mr. Calio, who thinks it will take $80 oil prices for American production to increase again. While large companies are behaving cautiously, some smaller producers are showing resiliency in the face of low prices. Mike Dynan, vice president of strategy for drilling-equipment maker Schramm Inc., said more small producers are deploying smaller, faster rigs that can punch holes in the ground in less than 48 hours. "They can't control the price of oil, but they can push their costs down," he said. "That's what's scary to the rest of the world. The Americans are going to find a way to make some money." Erin Ailworth contributed to this article. Write to Sarah Kent at sarah.kent@wsj.com and Lynn Cook at lynn.cook@wsj.com Credit: By Sarah Kent and Lynn Cook
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792069204
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792069204?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Hercules Offshore to File for Chapter 11 Again, Hit by Oil Price Slump; Ocean driller to sell off assets to benefit its stakeholders
Author: Gleason, Stephanie; Steele, Anne
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 May 2016: n/a.
Abstract:
Hercules cited "the ongoing decline in oil prices, the consolidation of its U.S. customer base and the addition of new capacity have negatively impacted day rates and demand for Hercules's services" as reasons for its distress.
Full text: Hercules Offshore Inc. said it would again file for chapter 11, this time planning to liquidate as the ocean driller goes out of business amid the long swoon in oil prices. Less than seven months after exiting bankruptcy with $450 million in fresh financing and a lighter debt load, Hercules said Friday that it reached a deal with 99% of its senior lenders that will be executed with a so-called "prepackaged" chapter 11 filing. In a prepackaged bankruptcy, companies line up creditor support for their debt-payment plans before seeking chapter 11 protection, allowing them a speedier--and cheaper--trip through bankruptcy. Hercules's plan, which would ultimately be subject to bankruptcy-court approval, would see the company liquidate its assets and use the proceeds to repay creditors. The company expects to be able to pay unsecured creditors in full and provide as much as $12.5 million to shareholders. Senior lender recoveries will be based on the success of the asset sales. The company said Friday it has already it lined up a $196 million offer for its harsh environment jack-up rig, formerly named Hercules Highlander, to Maersk Highlander UK Ltd. Shares, down 45% so far this year, were trading Friday around $1.19. Hercules cited "the ongoing decline in oil prices, the consolidation of its U.S. customer base and the addition of new capacity have negatively impacted day rates and demand for Hercules's services" as reasons for its distress. Last year, Hercules seemed to be taking a proactive approach to its finances, filing for bankruptcy in August , relatively early in the oil and gas downturn, after striking a deal with lenders that would give it more financial flexibility. The deal swapped out $1.2 billion in bond debt for control of the company, another prepackaged bankruptcy that had the support of most senior creditors from the beginning of the company's chapter 11 case in August. It currently has a funded debt load of roughly $430 million. But by February, three months after emerging from bankruptcy, Hercules was reviewing its options "to maximize the value of the company." In April, it was forced to negotiate a forbearance agreement with lenders that said two events of default had occurred, one relating to the company's rigs in Nigeria and another surrounding a loan guarantor in Gibraltar. The situation prevented Hercules from accepting delivery of the Hercules Highlander, a new project being built in Singapore. As part of the company's recent bankruptcy restructuring, Hercules took on new debt to finance the construction of the project. The Houston-based company operates mainly jackup rigs, used to drill for oil in shallow water. Many of those have been idled, sold at low prices or have failed to secure new contracts when old ones expired as oil prices plummeted this year and last. Corrections & Amplifications: Hercules reached a deal with creditors that it will file for chapter 11 in the future. An earlier version of this article incorrectly stated that Hercules said Friday it had filed for chapter 11. Write to Stephanie Gleason at stephanie.gleason@wsj.com and Anne Steele at Anne.Steele@wsj.com Credit: By Stephanie Gleason and Anne Steele
Subject: Bankruptcy; Bankruptcy reorganization
Company / organization: Name: Hercules Offshore Corp; NAICS: 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 27, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792120085
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792120085?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Emerald Oil Snags $73 Million Bid Before July Auction; Court approval of stalking horse, or lead, bid would allow company to move forward with its sale timeline
Author: Rizzo, Lillian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 May 2016: n/a. [Duplicate]
Abstract:
Court papers show the company is asking Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del., to sign off on the stalking horse, or lead, bidder so it can move forward with its sale timeline.
Full text: Emerald Oil Inc. snagged a $73 million bid from affiliates of institutional investor Crestline Management LP and private-equity firm Sole Source Capital LLC, setting the floor ahead of a July auction. Court papers show the company is asking Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del., to sign off on the stalking horse, or lead, bidder so it can move forward with its sale timeline. If that timeline is approved, other bids for Emerald would be due by July 6. If needed, an auction would be held July 11. A hearing to approve the sale would take place July 14. Emerald in court papers said the sale of all of its oil and gas assets, including leases and mineral contracts mainly in North Dakota, will reap the best recovery for the company's creditors. Court papers show that since filing for bankruptcy, Emerald heard from nine interested bidders, and by the end of the process received four bids before selecting Sole Source and Crestline as the lead bidder. When Emerald initially filed for bankruptcy protection in March, it was in talks with British businessman Brian Kennedy's Latium Group as a possible stalking-horse bidder, court papers show. Attorneys for Emerald and Latium couldn't immediately be reached Friday to comment on the status of a bid. Emerald sought chapter 11 protection in March, blaming its financial troubles on the steep declines in oil and gas prices like many of its peers. Chief Financial Officer Ryan Smith said in court papers that Emerald chose bankruptcy "rather than remaining under the constant threat of impending creditor remedies while hoping for an immediate turnaround in both the global commodities and capital markets." Emerald won court approval earlier this month to use the rest of its approximately $130 million bankruptcy financing package following a squabble with creditors that was smoothed over after weeks of negotiations. The financing package is made up of $20 million in new money, and the remaining $109.9 million is a roll-up of existing debt. The loan is from a group of existing lenders led by Wells Fargo Bank. The Denver-based company, which has operations primarily in North Dakota, owes about $111 million to senior lenders and roughly $148.5 million to bondholders, court papers show. Write to Lillian Rizzo at Lillian.Rizzo@wsj.com Credit: By Lillian Rizzo
Subject: Bankruptcy reorganization; Bankruptcy; Bids
Location: North Dakota
Company / organization: Name: Bankruptcy Court-US; NAICS: 922110; Name: Wells Fargo Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 27, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuestdocument ID: 1792506607
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792506607?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Driller Taps Different Well of Financing; Fieldwood Energy sells about $390 million of new debt and is using proceeds to repay bank lenders
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 May 2016: n/a.
Abstract:
[...]in a couple of instances buyers of recent stock offerings have been wiped out, and some debt investors also are at risk of losses with many companies filing for bankruptcy protection.
Full text: Banks have been reducing their exposure to energy companies since oil prices started to collapse in 2014. Now, one oil producer, weary of its lenders cutting its credit line, is reducing its exposure to banks. Fieldwood Energy LLC, a closely held Houston-based driller, sold about $390 million of new debt on Friday to a group of institutional investors, according to people familiar with the matter. The company is using the proceeds to repay its bank lenders, these people said. While this move means Fieldwood is taking on $20 million a year in additional interest expenses, the company opted for the new loan because the banks had cut the company's credit limit by nearly $1 billion and it wanted to eliminate the possibility of further reductions, people familiar with the matter said. The deal is another sign that many investors are becoming optimistic about the oil-price rebound, which lifted crude prices temporarily back to $50 this week. Still, prices are down 44% since September 2014. In contrast, many banks are trying to cut their exposure to energy producers. Lenders have been cutting many of these companies' credit lines, which are based on the value of their untapped oil and gas reserves. Credit cuts this spring--when banks typically conduct the first of twice-annual collateral reviews--have been the steepest since the downturn, even as oil prices have nearly doubled from the 52-week low hit in February. Credit limits of 29 companies were cut an average of 33%, according to Citi Research, part of Citigroup Inc. One of the largest lenders in the oil patch, Wells Fargo & Co., said this past week that it has decreased two-thirds of the reserve-backed loans it has reviewed this spring. During the first quarter, Wells reduced the value of its loans and unfunded commitments to oil companies by 3%, to $40.7 billion. Yet as bank financing flows out of the energy sector, investor appetite for energy exposure has increased. North American oil and gas producers have sold more than $30 billion of new shares since the start of 2015, with much of the money used to pay down bank loans. Investor interest has been aided by gains in energy stocks. The energy sector in the S&P 500 is up 11% year to date, compared with the broader index's 2.7% rise. Oil-price gains also have prompted a rally in junk bonds from energy companies. Citi's High Yield Energy Index is up 15% on the year, more than twice the gains seen in the broader junk bond market. One frequent seller of stock over the past two years is Parsley Energy Inc. Parsley's stock is up 40% this year, and this week it became the first exploration-and-production company to sell junk bonds in 2016. Investors placed orders for more than 10 times the $200 million of debt that the Texas oil producer sold, according to people familiar with the matter. Parsley said it plans to use proceeds to help pay for property acquisition. Still, in a couple of instances buyers of recent stock offerings have been wiped out, and some debt investors also are at risk of losses with many companies filing for bankruptcy protection. Bonanza Creek Energy Inc. in February 2015 tapped investors' willingness to bet on a quick rebound in oil prices by selling new shares in a follow-on offering. Bonanza Creek sold shares at $26 and used the roughly $200 million of proceeds to pay down its bank debt, including some owed to lenders involved in the stock offering, according to securities filings. This month, its banks cut the company's credit line to below what it had borrowed. Bonanza Creek's shares plunged 35% on Tuesday, to $2.06, after the company disclosed that it was overdrawn by $88 million and working with lenders to figure out how to pay it back. A Bonanza Creek spokesman declined to comment. On Friday, Bonanza Creek's shares closed at $2.53, up 2.4% on the day. Fieldwood, which is controlled by energy investment firm Riverstone Holdings Inc., in February was downgraded four notches deeper into junk territory by credit-rating firm Moody's Investors Service, which cited the company's "unsustainably high debt burden in relation to its cash flow potential in a low commodity price environment." Fieldwood's borrowing limit was cut to $1.75 billion in April 2015 from $2.25 billion and reduced again in autumn to $1.3 billion by the 23 banks that make up its lending group, the people said. That last cut made Fieldwood, one of the largest producers in the Gulf of Mexico, overdrawn and triggered a series of financial moves and negotiations with its other debt investors that culminated in Friday's deal. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Junk bonds; Prices; Loans; Lines of credit; Energy industry; Institutional investments; Natural gas reserves; Oil reserves
Company / organization: Name: Fieldwood Energy LLC; NAICS: 211111; Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: Parsley Energy Inc; NAICS: 211111; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 28, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792089235
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792089235?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Big Oil Firms Stay Shy Despite Upswing
Author: Kent, Sarah; Cook, Lynn
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 May 2016: B.4.
Abstract:
Companies including Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC spent huge sums on giant new oil and natural-gas projects as prices surged over the past decade, only to make large corresponding cuts to their development budgets when prices plunged in 2014 and 2015.
Full text: The world's biggest energy companies are treating with caution the rally that briefly lifted crude-oil prices over $50 a barrel this week, wary of boosting spending and production too soon. Companies including Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC spent huge sums on giant new oil and natural-gas projects as prices surged over the past decade, only to make large corresponding cuts to their development budgets when prices plunged in 2014 and 2015. Oil prices are recovering, topping $50 a barrel for the main global benchmark on Thursday -- nearly double the price in January -- before retreating to $49.33 a barrel on Friday. But companies are moving more slowly to start new drilling and production this time around. "We're not going to try and get into a boom and bust," BP's chief financial officer, Brian Gilvary, said in a conference call last month. Even at $60 a barrel, he said, "We wouldn't be looking to significantly ramp [activity] up." Shell this week announced a fresh round of job cuts across its business, bringing its total planned for the year to at least 5,000. Earlier this month, the Anglo-Dutch company said it would cut its planned 2016 spending on new projects by nearly 10%. Oil hitting $50 a barrel may boost smaller producers in places like the U.S.'s shale fields, sending their relatively low-cost projects into the black. But many of the expensive, long-term projects that big oil companies specialize in, such as deep-water wells, require higher prices to be profitable. Still, some larger oil companies say they can boost production as prices reach the $50 threshold, though the increase may be modest. Although many of Chevron Corp.'s mega projects around the globe need higher prices to be profitable, the company recently said that its Permian Basin operations in West Texas can hum along with crude at $50. Chevron has slashed 40% from its costs in the area and now has 4,000 wells there that give a 10% rate of return when West Texas Intermediate, the U.S. benchmark price, is at $50. "We are now in full horizontal factory mode in the Permian," said Joe Geagea, an executive vice president for technology and services at Chevron, comparing drilling operations there to a streamlined manufacturing process. Exxon hit the brakes this year, slashing its budget by 25% and dropping the number of drilling rigs it runs in the U.S. from close to 60 at the height of the oil boom to about 16 as it delayed shale production. What will it take for Exxon to step on the gas again? "It's not really a price trigger for us," said Jeff Woodbury, vice president of investor relations, when Exxon discussed first-quarter earnings in late April. The company cares more about the broad supply-and-demand balance across the whole world, he said. Global oil demand is growing, but not fast enough to outpace the crude supply glut that has built up over the past two years. A forecast from the International Energy Agency now projects a strong rebound in the second half of 2016, with oil demand rising by 1.8 million barrels a day to 96.8 million barrels a day by the fourth quarter. Although many U.S. producers have said $50 oil won't spur them to rush out and tap new wells, one of the bigger uncertainties is whether the $50 threshold will lead them to finish the many wells that are drilled but not yet pumping in fields from Texas to North Dakota -- estimated at nearly 4,000 according to data from consulting firm Rystad Energy. "Consensus appears to be building around the notion that $50 to $55 is tantamount to an industry 'all clear,'" analysts at Tudor, Pickering, Holt & Co. said. Further out in the futures market, oil is trading over $50 a barrel into 2017. That allows companies to hedge their future output by locking in higher prices today for oil they won't pump until next year, said John England, a vice chairman of oil for Deloitte LLP in Houston. The prevailing view on Wall Street is that $60-a-barrel oil is the new $90, the price needed to trigger the sort of production growth seen during the last upswing that peaked in 2014, said Evan Calio, head of U.S. oil research at Morgan Stanley. He says that conventional wisdom may be wrong. While some shale producers may start pumping from wells drilled but not completed if oil hangs above $50 a barrel, most will need months of stable prices before they can borrow enough money to ramp up output again, he said. "Growth will take longer to return than the market expects," said Mr. Calio, who thinks it will take $80 oil prices for American production to increase again. While large companies are behaving cautiously, some smaller producers are showing resiliency in the face of low prices. Mike Dynan, vice president of strategy for drilling-equipment maker Schramm Inc., said more small producers are deploying smaller, faster rigs that can punch holes in the ground in less than 48 hours. "They can't control the price of oil, but they can push their costs down," he said. "That's what's scary to the rest of the world. The Americans are going to find a way to make some money." --- Erin Ailworth contributed to this article. Credit: By Sarah Kent and Lynn Cook
Subject: Financial performance; International markets; Petroleum industry
Location: United States--US
People: Gilvary, Brian
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: May 28, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792119243
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792119243?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Driller Taps Different Well of Financing
Author: Dezember, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 May 2016: B.5.
Abstract:
[...]in a couple of instances buyers of recent stock offerings have been wiped out, and some debt investors also are at risk of losses with many companies filing for bankruptcy protection.
Full text: Banks have been reducing their exposure to energy companies since oil prices started to collapse in 2014. Now, one oil producer, weary of its lenders cutting its credit line, is reducing its exposure to banks. Fieldwood Energy LLC, a closely held Houston-based driller, sold about $390 million of new debt on Friday to a group of institutional investors, according to people familiar with the matter. The company is using the proceeds to repay its bank lenders, these people said. While this move means Fieldwood is taking on $20 million a year in additional interest expenses, the company opted for the new loan because the banks had cut the company's credit limit by nearly $1 billion and it wanted to eliminate the possibility of further reductions, people familiar with the matter said. The deal is another sign that many investors are becoming optimistic about the oil-price rebound, which lifted crude prices temporarily back to $50 this week. Still, prices are down 44% since September 2014. In contrast, many banks are trying to cut their exposure to energy producers. Lenders have been cutting many of these companies' credit lines, which are based on the value of their untapped oil and gas reserves. Credit cuts this spring -- when banks typically conduct the first of twice-annual collateral reviews -- have been the steepest since the downturn, even as oil prices have nearly doubled from the 52-week low hit in February. Credit limits of 29 companies were cut an average of 33%, according to Citi Research, part of Citigroup Inc. One of the largest lenders in the oil patch, Wells Fargo & Co., said this past week that it has decreased two-thirds of the reserve-backed loans it has reviewed this spring. During the first quarter, Wells reduced the value of its loans and unfunded commitments to oil companies by 3%, to $40.7 billion. Yet as bank financing flows out of the energy sector, investor appetite for energy exposure has increased. North American oil and gas producers have sold more than $30 billion of new shares since the start of 2015, with much of the money used to pay down bank loans. Investor interest has been aided by gains in energy stocks. The energy sector in the S&P 500 is up 11% year to date, compared with the broader index's 2.7% rise. Oil-price gains also have prompted a rally in junk bonds from energy companies. Citi's High Yield Energy Index is up 15% on the year, more than twice the gains seen in the broader junk bond market. One frequent seller of stock over the past two years is Parsley Energy Inc. Parsley's stock is up 40% this year, and this week it became the first exploration-and-production company to sell junk bonds in 2016. Investors placed orders for more than 10 times the $200 million of debt that the Texas oil producer sold, according to people familiar with the matter. Still, in a couple of instances buyers of recent stock offerings have been wiped out, and some debt investors also are at risk of losses with many companies filing for bankruptcy protection. Bonanza Creek Energy Inc. in February 2015 tapped investors' willingness to bet on a quick rebound in oil prices by selling new shares in a follow-on offering. Bonanza Creek sold shares at $26 and used the roughly $200 million of proceeds to pay down its bank debt, including some owed to lenders involved in the stock offering, according to securities filings. This month, its banks cut the company's credit line to below what it had borrowed. Bonanza Creek's shares plunged 35% on Tuesday, to $2.06, after the company disclosed that it was overdrawn by $88 million and working with lenders to figure out how to pay it back. A Bonanza Creek spokesman declined to comment. On Friday, Bonanza Creek's shares closed at $2.53, up 2.4% on the day. Fieldwood, which is controlled by energy investment firm Riverstone Holdings Inc., in February was downgraded four notches deeper into junk territory by credit-rating firm Moody's Investors Service, which cited the company's "unsustainably high debt burden in relation to its cash flow potential in a low commodity price environment." Fieldwood's borrowing limit was cut to $1.75 billion in April 2015 from $2.25 billion and reduced again in autumn to $1.3 billion by the 23 banks that make up its lending group, the people said. That last cut made Fieldwood, one of the largest producers in the Gulf of Mexico, overdrawn and triggered a series of financial moves and negotiations with its other debt investors that culminated in Friday's deal. Credit: By Ryan Dezember
Subject: Corporate debt; Credit markets (wsj)
Company / organization: Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: Fieldwood Energy LLC; NAICS: 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2016
Publication date: May 28, 2016
column: Credit Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuestdocument ID: 1792119307
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792119307?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Fueling Oil's Push to $50: Fear Is Back; Production outages are highest in a decade; with spare capacity shrinking, that has traders bidding up prices on bad news
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 May 2016: n/a.
Abstract:
Unused production capacity that the Organization of the Petroleum Exporting Countries can bring on quickly has dwindled , and the glut of output from other producers, including U.S. shale companies, has ebbed as companies cut back amid lower prices. During the 2011 Arab Spring uprisings and the overthrow of Libyan leader Moammar Gadhafi, supply disruptions helped lift global crude prices above $110 a barrel on average that year and in 2012, up from an average of about $80 a barrel in 2010. Since late 2012, global supply disruptions have held more than two million barrels a day off the global crude market, according to ClearView.
Full text: Oil-supply outages are at their highest level in more than a decade, bolstering the "fear premium" that has helped push crude prices to $50 a barrel. About 3.5 million barrels a day worth of production is off line because of disruptions such as militant attacks in Nigeria, wildfires in Canada and political unrest in Libya--more than 3% of the global total, says research firm ClearView Energy Partners LLC. That is likely the highest since the Iraq war hit output there in 2003, says Jacques Rousseau, the firm's managing director of oil and gas. At the same time, there is less slack to fill supply gaps. Unused production capacity that the Organization of the Petroleum Exporting Countries can bring on quickly has dwindled , and the glut of output from other producers, including U.S. shale companies, has ebbed as companies cut back amid lower prices. "There isn't a lot of extra supply out there," said Ann-Louise Hittle, lead oil-market analyst at energy-consulting firm Wood Mackenzie. "That's when you start to get a risk premium back in the market. It is absolutely to be expected and it is, in our opinion, just the beginning." Natural disasters or political unrest in oil-producing nations can halt production and disrupt shipping routes. Such events have historically boosted oil prices, because traders worry about the availability of future supplies. In 2014 and 2015, however, the oil market mostly ignored occasional supply disruptions, from sanctions on Iran to export-terminal closures in Libya. Traders focused instead on the growing crude surplus produced by U.S. shale companies, sending prices tumbling 76% before they bottomed in February. After talks of an output freeze among major producing nations fizzled in April, traders say the reduced supply from unplanned outages has been a primary factor driving U.S. oil prices from below $27 a barrel in February to more than $50 a barrel intraday on Thursday. U.S. crude settled Friday at $49.33 a barrel, down 0.3%. An oil-worker strike in Kuwait in April briefly shut down nearly half the Gulf nation's production. Wildfires in Alberta, Canada, this month forced the shutdown of production facilities in the country's oil-sands region. In Nigeria, a militant group calling itself the Niger Delta Avengers has claimed responsibility for attacks on a production facility and an export terminal. The country's output has fallen to the lowest level since 2009. Some think the rise in outages is in part a byproduct of depressed crude prices. When oil is cheap, producing nations' budgets suffer. That makes it harder for some governments to boost spending to head off unrest and deprives oil facilities of money needed for maintenance and recovery. "At $100 a barrel, you can paper over a lot of problems with money," said Helima Croft, head of commodities strategy at RBC Capital Markets. "2016 is proving to be the year of reckoning for the weakest producers." Some analysts think the boost from the disruptions may already be waning. Canadian officials have lifted a mandatory evacuation order on certain production sites in Alberta, and Kuwait's output has returned to normal. Even in Libya, where unrest has kept the country's production below capacity for years, some analysts expect exports to increase. "Some of the bullish sentiment has to ease," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, which oversees $128 billion. "There's some limits to how far this can go." Others aren't so sure that supply disruptions are going away. Iraq, Nigeria and Venezuela together produced 25% of OPEC's total crude output in April, according to the International Energy Agency. Each is struggling with outages or potential disruptions. Iraq is trying to keep its production high amid the threat of Islamic State. Many analysts warn that production could fall in Venezuela because of chronic power outages in the cash-strapped nation and disputes about payments to international oil-field-service providers. Militant attacks continue in Nigeria, including one related to a Chevron Corp. facility on Thursday. "You could be looking at a sustained outage for a long period," Ms. Croft at RBC said of the country's total output. Unplanned production outages are the highest since at least 2003, when the war in Iraq briefly halted nearly all production in that country, analysts say. During the 2011 Arab Spring uprisings and the overthrow of Libyan leader Moammar Gadhafi, supply disruptions helped lift global crude prices above $110 a barrel on average that year and in 2012, up from an average of about $80 a barrel in 2010. Since late 2012, global supply disruptions have held more than two million barrels a day off the global crude market, according to ClearView. Fear of lost production after Islamic State seized some Iraqi cities briefly helped push global oil prices above $110 a barrel in mid-2014. If supply was still growing fast, disruptions might not affect prices as much. But production in the U.S. and other parts of the world is falling as companies cut back. "Today, it doesn't look like we will see a return to excess supply conditions," said Bo Christensen, chief analyst at Danske Invest, which manages $100 billion in assets. "That makes the market susceptible to other types of risks, of course including geopolitical risks." Credit: By Nicole Friedman
Subject: Production capacity; Shutdowns; Crude oil prices; Militancy
Location: United States--US Iraq Nigeria Alberta Canada Libya
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 28, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792127273
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792127273?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Proposed $1.7 Billion Sale of Middle East Fast-Food Operator Collapses; Move reflects diminished appetite for large deals in the region as low oil prices dent investors' confidence
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 May 2016: n/a.
Abstract:
DUBAI--A proposed $1.7 billion deal to sell a majority stake in the Middle Eastern franchise rights-owner of Pizza Hut and KFC to a local group of businessmen has collapsed, reflecting a diminished appetite for large transactions in a region where low oil prices have dented investors' confidence.
Full text: DUBAI--A proposed $1.7 billion deal to sell a majority stake in the Middle Eastern franchise rights-owner of Pizza Hut and KFC to a local group of businessmen has collapsed, reflecting a diminished appetite for large transactions in a region where low oil prices have dented investors' confidence. Kuwait Food Co., better known as Americana, one of the Middle East's largest operators of fast-food chains, had been up for sale for years and previously attracted interest from global investors, including buyout giant KKR & Co . and Singaporean investment fund Temasek, but talks never came to fruition. The takeover saga finally appeared to come to an end in February when a Persian Gulf consortium led by a prominent business figure from Dubai offered to buy a 69% stake in the company in a deal potentially worth about $1.7 billion at the time. That agreement has now been scrapped, the companies included in the deal announced on Sunday. "The parties involved could not reach an agreement on mutually acceptable terms," said a spokesperson for Adeptio, the name of the consortium led by Mohamed Alabbar, an Emirati businessman who also heads Dubai's flagship developer Emaar Properties, the company behind the world's tallest tower. Americana and the entity that holds its stake made similar announcements, all without providing detail as to why the deal had collapsed. The Americana deal has come to symbolize the slowing market for mergers and acquisitions in the Middle East. While there has been some deal activity, notably smaller investments in the food and beverages sector, multibillion transactions have become increasingly rare in recent years. Several M&A bankers of global firms including Credit Suisse and Standard Chartered who were once stationed in the region's banking hub of Dubai left in the absence of many big deals. Bankers have often cited the unrealistic price expectations sellers harbor as one of the main stumbling blocks for more deals. But investors also grew increasingly cautious as the region's economies are slowing down in the face of low oil prices and amid geopolitical unrest in places such as Yemen and Syria. "Generally, the market for M&A has been quite soft," an adviser close to the Americana deal said. "Many deals have started and then stopped again, even multiple times, including the Americana one," the person said. "There's a trickle down impact of the economic growth slowdown which is going to affect all sectors," the person added. Americana was founded in 1964 and today has annual sales of more than $3 billion. It operates multiple brands including Hardee's and Costa Coffee but the company also produces frozen vegetables and fries. Related News * Gulf Investors to Buy Majority Stake in Kuwait's Americana (Feb. 4, 2016) * KKR and CVC Preparing Joint Bid for Kuwait's Americana (Aug. 8, 2014) * Oil Slump Sets Scene for Mergers (Jan. 28, 2016) The Americana stake is owned by the wealthy Kuwaiti Al Kharafi family which also owns stakes in several real estate, hospitality and manufacturing businesses across the region. Rothschild, which advised Americana during the sales process, wasn't immediately available to comment. Write to Nicolas Parasie at nicolas.parasie@wsj.com Credit: By Nicolas Parasie
Subject: Tender offers; Consortia; Chemical industry; Acquisitions & mergers
Location: Middle East Persian Gulf
Company / organization: Name: Hardees Food Systems Inc; NAICS: 722513; Name: Kohlberg Kravis Roberts & Co LP; NAICS: 523920; Name: Credit Suisse Group; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 29, 2016
Section: Business
Publisher: Dow Jones & Company In c
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792267364
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792267364?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Suncor Starts to Bring Canadian Oil Sands Back Online; The oil producer expects initial output by the end of the week
Author: Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 May 2016: n/a.
Abstract:
More Oil Market Coverage * Canada Wildfires Raise Threat to Oil-Sands Mining Operations * Fueling Oil's Push to $50:
Full text: Suncor Energy Inc. said Sunday it has begun a "staged restart" of operations near the fire-ravaged community of Fort McMurray, Alberta. Canada's largest crude-oil producer said it expects initial production to commence by the end of this week, noting startup activities had begun at its base plant and its MacKay River facility. Suncor's announcement is the latest sign that Canadian oil sands outages are slowly coming to an end. The global oil market was brought closer to balance in recent weeks by a series of temporary disruptions , including the one in the Canadian oil sands. Production was halted at Suncor earlier this month as wildfires forced the evacuation of Fort McMurray, located some 270 miles north of the provincial capital of Edmonton. None of Suncor's facilities were damaged as a result of the fires, the company said. More Oil Market Coverage * Canada Wildfires Raise Threat to Oil-Sands Mining Operations * Fueling Oil's Push to $50: Fear Is Back * Big Oil Companies Stay Shy Despite Upswing in Prices "Suncor has moved over 4,000 employees and contractors back into the region," the company said in a release, adding it plans to move in another 3,500 people over the coming week. The company also noted that construction at its Fort Hills mine continues and the operation should be fully staffed at some point this week. Suncor also said the Syncrude oil sands mining consortium was "in the process of planning its return to operations" but provided no firm time line. Suncor is a significant investor in the Syncrude project, which operates two oil sands mines in northeastern Alberta. Write to Rita Trichur at rita.trichur@wsj.com Credit: By Rita Trichur
Subject: Oil sands
Location: Canada
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 29, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792506549
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792506549?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Oil Prices Slightly Higher; Thursday OPEC Meeting in Focus; July Brent crude fell $0.11 to $49.21 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 May 2016: n/a.
Abstract:
According to latest reports, the militant group which calls itself Niger Delta Avenger, said it blew up a key production facility and an export terminal.
Full text: Crude oil prices were largely muted in early Asian trade Monday as investors wait to take cues from the Organization of the Petroleum Exporting Countries meeting Thursday, where the supply issue is expected to take center stage. Trading volume for today is expected to be low due to a public holiday in the U.S. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $49.33 a barrel at 0234 GMT, unchanged in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.11 to $49.21 a barrel. For nearly two years, a persistent glut has dragged oil prices way below their highs when prices hovered around $100 a barrel. The price collapse has encouraged major producers in and outside of the Organization of the Petroleum Exporting Countries to expand their production because no one wants to lose market shares amid low prices. As a result, the world remains oversupplied and prices stay under pressure. But thanks to several unplanned outages in places like Canada and Africa, about 3.5 million barrels of oil have been offline each day in recent weeks, pushing prices over the landmark $50 mark for the first time in six months on Thursday. While some outages are coming to an end--Canada's Suncor Energy on Sunday said it has begun a "staged restart" of its operations--oil production in Nigeria remains precarious. According to latest reports, the militant group which calls itself Niger Delta Avenger, said it blew up a key production facility and an export terminal. Nigeria's output has already fallen to the lowest level since 2009. Moreover, crude production in the U.S. and China have also fallen due to slashed budget for exploration. On Friday, industry group Baker Hughes reported the number of active U.S. rig drilling for crude fell by 2 to 316 last week. "Assuming that the U.S. oil rig count stays at its current level, U.S. oil production would decline by 750,000 barrels a day between fourth-quarter of 2015 and fourth-quarter of 2016," said Goldman Sachs in a note. China's crude production fell 5.6% in April and further decrease is on the horizon. Along with smaller production, strong oil demand from China and India are also expected to soak up the some of the glut. BMI Research forecasts China's gasoline consumption to grow 6.0% on-year in 2016, underpinned by robust growth in car ownership. Meanwhile, the International Energy Agency has dubbed India as the "star performer". India's oil demand in the first quarter of this year was 400,000 barrels a day higher on-year, representing nearly 30% of the global increase, the group says. Still, the market remains skeptical over how long it would take for the markets to skew to a rebalance especially when major OPEC producers, such as Iran, Iraq and Kuwait are accelerating their output. ANZ said for the coming days, all eyes will be on Thursday's OPEC meeting in Vienna. "The OPEC players will still struggle to cut production because there are many countries who are looking to as much hard currencies as they can," Alan Oster, chief economist at National Australia Bank. Investors will also be watching the U.S. oil data to be released on Thursday, instead of Wednesday due to the Memorial Day holiday. The Caixin Manufacturing Purchasing Managers' Index on China's manufacturing is also due this week. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 35 points to $1.6284 a gallon, while June diesel traded at $1.4970, 30 points higher. ICE gasoil for June changed hands at $444.00 a metric ton, down $4.50 from Friday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Petroleum production; Crude oil; Price increases
Location: United States--US China Nigeria India Canada
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: ICE Futures; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 30, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792301090
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792301090?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
OPEC Expected to Keep Output Steady as Oil Rebalances; OPEC representatives say production changes aren't on the agenda for Thursday's meeting in Vienna
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 May 2016: n/a.
Abstract:
Fear Is Back * Oil Prices Poised to Hit Sweet Spot for Global Economy * Big Oil Companies Stay Shy Despite Upswing in Prices * OPEC Likely to Choose New Secretary-General Next Week Analysts said Thursday's meeting was likely to cement OPEC's transition from cartel to massive market player whose influence comes from its vast share of the market.
Full text: VIENNA--The Organization of the Petroleum Exporting Countries isn't likely to take any coordinated action on crude-oil output at its meeting on Thursday, representatives said, as the group sees signs of success with its hands-off approach of the past 18 months. Oil prices have nearly doubled since hitting 13-year lows over the winter , as a global glut that has weighed on the market since 2014 shows signs of unwinding. Rising prices have taken the air out of calls for action within OPEC, the cartel that controls more than a third of the world's crude-oil production. There is no specific proposal on production on the agenda of OPEC's biannual meeting in Vienna, said Falah al-Amri, Iraq's OPEC envoy. That was echoed by several OPEC representatives who gathered here last week to discuss the gathering. Saudi Arabia and its Persian Gulf Arab allies in OPEC, such as Kuwait, see rising prices as vindicating the new direction they forged at their November 2014 meeting. They wagered that booming U.S. output would render its most important tool--production cuts--impotent, and that it was better for the group to pump flat out to keep customers, in hopes that the market would balance itself out eventually. Now, OPEC delegates from Iran, Iraq, Kuwait, Nigeria and others have developed a coordinated talking point: "The market is rebalancing," which is another way to say the group should stay put. OPEC expects U.S. petroleum output to fall by 430,000 barrels a day this year because of low prices, eliminating some key competition. Coupled with a string of output disruptions caused by Canadian wildfires and pipeline sabotage in Nigeria, global production and demand are coming back into balance, though a large amount of oil in storage is still weighing on the market. Even without the supply disruptions and climbing prices, prospects for action were already slim for this meeting. Tension between Saudi Arabia and Iran--rivals for power in the Middle East--have spilled into oil policy and helped derail a widely expected deal for output curbs among OPEC producers and nonmembers such as Russia. A significant divide remains between the cartel's richer members such as Saudi Arabia and the United Arab Emirates, who are content with the status quo, and poorer members like Venezuela and Algeria, which want the cartel to return to its interventionist ways. "At the moment, OPEC does not have much clout in the oil market," said Amir Hossein Zamaninia, deputy oil minister in Iran, an OPEC member, in a recent interview. More on Oil * Fueling Oil's Push to $50: Fear Is Back * Oil Prices Poised to Hit Sweet Spot for Global Economy * Big Oil Companies Stay Shy Despite Upswing in Prices * OPEC Likely to Choose New Secretary-General Next Week Analysts said Thursday's meeting was likely to cement OPEC's transition from cartel to massive market player whose influence comes from its vast share of the market. "Saudi can now argue to fellow OPEC members that its strategy is working and to stick to it," said Adel Hamaizia, an energy researcher at the University of Oxford. OPEC is expected to admit a 14th member on Thursday, the West African nation of Gabon, adding to 240,000 barrels a day of production to the group. OPEC's share of world production is expected to rise to 44% by 2025 from 41% now, according to the International Energy Agency, counting both crude oil and a lighter type of crude known as condensates. The gathering will be the first since Saudi Arabia launched a plan to transform its economy and reduce its dependence on oil revenue. Among the moves: replacing longtime Saudi Oil Minister Ali al-Naimi and an initial public offering of Saudi Arabian Oil Co., the state-run oil firm known as Saudi Aramco. Some observers say a publicly listed Aramco may not be able to justify producing less than its full capacity of 12 million barrels a day, as it does now, with output at about 10.2 million barrels a day, according to the IEA. Saudi Arabia's large spare capacity had long served to give OPEC real clout in the market because it meant the kingdom could ramp up production to deal with oil-supply outages elsewhere in the world. Mr. Naimi's replacement, Khalid al-Falih, the former chairman of Aramco, has given little insight yet into where he plans to take the country's oil production strategy. Saudi oil policy increasingly is seen driven by the kingdom's Deputy Crown Prince Mohammed bin Salman, a 30-year-old who has pledged to end the kingdom's "addiction to oil." The meeting will be the first one since the end of Western sanctions on Iran's nuclear program, a move that led to resurgent flows from the country. Iranian officials have said they won't join any coordinated action on production until the country's crude output reaches a pre-sanctions level of between 4 million and 4.2 million barrels a day. It is currently producing about 3.7 million barrels of crude a day. That position scuttled a Saudi Arabian-Russian plan for many big oil producers to pledge not to raise output anymore this year. OPEC representatives said they don't expect Saudi Arabia and Iran to compromise on Thursday. "OPEC now is experiencing a crisis of internal differences," Russian Oil Minister Alexander Novak said in his Twitter feed Sunday. "Despite this, I wouldn't write off this organization." Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com Credit: By Benoit Faucon and Summer Said
Subject: Cartels; Supply & demand; Crude oil prices; Petroleum production
Location: Kuwait Nigeria United States--US Iran Iraq Saudi Arabia
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 30, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792338185
Document URL: https://login.ezproxy.uta.edu/login?url=https://se arch.proquest.com/docview/1792338185?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Little Changed Ahead of OPEC Meeting; Trading quiet because of Memorial Day holiday in the U.S.
Author: Hsu, Jenny W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 May 2016: n/a.
Abstract:
According to the latest reports, a militant group that calls itself Niger Delta Avenger said it blew up a key production facility and an export terminal.
Full text: HONG KONG--Crude oil prices were little changed Monday as investors waited for cues from the Organization of the Petroleum Exporting Countries meeting Thursday, where the issue of oversupply is expected to take center stage. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July recently traded at $49.37 a barrel, up $0.04, while July Brent crude on London's ICE Futures exchange gained $0.10 to $50.05 a barrel. Monday trading volume is expected to be low in Asia because of a public holiday in the U.S. For nearly two years, a supply glut has dragged oil prices well below highs of about $100 a barrel. Major producers in and outside OPEC have expanded production in an effort to protect market share amid low prices. As a result, the world remains oversupplied and prices remain under pressure. But thanks to several unplanned outages in Canada and Africa, about 3.5 million barrels of oil have been offline each day in recent weeks, pushing prices over $50 a barrel for the first time in six months on Thursday. While some outages are coming to an end--Canada's Suncor Energy Inc. on Sunday said it had begun a "staged restart" of its operations--oil production in Nigeria remains precarious. According to the latest reports, a militant group that calls itself Niger Delta Avenger said it blew up a key production facility and an export terminal. Nigeria's output has already fallen to its lowest level since 2009. In addition, crude production in the U.S. and China has also fallen because of slashed exploration budgets. On Friday, industrial service company Baker Hughes Inc. said the number of active U.S. rigs drilling for crude fell by two to 316 last week. "Assuming that the U.S. oil rig count stays at its current level, U.S. oil production would decline by 750,000 barrels a day between fourth-quarter of 2015 and fourth-quarter of 2016," said Goldman Sachs in a note. China's crude production fell 5.6% in April and a further decrease is expected. Along with less, strong oil demand from China and India are also expected to soak up the some of the oversupply. BMI Research expects China's gasoline consumption will grow 6% from a year earlier in 2016, underpinned by robust growth in car ownership. Meanwhile, the International Energy Agency has dubbed India as the "star performer." India's oil demand in the first quarter of this year was 400,000 barrels a day higher compared with a year earlier, which represents nearly 30% of the global increase, the group said. Still, participants remain skeptical about how long it would take for markets to skew to a rebalance, especially when major OPEC producers are accelerating output. "The OPEC players will still struggle to cut production because there are many countries who are looking to get as much hard currencies as they can," said Alan Oster, chief economist at National Australia Bank. Investors will also be watching U.S. oil data to be released Thursday instead of Wednesday because of Memorial Day. Write to Jenny W. Hsu at jenny.hsu@wsj.com Credit: By Jenny W. Hsu
Subject: Crude oil prices; Petroleum production; Crude oil; Price increases
Location: United States--US China Nigeria India Asia Canada
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 30, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792341076
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/17923410 76?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
'Teapot' Refineries Shore Up China's Demand for Crude; In April, privately owned refiners imported 1.2 million barrels of oil a day, about 15% of China's total crude imports
Author: Hsu, Jenny W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 May 2016: n/a.
Abstract:
The congestion is because of a surge in oil imports from a group of privately owned refiners--dubbed "teapots" because of their small size compared with giant state-owned companies, such as China Petroleum & Chemical Corp., or Sinopec, PetroChina Co., and China National Offshore Oil Corp.--that are shaking up China's oil industry and stoking global markets. "Why should I keep my production at full capacity when my margin is low?" The teapots' ability to buy from international markets at a time when oil prices were continuing their slide gave them an advantage over their less efficient state-owned rivals, which often import based on long-term contracts fixed at high prices or buy expensively-produced crude from their own oil-producing units.
Full text: QINGDAO, China--While oil shipments to other parts of the world languish, this port in eastern China has an unusual problem--a lengthy queue of tankers waiting up to two weeks to unload their crude. The congestion is because of a surge in oil imports from a group of privately owned refiners--dubbed "teapots" because of their small size compared with giant state-owned companies, such as China Petroleum & Chemical Corp., or Sinopec, PetroChina Co., and China National Offshore Oil Corp.--that are shaking up China's oil industry and stoking global markets. Historically, these teapots have done most business with their larger domestic rivals, buying crude from them and processing it into gasoline and diesel. They still sell much of their output back to the big state-owned companies which run vast networks of gas stations across China. But since last July, in a bid to stir more competition in China's oil market, Beijing has begun granting teapots licenses and a quota to import crude oil. So far, 27 teapots have either received an import license or are waiting to be approved. Many of these can now export refined products for the first time too, a development analysts expect could reconfigure Asia's markets for gasoline and diesel. Already, the teapots are helping keep demand for oil high in the world's second biggest crude-importing country, in turn supporting global oil prices. Last month, teapots imported 1.2 million barrels of oil a day, Energy Aspects estimates, around 15% of China's total crude imports. Oil prices last week rose over $50 a barrel for the first time in six months. As Beijing tries to tackle China's chronic pollution problem, the teapots are also trying to shed their reputation as dirty and having low safety standards. At Shandong Chambroad Petrochemicals Co., one of the larger teapots based a three-hour drive from Qingdao, a giant statue of Confucius teaching five of his followers greets visitors to the main office. Inside, posters plastered to elevator walls list the company's social values. Just a few hundred meters away crude is being processed, yet there is no smell of gasoline in the air. Administrative staff here exercise together each day at 10 a.m.: Workers in the main refinery work 12-hour shifts, resting for the following 24 hours. Chambroad has recently agreed to import 730,000 barrels of crude from Saudi Arabian Oil Co., or Saudi Aramco, this year, the first teapot to do a deal with Saudi Arabia's state-owned behemoth. Chambroad's managers, who declined to be named for this article, acknowledge their role in changing China's oil industry. "Yes, we are becoming a threat to the state-owned enterprises," said one company official. Still, teapots could cut back on output as prices rise and their margins narrow. Already, 16 teapots including Chambroad have formed a coalition to bargain collectively with suppliers to get better deals. "It is fine to earn less, but it is not fine to have a net loss," the Chambroad official said. "Why should I keep my production at full capacity when my margin is low?" The teapots' ability to buy from international markets at a time when oil prices were continuing their slide gave them an advantage over their less efficient state-owned rivals, which often import based on long-term contracts fixed at high prices or buy expensively-produced crude from their own oil-producing units. The teapots produce gasoline and diesel around $10 a barrel cheaper on average than giants like Sinopec, according to analysts BMI Research. "A drop in teapot buying would impact prices...It would lead to lower imports from China and concerns about the health of Chinese economy and appetite for buying," said Michal Meidan, an analyst at Energy Aspects. China's slowing economy could prove a headwind too. The country's demand for diesel, which accounts for most refinery output, has slipped 4.1% this year according to data from HSBC, thanks largely to moribund industrial production. That is encouraging teapots to expand overseas. Chambroad says it plans to start exporting a low-polluting type of gasoline it has developed to the Southeast Asian market during this quarter. It hopes to make 20% of its sales overseas this year mostly, it says, to companies that have their own gas stations like BP PLC and Royal Dutch Shell PLC. As other teapots look to export more, they could take market share from other regional producers. Analysts at brokerage Jefferies Group LLC reckon China's diesel exports to Asia could rise 15% this year. "We believe the Chinese government will not restrain exports," Jefferies said in a note. "After all, it is a hassle-free solution to a domestic problem." For sure, analysts expect teapots to retain Beijing's backing. While some have operated for around 30 years, their current prominence is partly the result of politics: Chinese President Xi Jinping has targeted major state-owned Chinese oil companies, purging their top leaders amid a crackdown on corruption. "The [government]...sees competition from teapots as a way to impose discipline on the major national oil companies," analysts at the Oxford Institute of Energy Studies said in a report. Certainly, officials at the Qingdao port expect teapot crude demand to stay high. There are long lines of trucks on either side of the road leading up to the port, some waiting to load up crude from storage, others taking it out to the refiners. Their drivers sleep in their cabs or stand around idly chatting as they queue. The company that owns the Qingdao port has built a new terminal nearby to accommodate supertankers which can carry 450,000 tons of oil, 50% larger than the tankers its ports can currently handle. Workers are now operating through the night to complete storage facilities for the new port by late summer, according to a port company official. Crude imports to ports in Shandong province, the refining hub of China, increased 78% in the first quarter from a year earlier, due to "explosive growth" by the teapots, said the government. "These teapot refiners have become an indispensable element of China's crude imports," said Li Li, a director at ICIS China Research, a Guangzhou-based energy research firm. Write to Jenny W. Hsu at jenny.hsu@wsj.com Credit: By Jenny W. Hsu
Subject: Gasoline; Petroleum industry; Petroleum refineries; Chemical industry
Location: Beijing China
People: Confucius (551-479 BC)
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: China Petroleum & Chemical Corp; NAICS: 211111; Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 30, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792384136
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792384136?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Price Forecasts Rise as Oversupply Concerns Ease; Price rise takes pressure off OPEC over production cuts
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 May 2016: n/a.
Abstract: None available.
Full text: Analysts are once again raising their oil price forecasts, in a reflection of falling concerns over the glut in crude supply. That takes pressure off members of the Organization of the Petroleum Exporting Countries as they meet on Thursday , following months of fervent debate over production levels within the cartel. Investment banks surveyed by The Wall Street Journal hiked their price forecast for the third consecutive month this May, predicting that Brent crude, the international benchmark, will average $43 a barrel in 2016. That's up $2 from April's survey. The survey of 13 investment banks foresees the price of West Texas Intermediate, the U.S. oil gauge, averaging at $41 a barrel this year and $55 a barrel in 2017. "The market is conspiring to help OPEC," said Doug King, chief investment officer at RCMA Asset Management and manager of that firm's $240 million Merchant Commodity hedge fund. "If I was in the Saudis' shoes right now, I'd be pretty happy right now." Oil prices rose above the key $50 a barrel mark last Thursday for the first time since November. On Tuesday, Brent crude, the global benchmark, was trading down 0.1% at $49.70 a barrel. West Texas Intermediate, the U.S. crude benchmark, rose 0.6% to $49.60. Brent is up close to 80% from its lows earlier this year. Almost half a year of lower prices has dragged the year's average down. But analysts see a more positive trajectory for the second half of the year. By the fourth quarter of 2016, analysts expect oil to be trading at $48 a barrel, that's up from a prediction of $47 in April's survey. Analysts cut their forecasts throughout the start of this year amid a glut of oil and concern over the Chinese economy, the world's second biggest consumer of oil. But crude has rallied since it hit a decade low of below $30 early this year as U.S. output continued to decline and a series of production outages from Canada to Nigeria took barrels off the market. U.S. output has fallen from a peak of 9.7 million barrels a day in April 2015 to below 9 million barrels in recent weeks, according to government data. The rally is welcome news for OPEC, many of whose members have struggled to shore up their resource-dependent budgets during the nearly two-year old price rout. Few analysts expect OPEC to change its policy at this week's meeting in Vienna. "The urgency to do something is gone as prices have rallied," said Michael Wittner, chief oil analyst at Société Générale SA In late 2014, the group established a policy of pumping flat out in a bid to defend its market share against increased competition from the U.S. and others. The path to consistent prices gains is expected to be volatile. The banks in the survey see Brent averaging $43 a barrel in the third quarter of this year, below where it is trading now. Analysts say that supply disruptions, such as through civil unrest in Nigeria, will ease, sending more crude washing back into markets. Production from some OPEC members is also on the rise, including from Iran, which is ramping up its output after international sanctions were lifted in January. OPEC could face another familiar challenge: U.S. shale drillers. U.S. oil fields are peppered with drilled wells that haven't been activated and a $50 barrel is enough to now make them profitable, according to Citigroup. The recent price rally could release 400,000 barrels a day or more of new U.S. output, the bank said. "If oil stays above $50 a barrel, U.S. producers waiting on the sidelines could increase their output," said Mark Watkins, regional investment manager at the U.S. Bank Wealth Management, which oversees $128 billion in assets. "That's why rising prices are a mixed bag for OPEC." Corrections & Amplifications: By the fourth quarter of 2016, analysts expect oil to be trading at $48 a barrel. An earlier version of this article incorrectly said the time period was the fourth quarter of 2015. (May 31, 2016) Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 30, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792486329
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792486329?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Mixed Ahead of OPEC Meeting Thursday; July Brent crude fell $0.05 to $49.71 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2016: n/a.
Abstract:
U.S. oil prices and the international benchmark Brent moved in opposite directions in early Asian trade Tuesday as investors focus on the resumption of Canada oil production and ongoing supply disruptions in Africa ahead of the Organization of the Petroleum Exporting Countries meeting Thursday.
Full text: U.S. oil prices and the international benchmark Brent moved in opposite directions in early Asian trade Tuesday as investors focus on the resumption of Canada oil production and ongoing supply disruptions in Africa ahead of the Organization of the Petroleum Exporting Countries meeting Thursday. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $49.54 a barrel at 0234 GMT, up $0.21 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $0.05 to $49.71 a barrel. The major event for this week is the OPEC biannual meeting on June 2 in Vienna, which is unlikely to yield any formal consensus on curtailing production, analysts said. "OPEC has no reason to cut production at this point when the market is already moving back to an equilibrium," said Neil Beveridge, a senior analyst at Bernstein Research. "My expectation for the meeting is very limited." Earlier this week, Iraq's OPEC envoy Falah al-Amri told The Wall Street Journal there is no specific proposal on production on the meeting agenda. For nearly two years, oil prices have been in the trough as supply growth outstripped demand. In a low price climate, many producers inside and outside the cartel opted to ramp up output to defend their market shares, dragging prices further down. However, when prices hit a 13-year nadir in February, top producers such as Russia and Saudi Arabia floated the idea of a production freeze, a suggestion rejected by Iran. Since then, oil prices crept up nearly 90%, but remains more than 50% below what they were in mid-2014 as the global oil remains in excess. The market is also dealing with opposing news on global supply at the moment. In North America, U.S. crude production and inventories have shown a steady downtrend. The U.S. Energy Department expects the trend to persist at least until 2017. However, as wildfires in Canada's oil-sand hub is coming under control, the country's largest energy company Suncor Energy said it expects to commence production by the end of the week. Elsewhere, Nigeria's oil production and exports continue to be hampered by militant groups. The ongoing violence has plunged the country's oil production to the lowest level since 2009. "All the supply destructions and steep spending cuts are indicative of the improving fundamentals, as we expect global oil inventories to fall steadily in second-half of the year amidst record high demand," said Gordon Kwan, the head of oil and gas research at Nomura. Mr. Kwan brushed off speculations that high prices may entice once-marginalized U.S. shale producers to unlock their taps, pointing out that it would take months, perhaps years, before price increase can help U.S. production to rise above 9.6 million barrels a day. Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 39 points to $1.6280 a gallon, while June diesel traded at $1.5140, 200 points higher. ICE gasoil for June changed hands at $451.00 a metric ton, down $1.25 from Monday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Inventory; Petroleum production
Location: United States--US Canada Africa
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792436947
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792436947?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
'Teapot' Refineries Shore Up China's Demand for Crude; In April, privately owned refiners imported 1.2 million barrels of oil a day, about 15% of China's total crude imports
Author: Hsu, Jenny W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2016: n/a.
Abstract:
The congestion is because of a surge in oil imports from a group of privately owned refiners--dubbed "teapots" because of their small size compared with giant state-owned companies, such as China Petroleum & Chemical Corp., or Sinopec, PetroChina Co., and China National Offshore Oil Corp.--that is shaking up China's oil industry and stoking global markets. "Why should I keep my production at full capacity when my margin is low?" The teapots' ability to buy from international markets at a time when oil prices were continuing their slide gave them an advantage over their less efficient state-owned rivals, which often import based on long-term contracts fixed at high prices or buy expensively-produced crude from their own oil-producing units.
Full text: QINGDAO, China--While oil shipments to other parts of the world languish, this port in eastern China has an unusual problem--a lengthy queue of tankers waiting up to two weeks to unload their crude. The congestion is because of a surge in oil imports from a group of privately owned refiners--dubbed "teapots" because of their small size compared with giant state-owned companies, such as China Petroleum & Chemical Corp., or Sinopec, PetroChina Co., and China National Offshore Oil Corp.--that is shaking up China's oil industry and stoking global markets. Historically, these teapots have done most business with their larger domestic rivals, buying crude from them and processing it into gasoline and diesel. They still sell much of their output back to the big state-owned companies which run vast networks of gas stations across China. But since last July, in a bid to stir more competition in China's oil market, Beijing has begun granting teapots licenses and a quota to import crude oil. So far, 27 teapots have either received an import license or are waiting to be approved. Many of these can now export refined products for the first time too, a development analysts expect could reconfigure Asia's markets for gasoline and diesel. Already, the teapots are helping keep demand for oil high in the world's second biggest crude-importing country, in turn supporting global oil prices. Last month, teapots imported 1.2 million barrels of oil a day, Energy Aspects estimates, around 15% of China's total crude imports. Oil prices last week rose over $50 a barrel for the first time in six months. As Beijing tries to tackle China's chronic pollution problem, the teapots are also trying to shed their reputation as dirty and having low safety standards. At Shandong Chambroad Petrochemicals Co., one of the larger teapots based a three-hour drive from Qingdao, a giant statue of Confucius teaching five of his followers greets visitors to the main office. Inside, posters plastered to elevator walls list the company's social values. Just a few hundred meters away crude is being processed, yet there is no smell of gasoline in the air. Administrative staff here exercise together each day at 10 a.m.: Workers in the main refinery work 12-hour shifts, resting for the following 24 hours. Chambroad has recently agreed to import 730,000 barrels of crude from Saudi Arabian Oil Co., or Saudi Aramco, this year, the first teapot to do a deal with Saudi Arabia's state-owned behemoth. Chambroad's managers, who declined to be named for this article, acknowledge their role in changing China's oil industry. "Yes, we are becoming a threat to the state-owned enterprises," said one company official. Still, teapots could cut back on output as prices rise and their margins narrow. Already, 16 teapots including Chambroad have formed a coalition to bargain collectively with suppliers to get better deals. "It is fine to earn less, but it is not fine to have a net loss," the Chambroad official said. "Why should I keep my production at full capacity when my margin is low?" The teapots' ability to buy from international markets at a time when oil prices were continuing their slide gave them an advantage over their less efficient state-owned rivals, which often import based on long-term contracts fixed at high prices or buy expensively-produced crude from their own oil-producing units. The teapots produce gasoline and diesel around $10 a barrel cheaper on average than giants like Sinopec, according to analysts BMI Research. "A drop in teapot buying would impact prices...It would lead to lower imports from China and concerns about the health of Chinese economy and appetite for buying," said Michal Meidan, an analyst at Energy Aspects. China's slowing economy could prove a headwind too. The country's demand for diesel, which accounts for most refinery output, has slipped 4.1% this year according to data from HSBC, thanks largely to moribund industrial production. That is encouraging teapots to expand overseas. Chambroad says it plans to start exporting a low-polluting type of gasoline it has developed to the Southeast Asian market during this quarter. It hopes to make 20% of its sales overseas this year mostly, it says, to companies that have their own gas stations like BP PLC and Royal Dutch Shell PLC. As other teapots look to export more, they could take market share from other regional producers. Analysts at brokerage Jefferies Group LLC reckon China's diesel exports to Asia could rise 15% this year. "We believe the Chinese government will not restrain exports," Jefferies said in a note. "After all, it is a hassle-free solution to a domestic problem." For sure, analysts expect teapots to retain Beijing's backing. While some have operated for around 30 years, their current prominence is partly the result of politics: Chinese President Xi Jinping has targeted major state-owned Chinese oil companies, purging their top leaders amid a crackdown on corruption. "The [government]...sees competition from teapots as a way to impose discipline on the major national oil companies," analysts at the Oxford Institute of Energy Studies said in a report. Certainly, officials at the Qingdao port expect teapot crude demand to stay high. There are long lines of trucks on either side of the road leading up to the port, some waiting to load up crude from storage, others taking it out to the refiners. Their drivers sleep in their cabs or stand around idly chatting as they queue. The company that owns the Qingdao port has built a new terminal nearby to accommodate supertankers which can carry 450,000 tons of oil, 50% larger than the tankers its ports can currently handle. Workers are now operating through the night to complete storage facilities for the new port by late summer, according to a port company official. Crude imports to ports in Shandong province, the refining hub of China, increased 78% in the first quarter from a year earlier, due to "explosive growth" by the teapots, said the government. "These teapot refiners have become an indispensable element of China's crude imports," said Li Li, a director at ICIS China Research, a Guangzhou-based energy research firm. Write to Jenny W. Hsu at jenny.hsu@wsj.com Credit: By Jenny W. Hsu
Subject: Gasoline; Petroleum industry; Petroleum refineries; Chemical industry
Location: Beijing China
People: Confucius (551-479 BC)
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: China Petroleum & Chemical Corp; NAICS: 211111; Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792443424
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792443424?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Price Forecasts Get More Bullish as Oversupply Concerns Ease; Price rise takes pressure off OPEC over production cuts
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2016: n/a.
Abstract: None available.
Full text: Analysts are again raising their oil-price forecasts, in a reflection of falling concerns over the glut in crude supply. That helps relieve the pressure on members of the Organization of the Petroleum Exporting Countries--who are set to meet on Thursday--following months of fervent debate over production levels within the cartel. Investment banks surveyed by The Wall Street Journal raised their price forecast for the third consecutive month in May, predicting that Brent crude, the international benchmark, would average $43 a barrel in 2016. That is up $2 from April's survey. The survey of 13 investment banks predicts that the price of West Texas Intermediate, the U.S. oil gauge, will average $41 a barrel this year and $55 a barrel in 2017. "The market is conspiring to help OPEC," said Doug King, chief investment officer at RCMA Asset Management and manager of that firm's $240 million Merchant Commodity hedge fund. "If I was in the Saudis' shoes right now, I'd be pretty happy right now." Oil prices rose above $50 a barrel last Thursday for the first time since November. Late Tuesday morning in New York, Brent crude was trading up 21 cents, or 0.2%, at $50.57 a barrel. West Texas Intermediate was up 50 cents, or 1%, to $49.83. Brent is up close to 80% from its lows earlier this year. Almost six months of lower prices has dragged the year's average down. But analysts see a more-positive trajectory for the second half of the year. By the fourth quarter of 2016, analysts expect oil to be trading at $48 a barrel, up from a prediction of $47 in April's survey. Analysts cut their forecasts throughout the start of this year amid a glut of oil and concern over the Chinese economy, the world's second-biggest consumer of oil. But crude has rallied since it hit a decade low of less than $30 early this year as U.S. output continued to decline and a series of production outages from Canada to Nigeria took barrels off the market. U.S. output has fallen from a peak of 9.7 million barrels a day in April 2015 to less than nine million barrels in recent weeks, according to government data. The rally is welcome news for OPEC, many of whose members have struggled to shore up their resource-dependent budgets during the nearly two-year old-price rout. Few analysts expect OPEC to change its policy at this week's meeting in Vienna. "The urgency to do something is gone as prices have rallied," said Michael Wittner, chief oil analyst at Société Générale SA. In late 2014, the group established a policy of pumping flat out in a bid to defend its market share against increased competition from the U.S. and others. The path to consistent prices gains is expected to be volatile. The banks in the survey see Brent averaging $43 a barrel in the third quarter of this year, below where it is trading now. Analysts say that supply disruptions, such as through civil unrest in Nigeria, will ease, sending more crude washing back into markets. Production from some OPEC members is also on the rise, including from Iran, which is ramping up its output after international sanctions were lifted in January. OPEC could face another familiar challenge: U.S. shale drillers. U.S. oil fields are peppered with drilled wells that haven't been activated and a $50 barrel is enough to now make them profitable, according to Citigroup. The recent price rally could release 400,000 barrels a day or more of new U.S. output, the bank said. "If oil stays above $50 a barrel, U.S. producers waiting on the sidelines could increase their output," said Mark Watkins, regional investment manager at the U.S. Bank Wealth Management, which oversees $128 billion in assets. "That's why rising prices are a mixed bag for OPEC." Corrections & Amplifications: By the fourth quarter of 2016, analysts expect oil to be trading at $48 a barrel. An earlier version of this article incorrectly said the time period was the fourth quarter of 2015. (May 31, 2016) Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792473277
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792473277?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
OPEC Future at Stake Amid Saudi Oil Shift
Author: Said, Summer; Spindle, Bill; Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 May 2016: A.1.
Abstract:
The foundations of the deputy crown prince's plans -- which include selling shares of the national oil company, Saudi Arabian Oil Co., known as Saudi Aramco, to the public, reducing domestic subsidies for energy and building out the country's petrochemical industry -- are built on Mr. Falih's work at Saudi Aramco, where he was chief executive from 2009 to 2015.
Full text: As the Organization of the Petroleum Exporting Countries prepares to meet this week, representatives say there is little mystery about the outcome of the gathering: Any coordinated action on production cuts is unlikely. Instead, the major questions are likely to concern the group's future after the appointment of its newest representative, Khalid al-Falih, Saudi Arabia's new energy minister. Mr. Falih, appointed minister of energy, industry and mineral resources this month, joins a long line of powerful OPEC representatives from the kingdom, by far the group's biggest producer. They include Sheikh Zaki Yamani, who orchestrated the oil embargoes of the 1970s; and Mr. Falih's predecessor, Ali al-Naimi, who dominated OPEC decision-making for a quarter-century. But for those two ministers, managing OPEC and thus global oil markets was their main job. Mr. Falih has a full plate of other urgent responsibilities in Saudi Arabia's increasingly complex energy economy. Pressure to overhaul that economy, coupled with rising tensions between Saudi Arabia and Iran, also mean that Mr. Falih is operating with much less flexibility when OPEC's ability to patch up internal differences to make coordinated decisions is already being tested. "The Falih appointment is clearly about domestic policy more so than international oil policy," said Yasser Elguindi, an oil analyst at U.S.-based consultancy Medley Global Advisors. "The coming period is going to be a real test of whether or not OPEC is still alive," said Mohammad al-Sabban, an independent oil analyst and former senior adviser to the Saudi oil ministry. Rising prices in recent weeks have taken some of the pressure off OPEC to act at its biannual meeting in Vienna on Thursday. After almost two years of plunging prices, crude-oil prices have nearly doubled and briefly traded above $50 last week. Saudi Arabia and its Persian Gulf Arab allies in OPEC like Kuwait see rising prices as vindicating the new direction they forged at their November 2014 meeting. They wagered that booming U.S. output would render its most important tool -- production cuts -- impotent, and that it was better for the group to pump flat out to keep customers, in hopes that the market would balance itself out eventually. There is no specific proposal on production on the meeting's agenda, said Falah al-Amri, Iraq's OPEC envoy. That was echoed by several OPEC representatives who met in Vienna ahead of the gathering. Concerns about Saudi Arabia's commitment to strengthening OPEC have flared within the group in the run-up to the meeting, as some of the usual outreach to fellow OPEC country representatives has been slow to happen, according to members of the group. Mr. Falih and other Saudi officials didn't respond to requests for comment. Saudi Arabia is at a crossroads, five years after popular uprisings that ousted several regimes in the Middle East, and a little more than a year after the ascension of a new king who will be the last of the sons of Saudi Arabia's founder to rule. The king has consolidated power in the hands of his son,30-year-old Deputy Crown Prince Mohammed bin Salman, over nearly everything that matters in the kingdom, including all the important economic ministries, and has big plans for the country's energy sector, which is key to even bigger plans for the economy as a whole. Mr. Falih will play a major role in those plans. He was handpicked by the deputy crown prince on the heels of the prince's unusual move last month to scotch negotiations between some members of OPEC and key non-OPEC countries over a production freeze. Prince Mohammed's late intervention, sending the message that there would be no freeze without Iran's participation, sent shock waves through OPEC by bluntly prioritizing Riyadh's domestic economic and political goals over those of fellow OPEC members. That inward focus intensified a few weeks later when Prince Mohammed announced his sweeping plan to overhaul Saudi Arabia's economy to radically reduce its dependence on oil. No one is more acutely aware than Mr. Falih of what the transformation plan means for the kingdom's energy policies and oil-related industries -- and how those imperatives limit the kingdom's dealings with OPEC. While richer members like Saudi Arabia and the United Arab Emirates are content with the status quo, poorer members like Venezuela and Algeria want the cartel to return to its more interventionist ways. The foundations of the deputy crown prince's plans -- which include selling shares of the national oil company, Saudi Arabian Oil Co., known as Saudi Aramco, to the public, reducing domestic subsidies for energy and building out the country's petrochemical industry -- are built on Mr. Falih's work at Saudi Aramco, where he was chief executive from 2009 to 2015. Mr. Falih's new ministry now includes the country's power sector. Domestic demand for electricity has skyrocketed in recent years as the population has grown and government subsidies have made power cheap. That directly affects crude exports, as the kingdom burns oil to make about one-quarter of its total electricity. As much as 900,000 barrels a day are needed during some hot summer days, almost one in every 10 barrels it produces. That gives Mr. Falih less flexibility to scale back or ramp up production in response to political developments, to influence prices or even to stabilize the market after unexpected shocks. Analysts said Thursday's meeting is likely to cement OPEC's transition from cartel to massive market player whose influence comes from its vast share of the market. "It's really a new chapter in Saudi oil policy," said Antoine Halff, an oil economist and fellow at the Center on Global Energy Policy at Columbia University in New York. The kingdom is negotiating to build a refinery in India, another rising global power analysts say will likely be the fastest-growing energy market over the next few decades. Credit: By Summer Said, Bill Spindle and Benoit Faucon
Subject: Cartels; Petroleum production; Crude oil prices
Location: Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Classification: 8510: Petroleum industry; 9178: Middle East
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: May 31, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792475102
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792475102?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Fear of Outages Lifts Oil --- Supply disruptions in Nigeria, Canada and Libya bring back risk premium into market
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 May 2016: C.1.
Abstract:
Unused production capacity that the Organization of the Petroleum Exporting Countries can bring on quickly has dwindled, and the glut of output from other producers, including U.S. shale companies, has ebbed as companies cut back amid lower prices. During the 2011 Arab Spring uprisings and the overthrow of Libyan leader Moammar Gadhafi, supply disruptions helped lift global crude prices above $110 a barrel on average that year and in 2012, up from an average of about $80 a barrel in 2010. Since late 2012, global supply disruptions have held more than two million barrels a day off the global crude market, according to ClearView.\n
Full text: Oil-supply outages are at their highest level in more than a decade, bolstering the "fear premium" that has helped push crude prices higher to $50 a barrel. About 3.5 million barrels a day worth of production is offline because of disruptions such as militant attacks in Nigeria, wildfires in Canada and political unrest in Libya -- more than 3% of the global total, according to research firm ClearView Energy Partners LLC. That is likely the highest since the Iraq war hit output there in 2003, said Jacques Rousseau, the firm's managing director of oil and gas. At the same time, there is less slack to fill supply gaps. Unused production capacity that the Organization of the Petroleum Exporting Countries can bring on quickly has dwindled, and the glut of output from other producers, including U.S. shale companies, has ebbed as companies cut back amid lower prices. "There isn't a lot of extra supply out there," said Ann-Louise Hittle, lead oil-market analyst at energy-consulting firm Wood Mackenzie. "That's when you start to get a risk premium back in the market. It is absolutely to be expected and it is, in our opinion, just the beginning." Natural disasters or political unrest in oil-producing nations can halt production and disrupt shipping routes. Such events have historically boosted oil prices because traders worry about the availability of future supplies. In 2014 and 2015, however, the oil market mostly ignored occasional supply disruptions, from sanctions on Iran to export-terminal closures in Libya. Traders focused instead on the growing crude surplus produced by U.S. shale companies, sending prices tumbling 76% before they bottomed out in February. After talks of an output freeze among major producing nations fizzled in April, traders say, the reduced supply from unplanned outages has been a primary factor driving U.S. oil prices from below $27 a barrel in February to more than $50 a barrelintraday on Thursday. U.S. crude settled Friday at $49.33 a barrel, down 0.3%. On Monday, Brent crude, the global benchmark, rose 44 cents to $49.76 a barrel. A strike by oil workers in Kuwait in April briefly shut down nearly half the Gulf nation's production. Wildfires in Alberta, Canada, this month forced the shutdown of production facilities in the country's oil-sands region. In Nigeria, a militant group calling itself the Niger Delta Avengers has claimed responsibility for attacks on a production facility and an export terminal. The country's output has fallen to the lowest level since 2009. Some think the rise in outages is in part a byproduct of depressed crude prices. When oil is cheap, producing nations' budgets suffer. That makes it harder for some governments to boost spending to head off unrest and deprives oil facilities of money needed for maintenance and recovery. "At $100 a barrel, you can paper over a lot of problems with money," said Helima Croft, head of commodities strategy at RBC Capital Markets. "2016 is proving to be the year of reckoning for the weakest producers." Some analysts think the boost from the disruptions may already be waning. Canadian officials have lifted a mandatory evacuation order on certain production sites in Alberta, and Kuwait's output has returned to normal. Even in Libya, where unrest has kept the country's production below capacity for years, some analysts expect exports to increase. "Some of the bullish sentiment has to ease," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, which oversees $128 billion. "There's some limits to how far this can go." Others aren't so sure that supply disruptions are going away. Iraq, Nigeria and Venezuela together produced 25% of OPEC's total crude output in April, according to the International Energy Agency. Each is struggling with outages or potential disruptions. Iraq is trying to keep its production high amid the threat of Islamic State. Many analysts warn that production could fall in Venezuela because of chronic power outages in the cash-strapped nation and disputes about payments to international oil-field-service providers. Militant attacks continue in Nigeria, including one related to a Chevron Corp. facility on Thursday. "You could be looking at a sustained outage for a long period," Ms. Croft at RBC said of the country's total output. Unplanned production outages are the highest since at least 2003, when the war in Iraq briefly halted nearly all production in that country, analysts say. During the 2011 Arab Spring uprisings and the overthrow of Libyan leader Moammar Gadhafi, supply disruptions helped lift global crude prices above $110 a barrel on average that year and in 2012, up from an average of about $80 a barrel in 2010. Since late 2012, global supply disruptions have held more than two million barrels a day off the global crude market, according to ClearView. Fear of lost production after Islamic State seized some Iraqi cities briefly helped push global oil prices above $110 a barrel in mid-2014. If supply was still growing fast, disruptions might not affect prices as much. But production in the U.S. and other parts of the world is falling as companies cut back. "Today, it doesn't look like we will see a return to excess supply conditions," said Bo Christensen, chief analyst at Danske Invest, which manages $100 billion in assets. "That makes the market susceptible to other types of risks, of course including geopolitical risks."
Credit: By Nicole Friedman
Subject: Abreast of the market (wsj); Crude oil prices; Petroleum production
Classification: 8510: Petroleum industry; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: May 31, 2016
column: Abreast of the Market
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792475106
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792475106?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Retreats at $50 Again; Supply disruptions from places like Canada, Nigeria push prices higher but are likely to prove temporary
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2016: n/a.
Abstract:
"Supply and demand are working and, this is the essence of this policy," said Mr. Mazrouei speaking to reporters in Vienna ahead of the meeting of the Organization of the Petroleum Exporting Countries on Thursday.
Full text: Oil prices touched $50 and quickly faded, repeating a pattern from last week amid warnings from analysts that oil's strongest rally in seven years may have gone too far on tenuous factors. At $50, oil has rallied about 90% in less than four months, even though near-record-high inventories haven't drained. Unexpected supply disruptions from places like Canada and Nigeria have pushed prices to a nearly eight-month high, but many factors suggest they are temporary and analysts have warned they can't sustain high prices alone. The Organization of the Petroleum Exporting Countries is also expected to do very little to cap supply or help boost prices when its members meet Thursday. That view was reinforced Tuesday by United Arab Emirates' energy minister, Suhail bin Mohammed al-Mazrouei, who said the market was correcting itself in line with OPEC policy. Prices dropped from small gains around the same time news outlets reported his comments. "Supply and demand are working and, this is the essence of this policy," said Mr. Mazrouei speaking to reporters in Vienna ahead of the meeting of the Organization of the Petroleum Exporting Countries on Thursday. U.S. crude oil for July delivery settled down 23 cents, or 0.5%, at $49.10 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, lost 7 cents, or 0.2%, to $49.69 a barrel on ICE Futures Europe. Both still finished up for the fourth straight month. U.S. oil gained 6.9% in May and Brent gained 3.2%. Traders said it is common for volatility to die when the market approaches a round number like $50. It is a popular point for automatic buy and sell orders, and options strike prices, causing many traders to pause and reassess when prices cross that line. Volatility has fallen steadily and is at its lowest point since the fall of 2014. Many have bought oil in a bet that low prices are leading to falling production, higher demand and, soon, a rebalancing market that could end up in short supply. Fires in Canada and militant attacks on the oil industry in Nigeria have nearly brought supply into balance, adding fuel to the rally, analysts have said. But those could just be temporary factors. And while daily supply is closer to balanced, inventories are still historically full and likely to keep a lid on prices until signs appear those levels are falling significantly, analysts have said. "We're right near $50. The market...priced a lot of expectations in, and now we need to see whether those expectations are accurate," said Gene McGillian, an analyst at Tradition Energy. A 20-month fall in prices that bottomed in February does have U.S. producers in a slight retreat. Their output has shown a steady downtrend, which the U.S. Energy Department expects to persist at least until 2017. U.S. government data released Tuesday showed domestic crude output fell 0.1% in March to 9.1 million barrels a day, a 5.4% decline from a year before. Output in key shale locations Texas and North Dakota fell in the month, but production rose in other regions including the offshore Gulf of Mexico. Pennsylvania and Alaska. Stockpiles at Cushing, Okla., fell by 687,000 barrels in the week that ended Friday, data provider Genscape Inc. said at 10 a.m. Tuesday, according to a person who had reviewed the report. Cushing is the delivery point for the benchmark U.S. West Texas Intermediate oil contract, and WTI added to gains after the report. Recent inventory declines in the U.S. have been tied to a shortage of oil coming from Canada, where wildfires in the Alberta province have hit the country's oil-sands hub. The country's largest energy company, Suncor Energy, said it expects to restart production by the end of the week. However, that doesn't necessarily mean prices should immediately fall, analysts said. "A lot of people have been overly confident about the speed at which Albertan oil will come back," said John Saucer, vice president of research and analysis at Mobius Risk Group in Houston. "We're going to get some of that production back, but it's going to be awhile before we get it all back." Gasoline futures settled down 1.7 cents, or 1%, at $1.6149 a gallon. It finished the month up 3.01 cents, or 1.9%, its third straight monthly gain. Diesel futures gained 0.35 cent, or 0.2%, to $1.4975 a gallon. It finished the month up 11.96 cents, or 8.7%, its fourth straight monthly gain. Kevin Baxter, Nicole Friedman and Georgi Kantchev contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Supply & demand; Inventory; Price increases
Location: United States--US Canada Nigeria
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792513318
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792513318?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Brazil's Petrobras Board Names Pedro Parente as New CEO; Replaces Aldemir Bendine in the top position at the state-run oil firm
Author: Jelmayer, Rogerio
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2016: n/a.
Abstract: None available.
Full text: SÃO PAULO--The board of Brazil's state run oil firm Petróleo Brasileiro SA, or Petrobras, named Pedro Parente as the company's new CEO. The name of Mr. Parente, who replaces Aldemir Bendine in the post, was announced earlier this month by Brazil's acting President Michel Temer, as part of a broad shuffle of top government jobs. Mr. Parente, formerly the top executive at the Brazilian unit of U.S. agribusiness giant Bunge Ltd. and currently chairman of stock-market operator BM&FBovespa SA, will assume the top spot at Petrobras as it is facing a challenging scenario due to its high debt. Earlier this month, the administration of Mr. Temer also appointed new heads for state run banks BNDES, Banco do Brasil and Caixa Economica Federal. Previously, banking executives were named by Dilma Rousseff, who had to step aside as the country's president a few weeks ago to face an impeachment trial in the Senate. She was replaced by then Vice President Mr. Temer. Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com Credit: By Rogerio Jelmayer
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 31, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 17925 38561
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792538561?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Linc USA Files for Chapter 11 to Sell Oil, Gas Assets
Author: Palank, Jacqueline
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2016: n/a.
Abstract:
Court papers show that Linc USA's operations include onshore and shallow-water oil and gas production along Texas's Gulf Coast, Wyoming's Powder River Basin and Alaska's Umiat field.
Full text: Facing a looming default on its debt, Australia's Linc Energy Ltd. (BRE.SG) put its U.S. oil-and-gas business into bankruptcy and plans to sell its Gulf Coast, Alaska and Wyoming holdings. Linc USA GP and several affiliates, which filed for chapter 11 protection on Sunday, are due to make their first appearance in the Houston bankruptcy court Tuesday afternoon. In court papers, Linc USA said if it can't start drawing on $10 million in bankruptcy financing, it won't be able to make payroll or cover other operating costs, threatening the value of the assets it hopes to sell. It has asked the court to take up the funding request at Tuesday's hearing. Linc USA joins the dozens of oil-and-gas producers that have sought chapter 11 protection in the wake of falling commodities prices. Jude Rolfes, Linc USA's vice president of corporate development, said in court papers that the company was "especially vulnerable" to the price falls because of an aggressive drilling program it launched in 2012. The company halted those efforts in late 2014 as prices began falling. Despite cost-cutting efforts, the company's cash crunch became evident last year. It missed $22 million in interest payments due in April 2015 on $125 million in first-lien notes and $265 million in second-lien notes and faced another interest payment due in October 2015. However, Linc USA was able to make up the missed interest payments with a capital contribution from its Australian parent. It also reached a deal to issue additional second-lien notes to cover the October 2015 interest payment rather than pay it in cash, among other amendments. More comprehensive restructuring talks followed, with Linc USA seeking new capital from its parent company that would help it slash its debt. But an out-of-court restructuring didn't pan out. Linc Energy launched insolvency proceedings in Australia on April 15; Linc USA missed $24 million in interest payments on its notes that were due April 30. With the clock ticking on a 30-day grace period to avoid default as a result of the missed interest payments, Linc USA sought bankruptcy protection to carry out the asset sales. The holders of more than 75% of Linc USA's first-lien notes have agreed to provide $10 million in bankruptcy financing to support the company's efforts. Court papers show that Linc USA's operations include onshore and shallow-water oil and gas production along Texas's Gulf Coast, Wyoming's Powder River Basin and Alaska's Umiat field. It has 150 producing wells on the Gulf Coast and 31 wells in the Powder River Basin. The company estimates that its largely undeveloped acreage in Umiat field has probable reserves of 99 million barrels of oil. Write to Jacqueline Palank at jacqueline.palank@wsj.com Credit: By Jacqueline Palank
Subject: Bankruptcy; Bankruptcy reorganization
Location: Alaska Wyoming Australia United States--US
Company / organization: Name: Linc Energy Ltd; NAICS: 221122, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 31, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792603151
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792603151?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Change: Affluent Saudi Arabia Goes to Work; Deputy crown prince's urgent plan to wean kingdom from petroleum will mean deep changes in a conservative society long accustomed to handouts
Author: Bill Spindle; Ahmed al Omran; Spindle, Bill; Ahmed al Omran
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2016: n/a.
Abstract: None available.
Full text: RIYADH--Saudi Arabia's leadership has taken up the challenge of weaning the kingdom from its dependence on oil. Ahmed Ameen is just trying to keep his mobile-phone store open. Mr. Ameen hired a foreign worker to operate the shop in Saudi Arabia's capital four months ago, but the worker left the kingdom after learning that a key part of the government's economic strategy is to replace foreign workers with Saudis. "My shop is now closed and every day I'm losing money," said Mr. Ameen, who has a day job and can't run it himself. The lofty goal of the kingdom's leadership--which is being rolled out in phases with a vision statement in April and a more-detailed plan expected within days--might seem far removed from Mr. Ameen's small-business struggles. But they are part of the same daunting challenge: dismantling the world's biggest petrostate. King Salman bin Abdulaziz al Saud, an octogenarian who will be the last son of the modern kingdom's founder to rule the country, has concentrated unprecedented power in his own 30-year-old son, Prince Mohammed bin Salman. The deputy crown prince, second in line to the throne, runs all economic and domestic policy, as well as the country's military. Prince Mohammed has in turn launched a historic effort to remake the conservative, change-averse kingdom--in a hurry. "The younger generation is really taking over," said Jean François Seznac, a professor at Georgetown University who studies Arab Gulf economies. "He's their representative." The challenge is immense. Since crude was first discovered there in 1938, the kingdom has developed into one of the quintessential economic constructs of the oil age. The billions of barrels of crude oil it has pumped and sold to the world have forged its politics and economy--indeed the very essence of its society--in ways that could prove deeply painful to undo. Saudi citizens enjoy deeply discounted gasoline, water and electricity. Housing is subsidized. Their health care is paid for by the government, as is their education, including stints studying abroad. They aren't taxed. Businesses have depended on cheap energy and ready access to cheap foreign labor. In return, the country's royal family has expected a pliant population that follows its leadership. But the social compact is breaking down--and not just because of declining oil prices. Demographics are overwhelming the petrostate. By 2030, the number of Saudis over the age of 15 will likely increase by about six million, bringing at least 4.5 million new eligible workers into the labor force, and even more if women begin working in larger numbers, according to a study by the McKinsey Global Institute. The independent think tank is affiliated with McKinsey & Co., the management consultancy the Saudi government has hired to help guide the economic overhaul. That will more than double the size of the adult population, simultaneously stretching the kingdom's cradle-to-grave system of handouts and subsidies to the breaking point while requiring the creation of almost three times as many jobs as the country generated during the height of the recent oil boom between 2003-2013, McKinsey concluded. In response, the government envisions a broad diversification of the economy beyond crude exports. Saudi Arabia's new leadership plans to privatize chunks of many government companies, starting with a stake of up to 5% of the Saudi Arabian Oil Co., the country's colossal national oil company better known as Aramco. Also on the table: expanding more aggressively into higher-value refined products such as gasoline and petrochemicals, developing a tourist industry and building a manufacturing base. Senior government officials declined interview requests. As the outlines emerge publicly, segments of Saudi society are expressing unease. The kingdom's arch-conservative clerical class, long assuaged by a flood of oil funds to finance their privileged place in Saudi society, chafe over the government's efforts to expand women's participation in the public workplace. "We are sad to see a female employee among men," Abdullah al-Dawood, a conservative writer, said on Twitter in March. Businesses, underpinned for decades by the wholesale importation of millions of cheap foreign workers and government-subsidized inputs like energy, reel from new requirements that they replace those laborers with expensive Saudi workers and confront a more-competitive market. Even parts of the royal family--a sprawling network that has swollen to some 5,000 princes over the decades--are uneasy with the plan's focus on creating a competitive market-based economy to replace the connections and cronyism that have been pillars of the petrostate, according to insiders. Last fall, two anonymous open letters attributed to a Saudi prince circulated publicly expressing displeasure with recent changes and calling for the king to step down. "It's a new paradigm. We're entering uncharted territory," Hossein Shobokshi, a Jeddah-based businessman and commentator, told a gathering of financiers and business leaders at a recent conference sponsored by Euromoney. One of the major challenges isn't just to create more private-sector jobs, but also to convince young citizens to take these jobs. That is particularly important, but also especially difficult, in areas like retail. Jobs in sales, repair and low-level management have long been filled by foreign workers who are inexpensive and willing to work long hours. Now the Saudi government is sending those workers home, and trying to entice Saudi citizens to assume their place. The Ministry of Labor and Social Development decided in March to replace all foreigners who work in shops for sales and maintenance of mobile phones with Saudi nationals by the beginning of September. The government figures this new ban on foreign workers will create more than 20,000 job opportunities for locals. The government is adamant about the latest drive--commonly known as "Saudization"--despite difficulties in the past when they tried to replace foreigners with locals in vegetable markets and jewelry shops. Since announcing the decision, the ministry has launched a nationwide media campaign. It even converted a bus into a mobile branch to visit different parts of the country to promote the plan. The bus, with two large monitors running promotional videos instead of windows, made several stops near mobile-phone shops in Riyadh in May. Inside, officials with laptops took down hundreds of names of Saudi job seekers. The Technical and Vocational Training Corp., one of the government's arms spearheading the program, said in late May that 19,084 men and women have been trained and are ready to take jobs in the sales, customer service and basic maintenance of mobile phones. Mr. Ameen, the mobile-phone store owner, remains skeptical that the government will be able to train enough people in time to make the plan work within the deadline set by the ministry. "It's a very big mess. They have to give us at least two years to do this. The sector has been controlled by foreigners for many years," Mr. Ameen said. He added that he wouldn't consider opening another business in the country if the government continues to enforce policies like that. "I will move my business to Dubai or somewhere else," he said. Young Saudis have over the years acquired a reputation of looking down on manual work. But Abdulaziz al-Buti, 23, who recently entered the training program, says attitudes have changed as the job market has become more competitive and expectations of support from the government diminished. "What is important is your acceptance of the job and not what society thinks," said Mr. al-Buti, who dropped out of college and worked as a supermarket cashier. He noted that he enjoys tinkering with electronics and gadgets. "Success will come from your resilience. If you love the work then nothing can stop you." Another measure that authorities have been considering is to force most retail outlets to close by 9 p.m. instead of 11 p.m. or midnight. But this proposal has proved to be polarizing. Supporters say it would make retail jobs more attractive to Saudis because it will allow them to finish work early enough to return home to spend time with their families. Most foreign workers in retail now are single men, or if married don't have their families with them in the kingdom. They aren't able to switch jobs easily, either, as Saudi workers can, if a better offer comes up. Opponents argue that limits on store hours are impractical in a country where all businesses are already forced to close five times a day for prayer and where temperatures are often blazing hot during the day. Most people prefer to shop and run errands in the evening. Those critics say if the government wants shops to close by 9 p.m., they shouldn't be forced to close for prayers. Yet that would draw the ire of religious conservatives, who view the enforced break for prayers as part of the country's Islamic identity. Tourism is another area leaders are keen to develop as part of the new plan. But it, too, is an industry the government has struggled with as the society's deep religious conservatism has found common cause with a powerful construction industry fed by government oil revenues. The holy city of Mecca draws tens of millions of visitors annually during the hajj pilgrimage. That suits huge Saudi construction companies controlled by powerful, connected families, which have made fortunes building new luxury hotels and shopping malls there. Muslim holy cities remain off limits to non-Muslims, though some religious scholars recently argued that the ban should be limited to Mecca and not Medina, where the prophet Mohammad is buried. The kingdom still doesn't issue tourist visas, but the government says it plans to start soon. Some tourism boosters would like to turn the country into a year-round destination that would welcome visitors from all over, capitalizing on archeological treasures and scuba diving. But the country's clerical class has frequently lobbied for the destruction of ancient Islamic monuments and historical sites, which their austere brand of Wahabbi Islam views as distractions from God and his prophet. Some residents of the ancient trading city of Jeddah, a port on the Red Sea, are trying to change that. The city's historic quarter was largely abandoned by Saudi residents who moved into more spacious suburbs as the oil money flowed into the country in the 1960s and 1970s. A movement to revitalize the old city is now taking hold, with a variety of government-supported efforts to restore historic homes. New projects teach restoration and carpentry skills needed to renovate crumbling old homes in a district that Unesco named a World Heritage site in 2014. "The vision now is to mix the old with the new," said Ali Khormi, a 42-year-old Jeddah native who works as a guide. "Tourism depends on that vision." The biggest challenge for the kingdom's overhaul of the petrostate, however, will likely be its hopes of building a diversified manufacturing base. That is particularly difficult to do in an economy where the flood of oil dollars tends to drive up the price for Saudi labor, making other exports too costly to compete in foreign markets. The kingdom's tightly controlled labor market featuring foreign workers had been a way to sidestep that problem. To the extent Saudi Arabia has succeeded in building globally competitive export businesses beyond oil--in petrochemicals, for example, and aluminum production--it has leaned heavily on the advantage cheap energy has provided. Those two business models, both highly subsidized by the state, have been "about wealth creation" for business owners, not "economic value creation," said Iyad al Zaharnah, director of the Innovation Center at King Fahd University for Petroleum and Minerals. "Neither encouraged innovation. We knew that would have to change." Now the center sees itself at the cutting edge of a suddenly energized Saudi Arabia. It recently opened a business incubator, complete with an open floor layout where various student business startups work side-by-side. Cubicle walls are plastered with can-do slogans from Silicon Valley entrepreneurs and Chinese philosophers. The center has forged tie-ups with multinational companies such as General Electric Co. and China's Sinopec to work jointly on research and developing businesses. It has developed dozens of new patents and 90 new products, including a water purification process that is being used in some U.S. shale oil fields. The government recently scored a win when GE announced it would invest at least $1.4 billion and double its workforce in the kingdom to 4,000 by 2020. The conglomerate plans to team up with two partners, including Aramco, to build a $400 million manufacturing facility for the energy and marine sector. Now the university's business incubator is developing case studies in Arabic, and trying to tap into the youngest members of some of the kingdom's prominent merchant families. "It's all about the mind-set," said Wail Moussa, head of the incubator, known as the Entrepreneurship Institute. Write to Bill Spindle at bill.spindle@wsj.com and Ahmed al Omran at Ahmed.AlOmran@wsj.com Credit: By Bill Spindle and Ahmed al Omran
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 31, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792609219
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792609219?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Why Oil's Cost Is as Important as Its Price; Cheaper services are allowing some oil producers to survive, particularly in Russia, while others, such as Venezuela, are facing steep production declines
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2016: n/a.
Abstract:
Deutsche Bank oil-field-services analyst Mike Urban estimates that exploration-and-production companies have cut well costs by 30% to 50% in that time--but that half to two-thirds of that is "cyclical."
Full text: Most investors can tell you how much a barrel of oil fetches today. Those in the industry can, too, of course, but they are watching another number closely: how much it costs to produce that barrel. While that varies geographically and geologically, it has become cheaper nearly everywhere. And that has an impact on where the production declines will occur that are needed to balance oil supply and demand. In North America, for example, where relatively expensive but abundant shale oil fields transformed the market in recent years, costs are down sharply . Deutsche Bank oil-field-services analyst Mike Urban estimates that exploration-and-production companies have cut well costs by 30% to 50% in that time--but that half to two-thirds of that is "cyclical." In other words, part is due to technical advances that may have made shale production permanently cheaper. The cyclical part is because oil-field-services companies have had to slash prices to keep customers--an unsustainable condition. "We're now at the breaking point for the industry," says Mr. Urban of oil-field-services companies. "Every day they go out to work they lose money." A temporary decline in service costs is also aiding more traditional oil production where reinventing the wheel isn't really an option. But the change in some places isn't enough whereas in others it is allowing producers to defy expectations . Russia represents the latter case. Oil output hit a post-Soviet record despite both low prices and economic sanctions. While oil is priced in dollars, it is worth about the same in rubles as when oil prices peaked two years ago. Meanwhile, Russia relies less than most countries on services priced in dollars because of a large domestic oil-field-services industry. While international oil-field-services companies don't break out revenue beyond broad regions, analysts at Raymond James estimated in 2014 that Russia made up just 3% to 5% of revenue at four largest U.S.-based providers. By contrast, Latin America made up nearly one-fifth of revenue recently for Schlumberger, the largest oil-field-services firm. Contrast that with actual production of energy. Russia alone in 2014 produced 40% more oil than all of Latin America and over three times as much natural gas. Despite the fact that Latin America's top producer, Venezuela, has seen its currency's effective black-market exchange rate crash far more than Russia's, it relies heavily on foreign companies. Venezuela's hard-currency shortage is making that difficult. Schlumberger and Halliburton recently gave notice that they are cutting back services there due to late payment. Mr. Urban predicts that Venezuela may soon see significant production declines as a result. Oilmen love to remind everyone that it takes low prices to cure low prices. It does, but the process depends on someone capitulating. To get a better idea of who will oblige the market, watch the true cost of services. Credit: By Spencer Jakab
Subject: Costs; Petroleum production; Oil service industry
Location: Venezuela Russia Latin America North America
Company / organization: Name: Deutsche Bank AG; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 31, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792609390
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792609390?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks, Bonds, Oil Confounded Experts in May; Dollar Rebounded, Yet Crude and Shares Rose as Well
Author: Mackintosh, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2016: n/a.
Abstract:
While the currency has fallen fast against the dollar, it rose against the euro and yen in May and was flat against a basket of China's trading partners, the preferred measure of the People's Bank of China.
Full text: Sell in May, they said. A strong dollar is bad for stocks and oil, they said. Everyone will get scared if China's renminbi weakens again, they said. Avoid dangerous growth stocks, they said. Stick with safe, quality defensive shares with a yield, they said. It didn't turn out that way. As so often, markets confounded conventional wisdom last month. May brought a strong rebound in the dollar, yet shares and the oil price both rose, with the S&P 500 now needing less than 2% to make a new high. The renminbi had its third-worst month since the 1994 devaluation, but investors barely noticed. True, emerging-market shares got whacked in dollar terms, but stripping out the effects of the stronger buck, they only slightly underperformed the rest of the world. Shares in companies offering growth were the place to be, just as last year, while cheaper "value" stocks again underperformed. Meanwhile, the shares into which investors switched earlier this year--companies such as Coca-Cola with a solid dividend and a product that sells even in a weak economy-- struggled. The dash to dullness didn't pay off. The lessons are obvious, but repeated time and again. Fashionable stocks are overpriced stocks because fashions come and go. Equally, when everyone is concerned about something, it is probably already reflected in the price. Fashions apply to the links between assets, too. A strong dollar must be bad for oil and U.S. shares, all else equal, because oil and American stocks are priced in dollars. It is also obvious that a weaker Chinese currency exports deflation to the rest of the world and risks a spiral of decline as Chinese investors switch into dollars to protect their savings. But one of the basic laws of investment is that all else is never equal (one of the many reasons economics isn't a science). If the dollar is strengthening because the U.S. economy is stronger, as the data suggest, then better economic news can offset the threat to profits of a rising greenback and higher interest rates. The same goes for the renminbi. While the currency has fallen fast against the dollar, it rose against the euro and yen in May and was flat against a basket of China's trading partners, the preferred measure of the People's Bank of China. Last August and at the start of this year, the plunging renminbi was a China story; in May, it was about a stronger U.S., not a weaker China. It is harder to construct a coherent account of the renewed weakness of energy shares even as oil prices jumped back above $50 a barrel for the first time since October. None of the stories fit neatly with the behavior of U.S. Treasurys, either. The 10-year yield ended May at 1.85%, only fractionally higher than it started, while the two-year yield had its biggest monthly gain this year as traders bet on a rate increase in June or July. This pattern of short rates rising faster than long rates, known as a flattening yield curve, is usually a sign of concern about the economy. May's flattening is odd. The Atlanta Fed's GDPNow tracking forecast is for robust growth of 2.9% in the second quarter, up from less than 2% at the end of April. There may be some concern that the Fed will make a mistake and hurt the economy by raising rates too fast. But such worries should push shares down and prompt buying of more defensive shares, which didn't happen. At times, markets seem to move just to spite those of us who painstakingly build explanations. Sometimes we should accept that market moves don't fit calendar months especially well, with May featuring sharp turnarounds in several asset classes due to comments by Fed policy makers. Most of all, we should be humble about our ability to forecast what will happen to markets, or why, because the patterns change so often. Write to James Mackintosh at James.Mackintosh@wsj.com Credit: By James Mackintosh
Subject: American dollar; Renminbi; Growth stocks
Location: China United States--US
Company / organization: Name: Peoples Bank of China; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792617264
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792617264?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
UAE Energy Minister Says Oil Market Correcting Itself Upward; Says oil market will fix itself to a price that is fair
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 May 2016: n/a.
Abstract:
"Supply and demand are working and, this is the essence of this policy," said Mr. Mazrouei speaking to reporters in Vienna ahead of the meeting of the Organization of the Petroleum Exporting Countries on Thursday.
Full text: VIENNA--The oil market has been correcting itself upward this year in line with OPEC's policy, said United Arab Emirates' energy minister, Suhail bin Mohammed al-Mazrouei. "Supply and demand are working and, this is the essence of this policy," said Mr. Mazrouei speaking to reporters in Vienna ahead of the meeting of the Organization of the Petroleum Exporting Countries on Thursday. At its meeting on Thursday, OPEC isn't likely to take any coordinated action on crude-oil output, observers said. At recent meetings OPEC, has decided against cutting output to stabilize prices. Mr. Mazrouei said that the oil market will fix itself to a price that is fair, but that needs time. "From the beginning of the year until now, the market has been correcting itself upward," the minister said. "This is the year of correction." Oil prices have nearly doubled since hitting 13-year lows over the winter, as a spate of production disruptions and a continued fall in U.S. output have taken barrels off an oversupplied market. That takes pressure off OPEC members as they meet in Vienna, following months of fervent debate over production levels within the oil cartel. The meeting is also expected to include jostling over who will become the next head of OPEC. -- Benoit Faucon contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Supply & demand; Price increases
Location: United States--US United Arab Emirates
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: May 31, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792617350
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792617350?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Tilt Lower; Focus Stays on U.S. Crude Data and OPEC Meeting; August Brent crude fell $0.24 to $49.65 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 June 2016: n/a.
Abstract:
Wildfires in Canada's oil-sand hub and the ongoing political strife in Nigeria buoyed prices to a nearly eight-month high, but as Canada is set to resume normal oil operations later this week, analysts are wary how long these bullish factors can last. [...]members of the Organization of the Petroleum Exporting Countries are expected to stand pat on their "no-cut" tactic when they meet this week in Vienna.
Full text: Oil prices slid in early Asian trade Wednesday as investors adopt a cautious stance ahead of the weekly U.S. crude inventory data and the biannual OPEC meeting, both scheduled for Thursday. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $48.88 a barrel at 0254 GMT, down $0.22 in the Globex electronic session. August Brent crude on London's ICE Futures exchange fell $0.24 to $49.65 a barrel. Overnight, oil prices brushed against the $50 mark briefly before retreating, repeating a pattern from last week amid bearish suggestions from analysts that the strong rally may have been overextended on tenuous factors such as unplanned supply disruptions. Wildfires in Canada's oil-sand hub and the ongoing political strife in Nigeria buoyed prices to a nearly eight-month high, but as Canada is set to resume normal oil operations later this week, analysts are wary how long these bullish factors can last. Moreover, members of the Organization of the Petroleum Exporting Countries are expected to stand pat on their "no-cut" tactic when they meet this week in Vienna. The view was reinforced when the United Arabs Emirates energy chief Suhail bin Mohammed al-Mazrouei on Tuesday said global oil markets are self-correcting in line with cartel policy. "The comments suggest the cartel have little desire to alter the current 'no limit' production levels," said Stuart Ive, a client manager at OM Financial. Several top energy watchdogs predict global oil markets are becoming leaner due to steady production declines in non-OPEC countries. However, as competition for market shares within the cartel continues to heat up, OPEC production might climb, exacerbating the overall supply. In the cartel's own monthly report, OPEC crude oil production rose 188,000 barrels a day in April to average 32.44 million barrels, according to secondary sources. The Wall Street Journal also reported earlier this week that several OPEC envoys said a production cap has not been seen on the meeting agenda. However, the fact remains that supply side is facing headwinds due to slashed budgets. In March, U.S. domestic production fell 0.1% to 9.1 million barrels, a 5.4% on-year decrease. China's domestic crude production also fell 5.6% in April. The Energy Information Administration will release the weekly U.S. oil data Thursday. An analyst survey by Platts estimates a 3.1-million barrel decrease in U.S. crude stocks for the week ended May 27. But analysts worry as prices trend higher, U.S. shale producers, known for their efficiency, will crank up their taps quickly to capture the higher margin, pushing prices back into a rout. But others believe such speculation is overly optimistic. "The price needed to reverse the decline in U.S. production is likely to be higher than currently anticipated...the ramp up in supply will be slower, and the supply gains will be more modest than in the boom years," said a report published by Oxford Institute for Energy Studies. "The switch-on-switch-off comparison simply does not hold," the report noted. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 132 points to $1.6002 a gallon, while July diesel traded at $1.4942, 29 points lower. ICE gasoil for June changed hands at $445.00 a metric ton, down $8.50 from Tuesday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Cartels; Petroleum production
Location: United States--US Canada
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792645379
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792645379?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Rebound on OPEC Hope; Cartel's talk of revisiting a cap on production cancels out selloff from healthy supplies
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 June 2016: n/a.
Abstract:
Recent wildfires in Canada had shut down nearly 1 million barrels of oil production, or about 40% of Canada's daily crude output, but that factor doesn't appear to have seriously reduced the oversupply in the U.S. market, said Scott Shelton, broker at ICAP PLC. Suncor Energy, that country's largest crude-oil producer, said it expects to restart production by the end of the week.
Full text: Oil prices rebounded from losses after delegates from the world's largest oil exporters renewed hope that they may revisit a cap on production. Saudi Arabia is now considering backing a ceiling on production from the Organization of the Petroleum Exporting Countries when the group meets Thursday in Vienna, delegates said. That might remove what analysts consider one of the biggest threats to oil's recent rally. Saudi Arabia is likely one of only a few major oil producers in the world that can keep ramping up the record production that has caused a world-wide oil glut. The move would be a surprise to many and an about-face from April when the kingdom backed out of a preliminary deal between OPEC leaders and Russia to cap production. Expectations have been so low for Thursday's meeting that even the slightest bit of hope, though largely remote and speculative, is enough to halt a four-day selloff of U.S. oil, brokers said. "I don't know why they're being optimistic," said Donald Morton, senior vice president at Herbert J. Sims & Co., who runs an energy-trading desk. "But if you cap OPEC production at the same time you're capping domestic production here at home, then you're racing into [a] shortage." U.S. crude oil for July delivery settled down 9 cents, or 0.2%, at $49.01 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, lost 17 cents, or 0.3%, to $49.72 a barrel on ICE Futures Europe. Both markets had traded in losing territory for much of the day, with U.S. oil bottoming out at a one-week intraday low of $47.75 a barrel. With the late-afternoon headlines out of Vienna, oil flipped into positive territory after settlement, with U.S. oil recently trading up 6 cents, or 0.1%, at $49.16 a barrel. The oil market has clung to near the $50 market all week. A round number such as that is often a popular point for automatic buy and sell orders, as well as options strike prices, leading many traders to pause and reassess. Volatility in the oil futures market recently dropped to its lowest point since 2014, and some expect prices to hover in this area for several sessions before making a drastic move one way or the other. Many are still warning that move could be lower. U.S. oil settled up 87% from its 13-year low settlement in February, its sharpest rally in seven years even though many of the improvements in the oversupplied market may be temporary. Recent wildfires in Canada had shut down nearly 1 million barrels of oil production, or about 40% of Canada's daily crude output, but that factor doesn't appear to have seriously reduced the oversupply in the U.S. market, said Scott Shelton, broker at ICAP PLC. Suncor Energy, that country's largest crude-oil producer, said it expects to restart production by the end of the week. Stockpiles at Cushing, Okla., fell by about 650,000 barrels from May 20 to May 24, but only 31,000 barrels from May 24 to 27, data provider Genscape Inc. said on Tuesday, according to a person who had reviewed the report. The U.S. Energy Information Administration has scheduled the release of its own weekly update on U.S. stockpiles for Thursday at 11 a.m. EDT. Analysts surveyed by The Wall Street Journal expect a 2.8-million barrel decrease in U.S. crude stocks for the week ended May 27. But that volume isn't much outside normal for this time of year, when demand from summer driving season often leads crude inventories to shrink. "The market seems to have found the supply pretty easily to offset Canada," Mr. Shelton said. "And that's making people wonder what the next catalyst is for upside." Analysts are also expecting decreases in gasoline and distillates stocks of 600,000 barrels each, and both of those commodities rallied into gains before crude. Gasoline futures settled up 0.19 cent, or 0.1%, at $1.6153 a gallon. Diesel futures gained 0.18 cent, or 0.1%, to $1.4989 a gallon. The American Petroleum Institute, an industry group, said late Wednesday that its own data for that week showed a 2.4-million-barrel increase in crude supplies, a 1.5-million-barrel decrease in gasoline stocks and a 1.2-million-barrel decrease in distillate inventories, according to market participants. While the market is improving, there are still several factors likely to prevent rapid price rallies in the coming months, analysts at Credit Suisse Group AG said in a note published on Tuesday but released to the press on Wednesday. The biggest risks include Saudi Arabia raising production to take customers from their rivals, a strengthening dollar, a U.K. vote to leave the European Union and Republican nominee Donald Trump's presidential bid, they said. "Fundamentals are clearly improving, but anxiety about the macroeconomic environment as well as very large inventory surpluses remain strong headwinds," they said. Corrections & Amplifications: Gasoline futures on Wednesday settled up 0.19 cent, or 0.1%, at $1.6153 a gallon. An earlier version of this article incorrectly stated they had settled up 9.3 cents, or 4.1%, at $2.381 a gallon. (June 2, 2016) Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Supply & demand; Petroleum production; Price increases
Location: United States--US Saudi Arabia
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792752931
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792752931?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Airbus Sees Oil Stable at Around $60 Per Barrel for Several Years; A bounce back in fuel costs is welcome for plane makers that have invested billions in designing more fuel-efficient planes
Author: Wall, Robert
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 June 2016: n/a.
Abstract:
ATR sees a similar outcome, as does Canadian plane maker Bombardier Inc. Airbus Chief Operating Officer Tom Williams said on Monday the damping effect on sales from low oil prices is making the European plane maker more reluctant to push for a further boost in production of A320 single-aisle planes beyond its announced plans to raise output to 60 of the planes a month from the mid-40s today.
Full text: DUBLIN--Plane makers are hoping for a period of relative stability in oil markets with prices at around $50 to $60 per barrel that would deliver a healthy mix of airline profitability and demand for more efficient planes. Two years ago, oil was trading above $100 per barrel before a supply glut caused prices to tumble to below $30 per barrel early this year. Fuel costs have gradually inched up recently with Brent Crude trading at $49.25 per barrel on Wednesday. Fuel is one of the highest costs for airlines. Plummeting prices have helped lift airline profits, but they have also removed the incentive to replace older planes with more efficient models, which cost more. "What I am looking forward to is more stability in the oil price. The volatility is never good" and has kept some airlines from making strategic fleet decisions, said Patrick de Castelbajac, chief executive of Franco-Italian turboprop maker ATR. After years of record order intake, plane makers this year face more subdued demand. Airbus Group SE expects order intake to be only roughly on par with its planned 650 plane deliveries . ATR sees a similar outcome, as does Canadian plane maker Bombardier Inc. Airbus Chief Operating Officer Tom Williams said on Monday the damping effect on sales from low oil prices is making the European plane maker more reluctant to push for a further boost in production of A320 single-aisle planes beyond its announced plans to raise output to 60 of the planes a month from the mid-40s today. Low oil prices can also make planes that were parked for their inefficiency, economically viable again, causing airlines to reintroduce them. Such capacity additions can spur sales growth, but typically have undermined long-term airline profitability as an oversupply of seats forces down ticket prices. John Leahy, Airbus chief operating officer for customers, said that hasn't happened, though it likely would have if oil prices had remained at their lows seen at the beginning of the year. Mr. Leahy said, "$50 to $60 per barrel tends to work for everybody." The world's second largest plane maker behind Boeing Co. expects prices to remain relatively stable at around $60 per barrel for a few years, he said. The Centre for Aviation, a Sydney-based consultant, this week said collective airline operating margins should reach 8.2%, the highest in decades. Fuel expenses should fall to 19% of sales, down from 30% in 2014 and 25% last year. A bounce back in fuel costs is welcome for plane makers that have invested billions in designing more fuel-efficient planes such as the Boeing 787 Dreamliner or the rival Airbus A350. Higher oil costs makes their fuel efficiency more attractive. Fred Cromer, president of Bombardier Commercial Aircraft said low oil prices can cause carriers to defer purchase decisions, though he said deals eventually get done as airlines focus on costs over the longer term. "Stable prices are better," he said. Bombardier this year is delivering the first of its CSeries narrow body planes promising double-digit efficiency gains. Write to Robert Wall at robert.wall@wsj.com Credit: By Robert Wall
Subject: Airlines; Aerospace industry; Costs; Energy economics; Profitability; Chief operating officers; Energy efficiency
Company / organization: Name: Boeing Co; NAICS: 336411, 336413, 336414; Name: Bombardier Inc; NAICS: 336411, 336510, 336999, 551112
Product name: Airbus A350, Boeing 787
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 1, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792807337
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792807337?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Crude-Oil Supplies Expected to Show Decrease in DOE Data
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 June 2016: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Wednesday that its own data for that week showed a 2.4-million-barrel increase in crude supplies, a 1.5-million-barrel decrease in gasoline stocks and a 1.2-million-barrel decrease in distillate inventories, according to market participants.
Full text: U.S. crude-oil stocks are expected to show a decrease, in data due to be published on Thursday by the Department of Energy, according to a survey of analysts by The Wall Street Journal. Estimates from 11 analysts surveyed showed U.S. oil inventories are projected to have decreased by 2.6 million barrels, on average, in the week ended May 27. Ten analysts expect stockpiles to fall while one expects no change. Forecasts range from a decrease of 4.6 million barrels to no change. The closely watched survey from the Energy Information Administration is due to be published at 11 a.m. EST on Thursday, delayed a day because of Monday's Memorial Day holiday. Gasoline stockpiles are expected to fall by 600,000 barrels, according to analysts. Seven analysts expect a decline and four expect a rise. Estimates ranged from a fall of 3 million barrels to a rise 1.8 million barrels. Stocks of distillates, which include heating oil and diesel, are expected to fall by 600,000 barrels. Eight analysts expect a decline and three expect a rise. Forecasts ranged from a decline of 3 million barrels to an increase of 2.5 million barrels. Refinery use is seen rising 0.8 percentage point to 90.5% of capacity, based on EIA data. Ten analysts expect a rise and one did not report expectations. Forecasts ranged from an increase of 0.3 point to an increase of 2 points. The American Petroleum Institute, an industry group, said late Wednesday that its own data for that week showed a 2.4-million-barrel increase in crude supplies, a 1.5-million-barrel decrease in gasoline stocks and a 1.2-million-barrel decrease in distillate inventories, according to market participants. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Inventory; Price increases; Supply & demand
Location: United States--US
Company / organization: Name: American Petroleum Institute; NAICS: 813910, 541820; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 1, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792831413
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792831413?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Stagnant on Possible Talks of an OPEC Output Ceiling; August Brent crude rose $0.05 to $49.77 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2016: n/a.
Abstract:
Iran will want to export as much as it can as it reasserts itself in the international markets, while Iraq also has a desperate need for oil revenues to pay its military and contractors. [...]a rebound in prices in recent months, spurred by declining production outside of the OPEC has undercut any impetus for a production cut.
Full text: Crude oil prices largely stayed put in early Asian trade Thursday as investors and traders wait for the outcome of the Organization Petroleum Exporting Countries meeting later today, where discussion on a collective output ceiling could be revived. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $48.93 a barrel at 0204 GMT, down $0.08 in the Globex electronic session. August Brent crude on London's ICE Futures exchange rose $0.05 to $49.77 a barrel. Ahead of the closely-monitored meeting in Vienna which is scheduled to begin at 0800 GMT, several delegates said the group is mulling to discuss a production ceiling, an idea that is rumored to have conditional support of Saudi Arabia. However, Iran's rejection of the proposal will likely derail the plan. Talks about a ceiling represent a return to OPEC's traditional way of doing business. In recent months, failed discussions have centered on limits on individual countries' output, whereas a ceiling would place a cap on the whole group's output. Until December, OPEC had a production ceiling of 30 million barrels a day--a limit it routinely breached. Markets looked to that ceiling as a kind of guarantee. After OPEC scrapped its production ceiling in December, oil prices descended to 13-year lows within weeks. Most analysts said the meeting will largely be a formality with the cartel sticking to the "no-cut" strategy as players are mainly driven by competition for market shares. "We see no reason as to why OPEC members...would now choose to reverse policy," said BMI Research. The firm points out Saudi Arabia will remain opposed to reducing its output as this would facilitate Iran's return to market. Iran will want to export as much as it can as it reasserts itself in the international markets, while Iraq also has a desperate need for oil revenues to pay its military and contractors. Moreover, a rebound in prices in recent months, spurred by declining production outside of the OPEC has undercut any impetus for a production cut. "We think that the production freeze agreement last formally rejected with Brent trading at $40-45 will be rejected again Thursday," said Tim Evans, a Citi Futures analyst, who expects OPEC production to hit 33 million barrel a day later this year. In April, based on the cartel's own monthly report, OPEC crude oil production rose 188,000 barrels a day to average 32.44 million barrels, according to secondary sources. Next report will be released on June 13. Imminent resumption of Canadian oil production could add further pressure on prices, but ongoing supply outages in Nigeria and Libya could weigh on growth in global supply for now. Market watchers will also eye the weekly U.S. crude data to be released later today. An analysts survey by The Wall Street Journal estimates a 2.8-million barrel drop in domestic stockpiles, while industry group American Petroleum Institute is expecting a 2.4-million barrel expansion. There are still several factors likely to prevent rapid price rallies in the coming months, said a Credit Suisse analysts report. The biggest risks the bank sees include Saudi Arabia raising production to take customers from their rivals, a strengthening dollar, a U.K. vote to leave the European Union and Republican nominee Donald Trump's presidential bid. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--rose 95 points to $1.6248 a gallon, while July diesel traded at $1.5046, 57 points higher. ICE gasoil for June changed hands at $446.50 a metric ton, up $2.75 from Wednesday's settlement. Benoit Faucon and Summer Said contributed to this story. Credit: By Jenny Hsu
Subject: Crude oil prices; Crude oil; Supply & demand; Futures; Petroleum production
Location: Iran Saudi Arabia
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1792964586
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1792964586?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Oil Prices Settle Above $50 a Barrel; U.S. stockpile data demonstrates impact of a year of low prices and spending cutbacks by oil companies
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2016: n/a.
Abstract:
Prices fell early in the session as the Organization of the Petroleum Exporting Countries opted not to freeze production at its meeting in Vienna, but the market recovered after the U.S. data was released midmorning.
Full text: NEW YORK--Brent crude, the global oil benchmark, settled above $50 a barrel Thursday for the first time since November on continued declines in U.S. crude-oil inventories and production. Prices fell early in the session as the Organization of the Petroleum Exporting Countries opted not to freeze production at its meeting in Vienna, but the market recovered after the U.S. data was released midmorning. The U.S. data demonstrated how more than a year of low prices and spending cutbacks by oil companies are leading to shrinking supplies, helping reduce the oversupply of crude oil without intervention from OPEC. Brent crude settled up 32 cents, or 0.6%, at $50.04 a barrel on ICE Futures Europe, the highest settlement since Nov. 3. U.S. crude oil for July delivery settled up 16 cents, or 0.3%, at $49.17 a barrel on the New York Mercantile Exchange. U.S. crude inventories fell by 1.4 million barrels in the week ended May 27 as refiners ran at a slightly higher rate, the Energy Information Administration said Thursday. "The demand numbers are strong" for gasoline and other fuels, said Donald Morton, senior vice president at Herbert J. Sims & Co., who runs an energy-trading desk. U.S. crude inventories have fallen in recent weeks but remain near the highest level in more than 80 years, a sign of the global glut of crude that has weighed on oil prices since mid-2014. Domestic crude production also fell to the lowest weekly level since September 2014, the agency said, indicating that spending cuts by oil companies are taking their toll on output. Also on Thursday, OPEC didn't agree to implement a production ceiling at its meeting in Vienna. OPEC's decision not to cut production despite a global oversupply of crude was a key factor behind falling oil prices in late 2014. The group's talk of freezing production in recent months helped buoy oil prices from 13-year lows reached earlier this year. But Iran has been unwilling to freeze production as it plans to continue increasing output now that international sanctions have been lifted. Production outages in Canada, Nigeria and elsewhere have taken barrels off the market in recent weeks, boosting prices and removing some incentive for OPEC members to cut back. "The worst is over for oil," said Mohammed al-Sada, the energy minister for Qatar, at a news conference in Vienna. U.S. prices have climbed more than 85% since falling in February to the lowest level since 2003. "Despite the lack of an OPEC-led production freeze, the balance of the global oil market has changed in the last few months," said Bob Minter, investment strategist at Aberdeen Asset Management, which manages $420.9 billion, in a statement. "All member countries are still highly motivated to maximize production for political and economic reasons." Mohammed Barkindo of Nigeria, who was named as OPEC's new secretary-general, said the group may come up with an output ceiling in the future but is comfortable without one for now. Gasoline futures settled up 1.93 cents, or 1.2%, at $1.6346 a gallon. Diesel futures rose 0.99 cent, or 0.7%, at $1.5088 a gallon. Benoit Faucon, Summer Said and Georgi Kantchev contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Crude oil prices; Crude oil; Inventory
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793043087
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793043087?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Global Finance: Oil-Production Cap Considered Ahead of Meeting
Author: Faucon, Benoit; Said, Summer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 June 2016: C.3.
Abstract:
In recent months, failed discussions have centered on limits on individual countries' output, whereas a ceiling would place a cap on the whole group's output. [...]December, OPEC had a production ceiling of 30 million barrels a day -- a limit it routinely breached.
Full text: VIENNA -- OPEC members are reviving the idea of a ceiling on production in closed-door talks ahead of their official Thursday meeting. Saudi Arabia is considering backing a ceiling on the group's collective production, according to Organization of the Petroleum Exporting Countries delegates here. A willingness by Saudi Arabia, the group's biggest exporter, to support such a limit would be a subtle but significant shift for a country that has been a major proponent of all-out production amid a supply glut that led to a price collapse. But Iran later rejected the idea, potentially spoiling an emerging consensus. Talks about a ceiling represent a return to OPEC's traditional way of doing business. In recent months, failed discussions have centered on limits on individual countries' output, whereas a ceiling would place a cap on the whole group's output. Until December, OPEC had a production ceiling of 30 million barrels a day -- a limit it routinely breached. Markets looked to that ceiling as a kind of guarantee. After OPEC scrapped its production ceiling in December, oil prices descended to 13-year lows within weeks. In the run-up to Thursday's meeting, OPEC delegates had played down the chances of any coordinated agreement on output. Members remain deeply divided about what kinds of limits, if any, should be agreed upon, and the talks about a ceiling could come to nothing. All OPEC decisions must be unanimous. Nigeria, Qatar, Algeria and Venezuela are supportive of a production ceiling, according to a person involved in the talks. Qatar said such a ceiling would be akin to taking antibiotics to get over an ailment, the person said. Algeria believes oil prices will fall if OPEC doesn't act in coordination on Thursday. Saudi Arabia is willing to go along if there is a consensus but wants the ceiling increased to 32 million to 32.5 million barrels a day, to recognize the group's growing share of the market, the person said. At least one powerful member, the United Arab Emirates, is against reintroducing production ceilings unless Iran agrees to abide by them, the person said. Upon arriving in Vienna late Wednesday, Iran's oil minister was in no mood for compromise, saying his country won't stop increasing its output until it reaches more than four million barrels a day -- part of its plan to recover economically now that Western sanctions on its nuclear program have been lifted. Credit: By Benoit Faucon and Summer Said
Subject: Business forecasts; Supply & demand; Crude oil prices; Petroleum production
Company: Organization of Petroleum Exporting Countries--OPEC
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: Jun 2, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793066322
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793066322?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
OPEC Fails to Reach Agreement on Oil Production Ceiling; Recent rise in oil prices puts little pressure on producer group to take dramatic action
Author: Said, Summer; Faucon, Benoit; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2016: n/a.
Abstract:
Oil prices had climbed on Wednesday as some OPEC members floated the idea of reintroducing collective production limits, which would serve as a signal to the market that the group could be disciplined. [...]last December, OPEC had a production ceiling of 30 million barrels a day, a mark it routinely exceeded by more than two million barrels a day.
Full text: VIENNA--OPEC broke off its meeting on Thursday without reaching an agreement on oil production , continuing a hands-off policy that members say could set up a new test for the group's relevance: supply shortages. With oil prices up about 80% over the past few months from 13-year lows hit in the winter, there was little pressure on the Organization of the Petroleum Exporting Countries to take significant action to curb the world's huge oversupply of crude, national energy ministers said after the meeting. Oil prices rose 0.3% on Thursday after the meeting, as investors looked past the OPEC decision and traded up on new data showing a drop in U.S. oil production. Oil prices had climbed on Wednesday as some OPEC members floated the idea of reintroducing collective production limits, which would serve as a signal to the market that the group could be disciplined. Until last December, OPEC had a production ceiling of 30 million barrels a day, a mark it routinely exceeded by more than two million barrels a day. Members decided against a return to such a cap, saying repeatedly that the market is rebalancing, and citing rising demand in the U.S., India and other major consumers as playing a major role in their decision. They also pointed to falling production in the U.S., where output from shale formations has declined under the weight of collapsed prices. But geopolitical tensions also helped scotch the deal, with Iran taking a firm stand late Wednesday against any move that would limit its own production as it aims for an economic comeback following the end of Western sanctions in January . Now, amid criticism that the organization is unable to take coordinated action and is increasingly irrelevant , some ministers say their main role is simply providing a steady supply of oil. They flagged the potential for an oil shortage caused by historic investment cuts in the global energy sector, a gap the group that controls about 40% of the world's crude said it could be called on to fill. "Our concern is for the long-term stability of the market, plentiful supply and meeting this rising demand," Saudi Arabia's energy minister, Khalid al-Falih, said before his first OPEC meeting. "We don't want oil shocks in any way that will contribute to the slowdown of the [global economy.]" Talk of filling supply shortages is a reversal of fortune for OPEC. The group no longer pulls back production when prices fall in a bid to balance the market. Its new role, ministers said, is shaping up as a massive market player that can pump more when production elsewhere falls and prices begin shooting up. Consultancy Rystad Energy estimates that, for the first time since the 1980s, the oil industry will experience two consecutive years of decreased global capital investment in crude oil. Last year, investment fell by $126 billion, or 25%, among all producers and is forecast to decline by one-fifth more this year, according to Rystad. Oil companies aren't expected to jump back into investments right away as oil prices gradually rise this year and into next, said Rainier Seele, the chief executive of OMV AG, Austria's partly state-owned energy company, which produces 300,000 barrels of oil equivalent a day. Barclays estimates that production outside of OPEC will fall by 900,000 barrels a day this year and by an additional 400,000 barrels a day in 2017. That could lead to a supply shock between 2018 and 2020, the bank estimates. Related * Oil Prices Turn Positive * Heard on the Street: No Way to Run a Cartel * Gabon: OPEC's Newest Member * OPEC's Rituals Changing as a New Guard Takes Over For OPEC, that could mean it will be back in business as a force on the market, says Helima Croft, head of commodities strategy at RBC Capital Markets. "At some point there's bound to be a reckoning," Ms. Croft said on the sidelines of the OPEC meeting. "We are still working off projects that were greenlit years ago. But investments since then have dried up." The new role for OPEC comes with a host of risks. There are looming questions over OPEC's technical capability to significantly raise production. This year, OPEC's spare pumping capacity--the amount it can bring online within 30 days and sustain for at least 90--will be at its lowest level since 2008, the U.S. Energy Information Administration estimates. It said OPEC spare capacity will decline more than 22% in the current quarter from the previous quarter. A supply shortage that OPEC can't alleviate would lead to a sharp rise in prices, leading voices in OPEC say. Without investments, "we will go back to the level of $147 a barrel," Nigeria's oil minister, Emmanuel Ibe Kachikwu, said in an interview. "If no new reserves are being built, this is where we are going." That would in turn negatively affect demand for crude, analysts say. "If oil prices go back to $100, then demand goes down the drain," said Abhishek Deshpande, oil analyst at French bank Natixis. "OPEC should be worried." Higher prices could lead to a new exuberance for American shale-oil producers, which tapped new reserves in fields from Texas to North Dakota when prices were around $100 a barrel from 2011 to 2014. Mr. Falih, the Saudi energy minister, said $100 oil wasn't a price the organization wants to see again. "I can tell you that we found out that $100 to $110 was too high," Mr. Falih said in an interview after the meeting. "It brought in too much investment, too much supply...and it created the imbalance we have seen." A host of supply outages from Canada to Nigeria have taken more than three million barrels a day of oil offline--crude that is expected to come back at some point and help provide a cushion against supply crises. Iran is also ramping up its production after Western sanctions over its nuclear program were lifted . Oil minister Bijan Zanganeh said the country's output was 3.8 million barrels a day but still short of its goal of more than four million. OPEC has little choice but to pump as much as possible, as geopolitical tensions between Saudi Arabia and Iran have made agreement on production difficult. Neither will go along with production limits that don't affect the other. The cartel also agreed to allow Gabon to re-enter OPEC two decades after the West African nation left. With 240,000 barrels a day of production, Gabon will be OPEC's smallest producer and 14th member. Lynn Cook in Houston and Miriam Malek in Vienna contributed to this article. Write to Summer Said at summer.said@wsj.com , Benoit Faucon at benoit.faucon@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Summer Said, Benoit Faucon and Georgi Kantchev
Subject: Crude oil prices; Petroleum production; Energy industry; Crude oil
Location: United States--US
People: Kachikwu, Emmanuel Ibe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793148143
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793148143?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Hilsenrath's Take: Investors Are Taking Signs of Policy Divergence In Stride; For Fed officials, the currency's stability, recent stock market gains and an oil price rebound are signals that they can proceed with a rate move without too much fear of a repeat of the kind of market turbulence that so unsettled them earlier in the year.
Author: Hilsenrath, Jon
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2016: n/a.
Abstract:
For Fed officials, the currency's stability, recent stock market gains and an oil price rebound are signals that they can proceed with a rate move without too much fear of a repeat of the kind of market turbulence that so unsettled them earlier in the year.
Full text: The central banking story of June is policy divergence. The European Central Bank is widely expected to keep policy steady at its policy meeting Thursday and raise its inflation forecasts for the first time in a year. Later this month, the Federal Reserve appears to be moving toward either raising short-term rates or signaling more strongly than before that a rate increase is coming later this summer. Meantime, the Bank of Japan is under pressure from Prime Minister Shinzo Abe's government to increase its bond purchase programs . Against that backdrop, you might expect to see turbulence in foreign exchange markets, but that is not the case. The dollar is up 3% against the euro and yen since early May, but remains well off its January highs. After the recent gains, The Wall Street Journal's index of the dollar's value against a broad basket of currencies is down 3% from the beginning of the year. For Fed officials, the currency's stability, recent stock market gains and an oil price rebound are signals that they can proceed with a rate move without too much fear of a repeat of the kind of market turbulence that so unsettled them earlier in the year. Credit: By Jon Hilsenrath
Subject: Central banks; Foreign exchange markets
People: Abe, Shinzo
Company / organization: Name: Bank of Japan; NAICS: 521110; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 2, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793170250
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793170250?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Airlines Set for Record Profit as Oil Cuts Costs; The International Air Transport Association forecasts a record year, with North America leading the way
Author: Wall, Robert
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2016: n/a.
Abstract:
DUBLIN--The International Air Transport Association on Thursday raised its profit forecast for the global air transport industry to a record of $39.4 billion for 2016 even as traffic growth is slowing and terrorist attacks hurt demand.
Full text: DUBLIN--Airlines are poised to post higher-than-expected profits this year, but the turning point investors have been dreading may be near as traffic growth slows and oil prices inch up. The International Air Transport Association on Thursday raised its profit forecast for the global air transport industry to a record of $39.4 billion for 2016 even as traffic growth is slowing and terrorist attacks hurt demand. Airlines made $35.3 billion last year and IATA, in December, projected $36.3 billion for this year. Carriers in North America are poised to lead the way in 2016 with $22.9 billion in net profit, IATA said. The outlook for European profit has weakened as terrorist attacks in Paris in November and Brussels in March weigh on demand. European carriers now are expected to collectively post $7.5 billion in profit, $1 billion less than anticipated six months ago. Profit growth is underpinned by the sharp drop in oil prices since mid-2014. IATA said fuel should be about 19.7% of airline costs this year, down from 33.1% in 2012-2013 and about 27% last year. "We are probably nearing the peak of the positive stimulus from low oil prices," said Tony Tyler, the airline trade group's chief executive. Airline consultant the Centre for Aviation said this week that operating margins for the world's airlines would peak in 2016 at 8.2%, up from 7.1% in 2015. Margins are expected to retreat next year to around 7.5% as airlines introduce more planes adding downward pressure on ticket prices. After five years of profit increases the pace of growth is slowing, said Brian Pearce, chief economist at IATA. "The main worry we have is the fragility of the world economy." The outlook for European profit has weakened as terrorist attacks in Paris in November and Brussels in March have weighed on demand. European carriers now are expected to collectively post $7.5 billion in profit in 2016, $1 billion less than anticipated six months ago. "Profitability is not evenly spread," Mr. Tyler said. For Latin America, where counties such as Brazil are struggling with economic problems, IATA cut its profit outlook for the year to $100 million from $400 million. Carriers in Africa re expected to lose $500 million as a fall in commodity prices damps local economies. Airline sales this year should reach $709 billion and deliver a 5.6% net profit margin, the trade group said. Mr. Tyler said 2016 would be only the second year airlines return their cost of capital. "We are beginning to be a normal business," he said at the organization's annual meeting. At the event attended by more than 200 airline executives, airline chiefs argued that restructuring measures and a focus on shareholders would help sustain profits even as the period of low oil prices ends. Brent crude, which was trading below $30 per barrel at the start of the year, is now at $49.68. An increased focused on returns exceeding capital costs has instilled greater discipline on airlines, said Stephen Kavanagh, chief executive of Aer Lingus, the host airline for the event. Andrés Conesa chief executive of Aeroméxico said consolidation and joint venture partnerships that allow airlines to coordinate fares and schedules have made the industry far more resilient. "That will give you a stronger possibility of keeping profits even if oil prices turn around." Still, IATA's latest figures also show areas of concern. Traffic this year is expected to increase less than previously predicted. Traffic measured by revenue passenger miles is expected to expand 6.2%, down from a forecast of 6.9% growth made in December and last year's 7.4% expansion. Airline capacity is expected to increase 6.8%, outpacing traffic growth, IATA said. Airline investors are concerned that future profitability is at risk from a surfeit of seats, forcing airlines to cut ticket prices to fill planes. Passenger yields, a measure of ticket prices, are set to fall 7% and those in the struggling cargo market could slump 8%, Mr. Tyler said. Write to Robert Wall at robert.wall@wsj.com Credit: By Robert Wall
Subject: Airlines; Airline industry; Profits; Profitability
Location: North America
People: Tyler, Tony
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793170440
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793170440?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Government Bonds Strengthen as ECB and OPEC Stand Pat; No deal to curb oil output, and European Central Bank leaves interest rates unchanged
Author: Goldfarb, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2016: n/a.
Abstract:
Even if the Fed does raise rates soon, many analysts think the move likely won't lead to a big increase in bond yields because of the large demand for Treasurys from overseas investors, who are struggling to obtain income at a time when ultraloose monetary policy from central banks in Japan and the eurozone have sent yields on a record amount of government debt into negative territory.
Full text: U.S. government bonds strengthened Thursday as investors took a cautious view of the economy after the European Central Bank left interest rates unchanged and oil producers failed to reach a deal to curb output. After the ECB meeting, bank President Mario Draghi said little that surprised investors but did leave the door open for more monetary stimulus as the eurozone continues its slow recovery. Government bond prices in the eurozone ticked higher during the ECB news conference, providing a lift to U.S. Treasurys. Bonds also benefited from a temporary flight from stocks and commodities as an Organization of the Petroleum Exporting Countries meeting ended without an agreement to set a production ceiling, though oil and stock prices later recovered as new data showed a drop in U.S. crude supplies. Before Mr. Draghi spoke, "there was a sense that he was going to come out a little more upbeat regarding the prospects of the eurozone," said Anthony Karydakis, chief economic strategist at Miller Tabak. "The interpretation was that his guarded tone left the door open to more action later in the year." Also providing a reason to buy bonds was a new report on New York City-area business activity that showed a sharp slowdown in May, Mr. Karydakis said. The yield on the benchmark 10-year Treasury note settled at 1.811%, compared with 1.844% Wednesday. Yields fall when bond prices rise. Despite the activity overseas, investors remained largely focused on the state of the U.S. economy, with a major data point coming Friday when the Labor Department will release its nonfarm employment report for May. On Thursday, payroll processor Automatic Data Processing Inc. and forecasting firm Moody's Analytics said private payrolls rose by 173,000 last month, roughly in line with expectations. Treasury yields have climbed in recent weeks as a number of Fed officials have warned investors that a rate increase as soon as June isn't off the table. Last Friday, Federal Reserve Chairwoman Janet Yellen reinforced that message, saying a rate increase "in the coming months" would be appropriate if the economy and labor market continue to strengthen. Fed-funds futures, used by investors to place bets on U.S. central-bank policies, showed Thursday the chances of the Fed raising interest rates were 23% at its June 14-15 meeting and 61% by its July 26-27 meeting, according to CME Group. One reason why investors are skeptical that the Fed will raise interest rates at its June meeting is that a referendum in the U.K. on remaining in the European Union will take place just one week later, creating uncertainty about the European economy and global financial markets. Even if the Fed does raise rates soon, many analysts think the move likely won't lead to a big increase in bond yields because of the large demand for Treasurys from overseas investors, who are struggling to obtain income at a time when ultraloose monetary policy from central banks in Japan and the eurozone have sent yields on a record amount of government debt into negative territory. Write to Sam Goldfarb at sam.goldfarb@wsj.com Credit: By Sam Goldfarb
Subject: Interest rates; Central banks; Investments; Data processing; Eurozone; Treasuries
Location: United States--US
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: European Union; NAICS: 926110, 928120; Name: CME Group; NAICS: 523210; Name: Automatic Data Processing Inc; NAICS: 541513, 511210, 518210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793319585
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793319585?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Supplies Decline Less Than Expected
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2016: n/a.
Abstract:
U.S. crude stockpiles declined less than expected in the week ended May 27, while gasoline inventories fell more than forecasts, according to data released Thursday by the Energy Information Administration.
Full text: U.S. crude stockpiles declined less than expected in the week ended May 27, while gasoline inventories fell more than forecasts, according to data released Thursday by the Energy Information Administration. Crude-oil stockpiles fell by 1.4 million barrels to 535.7 million barrels, but are still at historically high levels for this time of year, the EIA said. Analysts surveyed by The Wall Street Journal had predicted supplies would fall by 2.6 million barrels on the week. Oil stored at the Cushing, Okla., delivery point for U.S. stocks, decreased by 704,000 barrels to 66.9 million barrels, the EIA said in its weekly report. Gasoline stockpiles decreased by 1.5 million barrels to 238.6 million barrels. Analysts were expecting a 600,000-barrel decline. Distillate stocks, which include heating oil and diesel fuel, fell by 1.3 million barrels to 149.6 million barrels, but remain "well above" the upper limit of the average range, the EIA said. Analysts had expected supplies to decline by 600,000 barrels from a week earlier. Refining capacity utilization rose by just 0.1 percentage points from the previous week to 89.8%. Analysts were expecting a 0.8-percentage-point increase from the previous week. Write to Dan Molinski at Dan.Molinski@wsj.com Credit: By Dan Molinski
Subject: Price increases
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 2, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793334205
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793334205?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
New Petrobras Chief Backs Opening Offshore Oil Fields to Foreign Firms; Pedro Parente is formally appointed as state-run company's CEO
Author: Connors, Will
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2016: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--The new chief executive of Brazilian state-run oil firm Petróleo Brasileiro SA said Thursday that he supports a bill that would open up coveted offshore oil fields to foreign companies, signaling the latest change in tack for a country that has for years closely protected one of its most-prized assets. Pedro Parente, who was formally appointed chief executive at a ceremony Thursday at Petrobras's headquarters here, said the current law governing deepwater oil fields, known as pre-salt, "does not meet the interests of the company or the country." "The euphoria and triumphalism of recent years won't work anymore to hide the company's current situation," Mr. Parente said. A proposed bill would change part of a 2010 law that requires Petrobras to be the lead operator and hold at least a 30% share of any drilling projects in these oil-rich fields located in deep waters about 200 miles off Brazil's southeastern coast. Instead, Petrobras would be offered the right of refusal to control and drill each field before it was put up for auction. Brazil's Senate in February approved the bill, but it faces fierce resistance from opponents who consider it an affront to the country's control of a prized natural resource. The Senate approval and now Mr. Parente's support are the strongest signals yet that the bill has a chance at becoming law. Proponents of the change say it could help attract fresh capital from foreign oil companies, many of which balked at the old rules, and bring in more oil revenue for Brazil's government. It also lifts a costly mandate from Petrobras, which has had to borrow heavily to participate in pre-salt deals. Mr. Parente said Thursday that if the pre-salt requirements aren't changed, it will slow the exploration of the fields and "restrict the freedom of choice of the company." Aside from the pre-salt law, Mr. Parente said Thursday that he would follow through on a plan laid out by his predecessor, Aldemir Bendine, to sell assets to deal with the company's $126 billion debt load, the biggest in the global oil industry. On Thursday Mr. Parente said reducing debt will be his main "obsession," and blamed the company's debt on "unrealistic projects" such as multibillion refineries, several of which have seen costs balloon and end-dates delayed. Mr. Parente said the company would present a new, more-detailed business plan in 120 days. His plans may be more easily proposed than executed. Aside from local resistance to pre-salt law changes, the fall in global oil prices has potential bidders for Petrobras assets facing their own struggles. Of $15 billion that Petrobras hoped to raise in 2015 and 2016 by selling assets, the company has so far managed to raise only about $2 billion. Mr. Parente will also have to deal with the continued fallout from Brazil's biggest ever corruption scandal , which forced Petrobras to write off tens of billions of dollars due to corruption and inflated contracts. The company has said it was a victim of the scheme and is cooperating with investigations. As the company worked to push past the scandal, losses piled up. In March the company reported its biggest quarterly loss ever , when it wrote off 49.75 billion reais ($13.79 billion) in assets and investments. Mr. Parente, who was a board member from 1999 to 2003, and was its chairman for nine months, said Thursday that he would work to restore Petrobras's reputation. While discussing his return to the company and thanking his family for their understanding, Mr. Parente appeared to tear up, and chastised a photographer who took a picture of him while he wiped his nose with a handkerchief. Write to Will Connors at william.connors@wsj.com Credit: By Will Connors
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 2, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793334230
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793334230?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
OPEC: This Is No Way to Run an Oil Cartel; OPEC's failure to act on output is becoming par for a cartel that is a shadow of its former self
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 June 2016: n/a.
Abstract:
"There was consensus that market fundamentals are working and there wasn't pressure on OPEC to think about influencing supply and demand," said Mohammed al-Sada, Qatar's energy minister.
Full text: Look ma, no hands! For a short while, it seemed that the Organization of the Petroleum Exporting Countries would start acting like a cartel again by putting a ceiling on the group's production of crude. But that was wishful thinking given what happened in April at the oil producers' summit in Doha. Irreconcilable political and economic differences between Saudi Arabia and Iran torpedoed a proposed production freeze. Those same differences again led to a lack of action at Thursday's OPEC meeting, when they made no decision regarding output. Delegates put a brave face on this situation. "There was consensus that market fundamentals are working and there wasn't pressure on OPEC to think about influencing supply and demand," said Mohammed al-Sada, Qatar's energy minister. The market obliged him right on schedule. Shortly after the meeting in Vienna ended Thursday, the U.S. Energy Information Administration's report on inventories helped crude futures make up most of their post-OPEC losses. The market really is getting tighter as U.S. shale output rolls over. The process has been given an unexpected helping hand by recent outages in Canada and Nigeria. Venezuela, another trouble spot given its economic chaos, could add to the pressure. But that is pretty mild for now. With global crude and refined product inventories near record levels, the only shortages possible are localized, not systemic. After breaking briefly through the symbolic $50 a barrel mark last week, crude benchmarks have struggled to gain steam and were paying little heed to the OPEC meeting. Even the brief hope of a production ceiling was mostly dismissed by oil traders. OPEC now produces about 32 million barrels of crude daily, slightly more than it did 40 years ago. Back then, though, that was just under half of global supply; today it is one-third. This naturally makes OPEC less influential, but it faces two more significant problems. One is that its two most powerful members, Saudi Arabia and Iran, are in a fight for market share and involved in regional proxy wars. So they are unlikely to cooperate. A lack of unanimity makes a cartel unworkable. An even thornier issue is that technology has unlocked vast but expensive unconventional oil deposits. That puts an upper level on long-term oil prices of perhaps $60 or $70 a barrel, not the $100 plus seen two years ago. Any higher and wells that can produce oil with 100% certainty eight months after being drilled can flood the market. So is OPEC over? Not necessarily. Once the market balances and Iran fully ramps up production, it can return, albeit as a pale shadow of its 1970s dominance, to putting a floor under prices. For ceilings, the invisible hand will have to do from now on. Write to Spencer Jakab at spencer.jakab@wsj.com Credit: By Spencer Jakab
Subject: Supply & demand; Inventory; Price increases
Location: Qatar Iran United States--US Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 2, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793397594
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793397594?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices See-Saw After OPEC but Uptrend Intact; August Brent crude exchange rose $0.03 to $50.07 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 June 2016: n/a.
Abstract:
Brent crude, the international benchmark, bobbed at the $50 barrel mark in early Asian trade Friday as traders weighed their options between the upbeat U.S. oil data, the resumption of Canadian oil production and the Organization of the Petroleum Exporting Countries' decision not to impose a production ceiling.
Full text: Brent crude, the international benchmark, bobbed at the $50 barrel mark in early Asian trade Friday as traders weighed their options between the upbeat U.S. oil data, the resumption of Canadian oil production and the Organization of the Petroleum Exporting Countries' decision not to impose a production ceiling. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $49.15 a barrel at 0125 GMT, down $0.02 in the Globex electronic session. August Brent crude on London's ICE Futures exchange rose $0.03 to $50.07 a barrel. Overnight, Brent settled above $50 for the first time since November after the weekly U.S. crude inventories and production data by the Energy Information Administration showed steady declines. U.S. crude inventories have fallen in recent weeks but remain near the highest level in more than 80 years, a sign of the global glut of crude that has weighed on oil prices since mid-2014. "The drawdown occurred despite a significant increase in imports and relatively stable refinery utilization rates across the country," pricing agency Platts said and added that gasoline demand also continues to post impressive numbers. Domestic crude production fell to the lowest weekly level since September 2014, the agency said, indicating that spending cuts by oil companies are taking their toll on output. While oil prices have recovered in the past few months, they are still more than 50% lower than the levels in mid 2014, and mounting financial pressure on North American oil producers will likely decrease the region's oil production by around 500,000 barrels this year, said Daniel Hynes, senior commodity strategist at ANZ Research. He pointed out that in the first quarter alone, 268 U.S. energy companies had their ratings cut. Year to date, the number of rating downgrades has already exceeded the total number over the previous three years. Many analysts said these outcomes are what OPEC had envisioned when it implemented a hands-off policy nearly two years ago. Given that supply and demand of the oil markets has started to rebalance, it was not a surprise that the cartel decided to maintain the same policy at its biannual meeting on Thursday. "The fact oil prices didn't make any major movements shows the markets had zero expectations a production ceiling would be reached in the meeting," said Ric Spooner, chief analyst at CMC Markets. Nigeria's Mohammed Barkindo, a former head of state oil firm NNPC, who was named as OPEC's new secretary-general, said the group may come up with an output ceiling in the future but is comfortable without one for now. Going forward, the market will be watching the U.S. non-farm payroll data to be released by the Labor Department later today. Economists surveyed by The Wall Street Journal expect it will show payrolls rose by 158,000, with the unemployment rate steady at 5%. Analysts said an improvement in U.S. job data would give the Federal Reserves more reason to raise interest rates which would strengthen the dollar. As oil is pegged to the dollar, a stronger greenback usually does not bode well with traders using foreign currencies. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 91 points to $1.6255 a gallon, while July diesel traded at $1.5067, 21 points lower. ICE gasoil for June changed hands at $448.00 a metric ton, down $1.75 from Thursday's settlement. Nicole Friedman contributed to this article. Credit: By Jenny Hsu
Subject: Crude oil prices; Supply & demand; Inventory; Petroleum production
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793471100
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793471100?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall on Higher Rig Count; The number of rigs drilling for oil in the U.S. posted the first increase in 11 weeks
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 June 2016: n/a.
Abstract:
Related * Global Oil Prices Settle Above $50 a Barrel * Iranian Oil Minister Gains Influence in OPEC * OPEC Fails to Reach Agreement on Oil Production Ceiling * Gabon: OPEC's Newest Member * Heard on the Street: This Is No Way to Run an Oil Cartel * The World Without OPEC Oil investors are widely expecting robust U.S. demand for gasoline this summer, as drivers hit the road for vacation.
Full text: NEW YORK--Oil prices fell Friday as U.S. drilling activity picked up. The number of rigs drilling for oil in the U.S. rose by nine this week, the first increase in 11 weeks, Baker Hughes Inc. said Friday. The oil-rig count has plunged to multiyear lows in recent months as more than a year of low oil prices has prompted companies to sharply cut spending on new drilling. But oil prices have climbed more than 80% since February, fueling expectations that some companies would decide to start drilling again and flood the still-oversupplied market with more crude. "Any event that pumps up oil production and supplies once again will likely be oil-price negative," John LaForge, head of real asset strategy at the Wells Fargo Investment Institute, said in a note. "By year-end 2016, we envision oil prices slipping back below $45 per barrel." Weaker-than-expected U.S. jobs data also weighed on oil prices Friday by lowering expectations for gasoline demand. U.S. crude for July delivery settled down 55 cents, or 1.1%, at $48.62 a barrel. The contract fell 1.4% this week. Brent, the global benchmark, fell 40 cents, or 0.8%, to $49.64 a barrel on ICE Futures Europe, posting a 0.6% weekly loss. U.S. companies added a seasonally adjusted 38,000 jobs in May , the weakest performance since September 2010, the Labor Department said Friday. Economists surveyed by The Wall Street Journal had predicted payrolls would rise by 158,000. Increased employment can boost demand for petroleum products, especially gasoline, as more commuters drive to work. Related * Global Oil Prices Settle Above $50 a Barrel * Iranian Oil Minister Gains Influence in OPEC * OPEC Fails to Reach Agreement on Oil Production Ceiling * Gabon: OPEC's Newest Member * Heard on the Street: This Is No Way to Run an Oil Cartel * The World Without OPEC Oil investors are widely expecting robust U.S. demand for gasoline this summer, as drivers hit the road for vacation. A slowdown in gasoline consumption could allow the global glut of crude, which has weighed on oil prices since mid-2014, to persist longer than traders currently expect. However, the U.S. dollar fell on the employment data, and a weaker greenback is typically supportive for oil prices. The WSJ Dollar Index, which tracks the dollar against a basket of other currencies, recently fell 1.5%. Oil is traded in dollars and becomes cheaper for foreign buyers when the dollar falls. Ongoing production outages in Nigeria, Canada and elsewhere have also supported prices in recent weeks. However, some of those outages are set to end. Some Canadian oil-sands facilities have started to resume operations after shutting down last month due to wildfires. And Libya's oil production has jumped by about one-third in two weeks due to the reopening of a major port. Gasoline futures settled down 2.71 cents, or 1.7%, to $1.6075 a gallon. Prices lost 1.9% this week. Diesel futures fell 2.07 cents, or 1.4%, to $1.4881 a gallon, posting a 0.9% weekly loss. Benoit Faucon and Chester Dawson contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Supply & demand; Energy economics; Employment; Futures; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: Baker Hughes Inc; NAICS: 213112, 333132, 3332 49
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793496147
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793496147?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Iranian Oil Minister Gains Influence in OPEC; Bijan Zanganeh has broken up several attempts to reduce crude production
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 June 2016: n/a.
Abstract:
(See an interactive graphic exploring how the oil market has changed since OPEC abandoned its role as swing producer. ) In his second tour of duty as oil minister, according to people who know him, Mr. Zanganeh has his sights set on reordering the balance of power among the world's biggest producers, especially with Saudi Arabia, Iran's biggest rival and the de facto leader of OPEC, the 14-nation cartel that controls over a third of the world's oil.
Full text: VIENNA--When a handful of OPEC countries floated a proposal to reintroduce production limits on members on Wednesday, it took only a few hours for Iran to quash the idea with the words of one man: Bijan Zanganeh. By Thursday morning, support for the limits had faded and the Organization of the Petroleum Exporting Countries took no action on production at its meeting. Iran's oil minister has taken on a more powerful role among the world's biggest energy producers in recent months, as his country attempts an economic comeback with petroleum sales following the end of Western sanctions in January. Mr. Zanganeh, 63 years old, has now broken up several attempts to reduce a flood of crude oil from both OPEC, which includes Iran, and nonmembers like Russia and the U.S. The glut pushed oil prices to new lows over the winter, but Iran sees production-cap proposals as an effort to rein in its resurgent oil sales. (See an interactive graphic exploring how the oil market has changed since OPEC abandoned its role as swing producer. ) In his second tour of duty as oil minister, according to people who know him, Mr. Zanganeh has his sights set on reordering the balance of power among the world's biggest producers, especially with Saudi Arabia, Iran's biggest rival and the de facto leader of OPEC, the 14-nation cartel that controls over a third of the world's oil. Mr. Zanganeh's ascent comes as Saudi Arabia embarks on a high-profile plan to reduce its dependence on oil revenue. The kingdom replaced its longtime oil minister last month, Ali al-Naimi, and power over its petroleum industry appears to rest more with Deputy Crown Prince Mohammed bin Salman, second in line to the throne. "Now Naimi is gone, [Zanganeh] is the most experienced" OPEC minister, said John Hall, chairman of U.K. consultancy Alfa Energy and a longtime observer of the cartel. Mr. Zanganeh "will push for maximum output. And the Saudis won't compromise either," Mr. Hall said. Mr. Zanganeh declined several requests for an interview. Iran and Saudi Arabia are using oil policy as a tool in the contest for influence in the Middle East. The two countries' diplomatic ties are at historic lows as they back different sides in violent conflicts in Syria and Yemen and represent the national embodiment of different strains of Islam. Tehran wants its production to reach pre-sanction levels of 4 million barrels a day or more, after falling below 2.7 million barrels a day while the U.S. and other Western nations restricted trade with Iran over its nuclear program. Iran is getting closer to the mark, Mr. Zanganeh told reporters Thursday, with output now at 3.8 million barrels a day. As oil minister from 1997 to 2005, Mr. Zanganeh gained a reputation for brinkmanship, matching the Saudis barrel for barrel in a production war that helped send oil prices crashing to $10 a barrel in the late 1990s. He then reached an understanding to curb output with Mr. Naimi that helped prices climb for a decade. Mr. Zanganeh was appointed to his second stint as oil minister in 2013 and has mostly frustrated his Saudi counterparts, including a Saudi-backed plan last April to place new limits on oil production in an agreement with Russia. The proposal failed after Iran refused to join. Saudi Arabia's new oil minister, Khalid al-Falih, is a longtime oil man in the kingdom, having run the Saudi Arabian Oil Co., or Saudi Aramco. He isn't known for the relationships he has built among OPEC ministers, though observers said he would have much sway as the leader of the oil industry in a country that exports more crude than any other. Mr. Zanganeh "has lots of advantages in OPEC, including Iran's rising production and his experience," said Jamie Webster, a fellow at the Center for Global Energy Policy at Columbia University. Related * OPEC's Rituals Changing as a New Guard Takes Over * Heard on the Street: This Is No Way to Run an Oil Cartel * Global Oil Prices Settle Above $50 a Barrel By contrast, Mr. Zanganeh is a survivor in the abrasive cauldron of Iranian politics. He is known simply as the "Prince of the Ministers," a nickname picked up after serving as in various ministerial posts over 25 years. During his government service, he helped the war effort against Iraq by delivering food, building roads and developing devices to deflect French-made Iraqi missiles. He built dams as energy minister and served as oil minister under reformist President Mohammad Khatami. He was fired after President Mahmoud Ahmadinejad's election in 2005. He has been known to be a tough, even short-tempered negotiator, though one that can ultimately accept compromise. One official at China's state-run oil company Sinopec recalled a conversation in which Mr. Zanganeh shouted and turned red as he exhorted a company to double production at an oil field. A deputy to Mr. Zanganeh said, "He is so full of energy he's hard to follow." People who know Mr. Zanganeh said he is motivated by a desire to use the country's oil revenue to alleviate unemployment. "All these young unemployed graduates sitting at home, it's a disaster," the official said. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Supply & demand; Cartels; Pricing policies; Sanctions; Crude oil prices; Petroleum production
Location: Iran Russia United States--US Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia Naimi, Ali I
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793496264
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793496264?accountid=71 17
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Hover Around $50 a Barrel After OPEC Meeting; August Brent crude was unchanged at $50.04 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 June 2016: n/a.
Abstract: None available.
Full text: Brent crude, the international benchmark, bobbed at the $50 barrel mark in Asian trade Friday as traders weighed their options between the upbeat U.S. oil data, the resumption of Canadian oil production and the Organization of the Petroleum Exporting Countries' decision not to impose a production ceiling. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July recently traded at $49.18 a barrel, up $0.01 in the Globex electronic session. August Brent crude on London's ICE Futures exchange was unchanged at $50.04 a barrel. Overnight, Brent settled above $50 for the first time since November after the weekly U.S. crude inventories and production data by the Energy Information Administration showed steady declines. U.S. crude inventories have fallen in recent weeks but remain near the highest level in more than 80 years, a sign of the global glut of crude that has weighed on oil prices since mid-2014. "The drawdown occurred despite a significant increase in imports and relatively stable refinery utilization rates across the country," pricing agency Platts said and added that gasoline demand also continues to post impressive numbers. Domestic crude production fell to the lowest weekly level since September 2014, the agency said, indicating that spending cuts by oil companies are taking their toll on output. While oil prices have recovered in the past few months, they are still more than 50% lower than the levels in mid 2014, and mounting financial pressure on North American oil producers will likely decrease the region's oil production by around 500,000 barrels this year, said Daniel Hynes, senior commodity strategist at ANZ Research. He said that in the first quarter alone, 268 U.S. energy companies had their ratings cut. The number of rating downgrades so far this year has already exceeded the total number over the previous three years. Many analysts said these outcomes are what OPEC had envisioned when it implemented a hands-off policy nearly two years ago. Given that supply and demand of the oil markets has started to rebalance, it wasn't a surprise that the cartel decided to maintain the same policy at its biannual meeting on Thursday. "The fact oil prices didn't make any major movements shows the markets had zero expectations a production ceiling would be reached in the meeting," said Ric Spooner, chief analyst at CMC Markets. Nigeria's Mohammed Barkindo, a former head of state oil firm NNPC, who was named as OPEC's new secretary-general, said the group may come up with an output ceiling in the future, but for now is comfortable without one. In the absence of an agreement, many analysts say the meeting struck a collegial tone and the "improved atmosphere" makes future cooperation among the cartel members more likely. "Tensions between Saudi Arabia and Iran seemed lower. New Saudi Energy Minister Khalid al-Falih struck a more conciliatory tone, as did his Iranian counterpart Bijan Zanganeh," said Michael Wittner, chief oil analyst at Société Générale, in a note. Going forward, the market will be watching the U.S. nonfarm payroll data to be released by the Labor Department today. Economists surveyed by The Wall Street Journal expect it will show payrolls rose by 158,000, with the unemployment rate steady at 5%. Analysts said an improvement in U.S. job data would give the Federal Reserves more reason to raise interest rates which would strengthen the dollar. As oil is pegged to the U.S. dollar, a stronger greenback usually doesn't bode well with traders using foreign currencies. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 58 points to $1.6288 a gallon, while July diesel traded at $1.5086, 2 points lower. ICE gasoil for June changed hands at $448.00 a metric ton, down $1.75 from Thursday's settlement. Nicole Friedman contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793507508
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793507508?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Company Warren Resources Files for Chapter 11 Bankruptcy Protection; Blackstone's GSO Capital Partners to take control of Warren in debt-for-equity swap
Author: Fitzgerald, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 June 2016: n/a.
Abstract:
In court papers filed in U.S. Bankruptcy Court in Houston, Denver-based Warren said lenders led by GSO Capital will swap $248 million they are owed for an 82.5% stake in the reorganized company.
Full text: Warren Resources Inc., an oil and gas producer that operates in California, Pennsylvania and southwestern Wyoming, filed for bankruptcy protection Thursday after reaching a deal on the terms of a debt-for-equity swap with Blackstone Group's GSO Capital Partners. In court papers filed in U.S. Bankruptcy Court in Houston, Denver-based Warren said lenders led by GSO Capital will swap $248 million they are owed for an 82.5% stake in the reorganized company. The investment firm has also agreed to provide it with a $130 million bankruptcy-exit loan and an additional $20 million to fund the chapter 11 case. Junior lender Claren Road Asset Management LLC, a struggling hedge fund owned by Carlyle Group, bondholders and Citrus Energy will divide among themselves the remaining 17.5% stake in the reorganized company. The restructuring pact, which requires court approval, will form the basis of Warren Energy's chapter 11 plan. Warren, with about $230 million in assets and $545 million in debts, joins more than 80 North American oil and gas companies that have filed for bankruptcy protection since last year, according to law firm Haynes & Boones. Although benchmark U.S. oil prices have recently rebounded to more than $40 a barrel since hitting a 13-year low in February, they are still well below the $100 per barrel producers were getting as recently as the summer of 2014. In the aftermath of the collapse in oil and natural gas prices, the company moved its headquarters to Denver from New York and closed its offices in New York and Roswell, N.M., to reduce expenses. It failed to make a $7.5 million interest payment on Feb. 1. Warren Resources is slated to make its chapter 11 debut Friday before U.S. Bankruptcy Judge Marvin Isgur in Houston. Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com Credit: By Patrick Fitzgerald
Subject: Bankruptcy reorganization; Bankruptcy; Energy economics; Natural gas utilities; Natural gas prices
Location: Pennsylvania United States--US California New York
Company / organization: Name: Claren Road Asset Management; NAICS: 525990; Name: Warren Resources Inc; NAICS: 211111; Name: Bankruptcy Court-US; NAICS: 922110; Name: Carlyle Group; NAICS: 523110; Name: GSO Capital Partners LP; NAICS: 525990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 3, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793654337
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793654337?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Oil Rig Count Rose by Nine in Latest Week; Gas rigs fell by five, bringing count to 82
Author: Jamerson, Joshua
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 June 2016: n/a.
Abstract:
According to Baker Hughes, the number of U.S. gas rigs fell by five in the latest week to 82.
Full text: The U.S. oil-rig count rose by nine to 325 in the latest reporting week, according to oil-field services company Baker Hughes Inc., an uptick that comes amid a broader trend of declines. The number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, has fallen sharply since oil prices began to tumble in 2014. The number of oil rigs in the U.S. peaked at 1,609 in October 2014. According to Baker Hughes, the number of U.S. gas rigs fell by five in the latest week to 82. The U.S. offshore-rig count was 21 in the latest week, down three from last week and down six from a year earlier. Oil prices fell further below the key $50 threshold Friday, as weaker-than-expected U.S. jobs data lowered expectations for gasoline demand and weighed on the dollar. U.S. crude was recently down 1.6% to $48.40 a barrel. Write to Joshua Jamerson at joshua.jamerson@wsj.com Credit: By Joshua Jamerson
Subject: Oil service industry; Supply & demand
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 3, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793661715
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793661715?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Train Carrying Oil Derails in Columbia River Gorge; Interstate 84 shut down, schools evacuated near Mosier, Ore.
Author: Lazo, Alejandro; Morris, Betsy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 June 2016: n/a.
Abstract:
The spokesman said oil was released from at least one railcar and the railroad's hazardous-materials experts were responding to the scene along with other contractors, equipped with air-monitoring equipment, firefighting foam and other equipment, as well as a boom to contain an oil spill.
Full text: A Union Pacific Corp. train carrying crude oil through the scenic Columbia River Gorge in northern Oregon derailed on Friday and caught fire, prompting the shutdown of Interstate 84 and the evacuation of a local school, federal and local officials said. The derailment occurred around 12:20 p.m. PDT, according to a spokesman for Union Pacific, and involved 11 railcars of the 96-car train. The spokesman said oil was released from at least one railcar and the railroad's hazardous-materials experts were responding to the scene along with other contractors, equipped with air-monitoring equipment, firefighting foam and other equipment, as well as a boom to contain an oil spill. The train originated in Eastport, Idaho, and was headed for Tacoma, Wash., carrying Bakken crude oil. There were no injuries or deaths. The derailment occurred near the town of Mosier, which is along the Columbia River about 70 miles east of Portland, said Tom Fuller, a spokesman for the state Department of Transportation. It is unknown if oil was spilling into the river, said Richard Hoover, a spokesman for the Oregon Office of State Fire Marshal. Schools in Mosier were evacuated and images of the derailment on local news stations showed large plumes of smoke coming from the site of the derailment. Oregon Gov. Kate Brown thanked local first responders, hazardous-materials teams and other state agencies for "doing their best to keep the community of Mosier safe." "I am closely monitoring the situation and ready to make every state resource available as needed," Ms. Brown said. The derailment follows a cluster of such incidents in North America over the past few years, including the oil-train wreck in Canada that killed 47 people in 2013 and a derailment in Virginia that spilled thousands of gallons of oil into the James River the following year. Write to Alejandro Lazo at alejandro.lazo@wsj.com and Betsy Morris at betsy.morris@wsj.com Credit: By Alejandro Lazo and Betsy Morris
Subject: Oil spills; Crude oil
Location: Idaho
Company / organization: Name: Union Pacific Corp; NAICS: 482111, 484121, 486110, 324110, 211111; Name: Department of Transportation; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 3, 2016
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793679840
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793679840?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Train Carrying Oil Derails in Columbia River Gorge; Interstate 84 shut down, schools evacuated near Mosier, Ore.
Author: Lazo, Alejandro; Morris, Betsy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 June 2016: n/a.
Abstract:
A Union Pacific Corp. train carrying crude oil through the scenic Columbia River Gorge in northern Oregon derailed on Friday and caught fire, prompting the shutdown of Interstate 84 and the evacuation of a local school, federal and local officials said.
Full text: A Union Pacific Corp. train carrying crude oil through the scenic Columbia River Gorge in northern Oregon derailed on Friday and caught fire, prompting the shutdown of Interstate 84 and the evacuation of a local school, federal and local officials said. The derailment occurred around 12:20 p.m. PDT, according to a spokesman for Union Pacific, and involved 11 railcars of the 96-car train. The spokesman said oil was released from at least one railcar and the railroad's hazardous-materials experts were responding to the scene along with other contractors, equipped with air-monitoring equipment, firefighting foam and other equipment, as well as a boom to contain an oil spill. The train originated in Eastport, Idaho, and was headed for Tacoma, Wash., carrying Bakken crude oil. There were no injuries or deaths. The derailment occurred near the town of Mosier, which is along the Columbia River about 70 miles east of Portland, said Tom Fuller, a spokesman for the state Department of Transportation. Washington Gov. Jay Inslee said there are "no reports of oil entering the Columbia River" and no injuries. Mr. Inslee, who last year supported a bill in Washington that increased oversight of crude-oil transports through the state, said the derailment "is yet another reminder of the risks and concerns of crude-by-rail transport in our region." Schools in Mosier were evacuated and images of the derailment on local news stations showed large plumes of smoke coming from the site of the derailment. Oregon Gov. Kate Brown thanked local first responders, hazardous-materials teams and other state agencies for "doing their best to keep the community of Mosier safe." "I am closely monitoring the situation and ready to make every state resource available as needed," Ms. Brown said. The derailment follows a cluster of such incidents in North America over the past few years, including the oil-train wreck in Canada that killed 47 people in 2013 and a derailment in Virginia that spilled thousands of gallons of oil into the James River the following year. Write to Alejandro Lazo at alejandro.lazo@wsj.com and Betsy Morris at betsy.morris@wsj.com Credit: By Alejandro Lazo and Betsy Morris
Subject: Oil spills; Rivers
Location: Idaho
People: Inslee, Jay
Company / organization: Name: Union Pacific Corp; NAICS: 482111, 484121, 486110, 324110, 211111; Name: Department of Transportation; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 4, 2016
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspap ers
Language of publication: English
Document type: News
ProQuest document ID: 1793686138
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793686138?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Drillers Have a Few Sweet Spots Left; In Permian Basin, section of Oklahoma, companies can profit despite low energy prices
Author: Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 June 2016: n/a.
Abstract: None available.
Full text: America's oil and gas producers are still finding places where they can prosper even at today's lower prices. Companies are refocusing their drilling efforts on the Permian Basin in Texas and New Mexico and rushing into a part of Oklahoma known as the Stack where they can claim solid returns. While small in terms of overall production, the move is gathering steam, even as drilling in places like North Dakota and Pennsylvania remains sluggish. Wells in the Permian and the Stack--which stands for Sooner Trend, Anadarko basin, and Canadian and Kingfisher counties--are racking up between 10% and 30% returns based on oil priced at $45 a barrel, operators say; premium wells are generating greater profit. In part, returns benefit from access to established pipeline, storage and other infrastructure. Drillers in both areas have been able to find energy stacked in layers underground. Some producers also are tapping holdings that were acquired long ago, when acquisition costs were lower. Continental Resources Inc., which helped spark the North Dakota boom, says its best wells today are in the Stack--a well-trod part of Oklahoma near Cushing, Okla., a major oil storage and trading hub. The company says its drilling there can yield a 75% return with oil at $45 a barrel. The company recently announced a gusher of a well in the field. "These wells are among the best-performing wells I've been involved with in my entire career," Harold Hamm, Continental's chief executive, told investors last month. Of the 57 rigs currently drilling in Oklahoma, about half are in the Stack, and 11 of those are Continental's, the company said. As U.S. oil futures, which closed on Friday at $48.62 a barrel, rebounded and recently approached $50 a barrel, some large and midsize energy companies have said they are planning to step up production in lower-cost areas. The gains aren't likely to tip the scales toward greater production or hiring nationwide, but they are tempering some of the decline elsewhere. "Now we're talking about plays that can break even or do better at $45 oil," said John Freeman, an energy analyst at Raymond James & Associates. Another area where production is still rising is the Permian Basin, which spans parts of West Texas and New Mexico. The Permian, a major oil-producing area for decades, has been reborn as the combination of horizontal drilling and hydraulic fracturing have helped companies tap oil trapped in dense rock formations. Operators there now pump more than 2 million barrels of oil a day, more than in any other U.S. drilling region, according to estimates from the U.S. Energy Information Administration. Related * Wanna Bet on Oil Companies? It's All About the ZIP Code * In West Texas, Oil Drillers Keep Pumping * Big Oil Deals: Don't Hold Your Breath The Permian's low production costs are luring companies like Occidental Petroleum Corp. away from other fields. Vicki Hollub, Occidental's chief executive, recently told investors that the area would be the company's highest priority. "We feel like that is where we get the most value for the dollars we invest," she said. Pioneer Natural Resources Co., currently the most active driller in the Permian, said it is planning to add more rigs to its operations--one or two at a time--when oil prices hit $50 a barrel. Chevron Corp. said it has identified some 4,000 wells in the Permian that can generate a 10% return at that price, as well costs in the area have fallen even as output increases. "We see our activity in the Permian as being very, very, strong," Joseph Geagea, Chevron's executive vice president of technology, projects and services, told investors in April. The fortunes of these areas could change as quickly the old ones. Just a few years ago, energy workers were streaming into North Dakota, pushing rental prices sky high and spawning hotel construction as they looked for work on or around one of the more than 200 rigs drilling in the Bakken Shale formation. Today, energy is still drawing workers to places like El Reno, a city of roughly 20,000 about 30 miles west of Oklahoma City, where Halliburton Co. has an office and repair facility. "Our motels are still pretty much full," said El Reno Mayor Matt White. "We really are excited about the energy play out here. It's a big deal for us." PayRock Energy LLC, a private-equity-backed outfit that buys acreage to drill and flip, said there has been so much interest in its Stack property that the company has put all its 58,000 acres on the market. "Little guys, private guys, public guys, in-basin guys, out-of-basin guys--you name it," said John Zimmerman, PayRock's vice president of finance. "Everybody who is in the Stack wants more of it." Case in point: Newfield Exploration Co. recently paid $470 million to Chesapeake Energy Corp. for more than 40,000 acres that complement its existing footprint in the Stack. The Texas-based energy explorer has shifted most of its activity to Oklahoma, where it will spend 90% its $650 million budget this year. Newfield has just one rig now running in North Dakota's Bakken region, and has deferred all drilling in Utah and South Texas. Even when prices rise, the company is most likely to increase activity in Oklahoma first. "The industry has really voted with its checkbook," said Stephen Campbell, a Newfield vice president. Write to Erin Ailworth at erin.ailworth@wsj.com Credit: By Erin Ailworth
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 5, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 179382 9619
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793829619?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi Arabia Cuts Oil Prices in Europe as Iran Ramps Up Exports; Move follows OPEC's failure to reach deal on capping production
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 June 2016: n/a.
Abstract:
[...]Saudi Arabia and Iran have been matching each other's price cuts, though they deny offering special, private discounts to individual buyers.
Full text: Saudi Arabia on Sunday cut its oil prices to Europe, signaling mounting competition after OPEC failed to cap its output amid Iran's exports ramp up. In an email sent to customers, state oil company Saudi Aramco said it had cut its light crude prices by 35 cents a barrel to northwest Europe and by 10 cents a barrel to the Mediterranean for July deliveries. The price reduction is surprising, as demand typically grows in the second half of the year as refineries return from maintenance. In addition, markets have recently been buoyed by outages in countries like Nigeria. But Saudi Arabia's move comes after the Organization of the Petroleum Exporting Countries last Thursday failed to agree on a production ceiling. The absence of output limits effectively gives a blank check for the group's two most influential members and rivals, Saudi Arabia and Iran, to pump at will. Geopolitical tensions helped scotch the deal on capping production, with Iran taking a firm stand late last Wednesday against any move that would limit its own production as it aims for an economic comeback following the end of Western sanctions in January. By contrast, Saudi Arabia had expressed openness for a collective output cap. The two Persian Gulf nations, which belong to rival sects of Islam, are jockeying for political influence in hotspots such as Yemen and Syria. The the European price cut on Sunday also exemplifies their intense competition for oil markets. Iran resumed its crude exports to the European Union in February after an EU embargo on its oil was lifted and is now heavily competing there with Saudi Arabia, which had partly replaced Iran as a source of European supply during the sanctions. Shipments from Iran to the EU have now reached 400,000 barrels a day. They are set to increase to 700,000 barrels a day in the coming months after Iran clinched deals with Greek, French and Italian refiners, according to Iranian officials. By contrast, Saudi Arabia exported 800,000 barrels a day on average to Europe last year, according to the International Energy Agency. As a result, Saudi Arabia and Iran have been matching each other's price cuts, though they deny offering special, private discounts to individual buyers. Iran believes it will ultimately have the upper hand, as its finances are less dependent on oil. "Saudi Arabia will be big loser in the price war," Akbar Nematollahi, the head of public relations at Iran's oil ministry, wrote last month in the ministry's in-house magazine. Some European oil producers could be collateral victims of the rivalry. Northern European oil producers, mostly in the U.K. and Norway, have struggled to attract new investments amid depressed oil prices. Competition for market share has been less intense in Asia, where Iran was always allowed to sell. On Sunday, Saudi Arabia increased its light-crude prices to the Far East by 35 cents a barrel. It also raised prices by 10 cents a barrel in the U.S., where Iran is still banned from selling. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By BENOIT FAUCON
Subject: Competition; Crude oil prices; Price cuts; Price increases
Location: Europe Iran Nigeria Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 5, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793830167
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793830167?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Slightly Up; Pressure Remains; August Brent crude on London's ICE Futures exchange rose $0.32 to $49.96 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 June 2016: n/a.
Abstract:
[...]oil prices retreated over the weekend after data showed an uptick in U.S. drilling.
Full text: HONG KONG--Brent crude prices briefly rose above $50 a barrel in early Asian trading Monday on renewed hope for more cohesion within the Organization of the Petroleum Exporting Countries, but signs of higher crude production in the U.S. brought prices down. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $49.04 a barrel at 0231 GMT, up $0.42 in the Globex electronic session. August Brent crude on London's ICE Futures exchange rose $0.32 to $49.96 a barrel. Oil prices have been rising steadily since dropping to a 13-year low in February, thanks to demand from China and India, in addition to multiple supply outages around the world. Furthermore, analysts say the friendly atmosphere during OPEC's last meeting Thursday indicates the group is likely becoming more unified. JBC Energy described the meeting as "calm and focused." "We do think that the broader increasingly constructive market sentiment as well as concerns about insufficient investment levels are likely to largely sustain the prices close to the $50 level," the consultancy said. In an interview with Argus Media, Saudi's new oil chief, Khalid al-Falih, said the market will tighten as "expensive marginal supplies are declining, and this trend is likely to accelerate." However, many industry observers aren't so optimistic. "50 is the new norm," said OCBC economist Barnabas Gan, adding that many shale producers whose production costs on average vary from $30 to $50 a barrel are likely to be lured back to the oil fields, further drenching the still-oversupplied market. In fact, oil prices retreated over the weekend after data showed an uptick in U.S. drilling. On Friday, Baker Hughes said the number of rigs drilling for oil in the U.S. jumped by nine last week, the first increase in 11 weeks. "While not enough to materially change the outlook for U.S. production and false starts have occurred before, there are some early signs that rigs may be returning in the best acreage, namely the Permian Basin," Morgan Stanley analysts said. The bank said rig count usually has a lag time of three to four months before responding to price signals. This suggests an inflection will likely occur over the next one to two months, said the bank. The latest weaker-than-expected U.S. jobs data also weighed on oil prices Friday by lowering expectations for gasoline demand. For this week, investors will be watching for China's May trade data and the U.S. weekly report on crude inventories and production. Both are scheduled to be released on Wednesday. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--rose 115 points to $1.6190 a gallon, while July diesel traded at $1.4944, 63 points higher. ICE gas oil for June changed hands at $444.50 a metric ton, up $1.50 from Friday's settlement. Nicole Friedman contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: International markets; Gasoline; Crude oil prices
Location: United States--US China India
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793834638
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793834638?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Test Your Smarts on Oil, Hedge Funds, Interest Rates
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 June 2016: n/a.
Abstract: None available.
Full text: How much do you know about last month's news in fund investing and markets? Test your smarts on oil, hedge funds, interest rates and more.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793839715
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793839715?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Investing in Funds & ETFs: A Monthly Analysis --- News Challenge: The Month in Funds and Investing: Test Your Smarts on Oil, Hedge Funds, Rates
Author: Adinolfi, Joseph
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 June 2016: R.10.
Abstract:
In an effort to beat back an unwanted takeover attempt by Gannett, Tribune Publishing sold a 12.9% stake to which investment firm? A. Nant Capital LLC B. Advanced Technology Ventures C. Andreessen Horowitz D. Oaktree Capital Management ANSWER:
Full text: Stock markets rose for a fourth straight month in May, even as the Federal Reserve warned that its next rate increase could come as soon as this summer. The Fed's hawkish tilt helped push the dollar and short-term Treasury yields higher, but stoked uneasiness about already high stock valuations, causing some to question whether shares can keep rising in an era of higher interest rates. Crude-oil prices continued to rise, but it didn't lead to sharp gains in energy shares. The Dow Jones Industrial Average eked out a monthly gain of 0.08%, its smallest so far this year. How much do you know about last month's news in fund investing and markets? Here's a quiz to test your knowledge. --- 1. A judge blocked a proposed merger of these two office-supply companies because of antitrust concerns. A. Staples Inc. and Office Depot Inc. B. Office Depot Inc. and OfficeMax Inc. C. W.B. Mason Co. and Staples Inc. D. Staples Inc. and OfficeMax Inc. ANSWER: A. U.S. District Judge Emmet G. Sullivan sided with the Federal Trade Commission, which alleged that the merger would lead to higher prices on office supplies for large corporations. --- 2. Oil prices broke above _________ a barrel in May, helped by falling U.S. supplies and production disruptions in Canada, Nigeria and Libya. A. $60 B. $65 C. $50 D. $30 ANSWER: C. Analysts said the move was an important moment for the commodity that could drive further gains. Oil hasn't traded above this level in seven months. --- 3. This longtime hedge-fund manager said that the industry's business model was "under assault" during the annual SkyBridge Alternatives Conference. A. Bill Ackman B. Jim Chanos C. Paul Brewer D. Leon Cooperman ANSWER: D. During his talk, Mr. Cooperman said he was contemplating whether it was worth it to stay in the hedge-fund industry. --- 4. Halliburton Co. said it would pay a ____________ breakup fee to Baker Hughes after the two companies called off a planned merger. A. $4 billion B. $5 billion C. $500 million D. $3.5 billion ANSWER: D. The merger, once valued at nearly $35 billion, encountered opposition from regulators on several continents. --- 5. Fill in the blank: Assets under management in so-called ____________ funds have grown this year as investors sought protection during periods when stocks were sinking. A. Smart beta B. Low volatility C. Strategic beta D. Volatility controlled ANSWER: B. The iShares Edge MSCI Min Vol USA exchange-traded fund took in $1.2 billion in April alone. --- 6. Plummeting interest rates overseas are helping to distort this popular gauge of the U.S. economy's health. A. The yield curve B. Fed-funds futures C. Five-year swap spreads D. Consumer-price index ANSWER: A. The gap between short-term and long-term U.S. Treasury yields recently narrowed to its flattest point since late 2007. --- 7. In an effort to beat back an unwanted takeover attempt by Gannett, Tribune Publishing sold a 12.9% stake to which investment firm? A. Nant Capital LLC B. Advanced Technology Ventures C. Andreessen Horowitz D. Oaktree Capital Management ANSWER: A. Gannett would presumably need to purchase these additional shares, which could push the total cost of the company up nearly 15%. --- 8. This German pharmaceutical giant's shares dropped more than 14% in May after it offered to buy Monsanto, a U.S. agrochemical company. A. Roche B. Merck C. Bayer D. Abbott ANSWER: C. Some investors are saying Bayer doesn't have scope to raise its offer for Monsanto in part because of the drop in its share price. --- 9. Concerns about nonperforming loans have pummeled shares of this Italian bank, ultimately leading its CEO to agree to resign. A. Banca d'Italia B. Banca Monte dei Paschi di Siena C. Intesa Sanpaolo D. UniCredit ANSWER: D. Federico Ghizzoni was criticized for UniCredit's decision to underwrite a 1.5 billion euro ($1.7 billion) capital increase of troubled lender Banca Popolare di Vicenza SpA. --- 10. Which sector was the best performer in the S&P 500 index in May as investors snapped up shares at low valuations after a selloff in April? A. Energy B. Information technology C. Consumer discretionary D. Health care ANSWER: B. A series of weak earnings reports caused technology shares to miss out on a broader market rally in March and April. But they made up for lost time in May, rising 4.5%. --- Mr. Adinolfi is a markets reporter for MarketWatch in New York. Email him at joseph.adinolfi@dowjones.com. Credit: By Joseph Adinolfi
Subject: Interest rates; Acquisitions & mergers; Office supplies; Investments; Tender offers; Consumer Price Index; Hedge funds
Location: United States--US
Company / organization: Name: Monsanto Co; NAICS: 325199, 325180; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: OfficeMax Inc; NAICS: 453210; Name: Office Depot Inc; NAICS: 453210; Name: Halliburton Co; NAICS: 213112, 237990; Name: Federal Trade Commission--FTC; NAICS: 926150
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: R.10
Publication year: 2016
Publication date: Jun 6, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793855123
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793855123?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibit ed without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Finance: Saudi Arabia Cuts Prices Of Oil Exports to Europe
Author: Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 June 2016: C.3.
Abstract:
[...]Saudi Arabia and Iran have been matching each other's price cuts, though they deny offering special, private discounts to individual buyers.
Full text: Saudi Arabia on Sunday cut its oil prices to Europe, signaling mounting competition after OPEC failed to cap its output as Iran's exports ramp up. In an email sent to customers, state oil company Saudi Aramco said it had cut its light crude prices by 35 cents a barrel to northwest Europe and by 10 cents a barrel to the Mediterranean for July deliveries. The price reduction is surprising, as demand typically grows in the second half of the year as refineries return from maintenance. In addition, markets have recently been buoyed by outages in countries like Nigeria. But Saudi Arabia's move comes after the Organization of the Petroleum Exporting Countries last Thursday failed to agree on a production ceiling. The absence of output limits effectively gives a blank check for the group's two most influential members and rivals, Saudi Arabia and Iran, to pump at will. Geopolitical tensions helped scotch a deal on capping production, with Iran taking a firm stand late last Wednesday against any move that would limit its own production as it aims for an economic comeback followingthe end of Western sanctions in January. The two Persian Gulf nations are jockeying for political influence in hot spots such as Yemen and Syria. Iran resumed its crude exports to the European Union in February after an EU embargo on its oil was lifted and is now heavily competing there with Saudi Arabia, which had partly replaced Iran as a source of European supply during the sanctions. Shipments from Iran to the EU have now reached 400,000 barrels a day. They are set to increase to 700,000 barrels a day in the coming months after Iran clinched deals with Greek, French and Italian refiners, according to Iranian officials. By contrast, Saudi Arabia exported 800,000 barrels a day on average to Europe last year, according to the International Energy Agency. As a result, Saudi Arabia and Iran have been matching each other's price cuts, though they deny offering special, private discounts to individual buyers. Iran believes it will ultimately have the upper hand, as its finances are less dependent on oil. "Saudi Arabia will be big loser in the price war," Akbar Nematollahi, the head of public relations at Iran's oil ministry, wrote last month in the ministry's in-house magazine. Some European oil producers could be collateral victims of the rivalry. Northern European oil producers, mostly in the U.K. and Norway, have struggled to attract new investments amid depressed oil prices. Competition for market share has been less intense in Asia, where Iran was always allowed to sell. On Sunday, Saudi Arabia increased its light-crude prices to the Far East by 35 cents a barrel. It also raised prices by 10 cents a barrel in the U.S., where Iran is still banned from selling. Credit: By Benoit Faucon
Subject: Price cuts; Petroleum production; Crude oil prices
Location: Iran Europe Nigeria Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Classification: 8510: Petroleum industry; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: Jun 6, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793855595
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793855595?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Drillers Have a Few Sweet Spots Left
Author: Ailworth, Eri n
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 June 2016: B.1.
Abstract:
The Permian, a major oil-producing area for decades, has been reborn as the combination of horizontal drilling and hydraulic fracturing have helped companies tap oil trapped in dense rock formations.
Full text: America's oil and gas producers are still finding places where they can prosper even at today's lower prices. Companies are refocusing their drilling efforts on the Permian Basin in Texas and New Mexico and rushing into a part of Oklahoma known as the Stack where they can claim solid returns. While small in terms of overall production, the move is gathering steam, even as drilling in places like North Dakota and Pennsylvania remains sluggish. Wells in the Permian and the Stack -- which stands for Sooner Trend, Anadarko basin, and Canadian and Kingfisher counties -- are racking up between 10% and 30% returns based on oil priced at $45 a barrel, operators say; premium wells are generating greater profit. In part, returns benefit from access to established pipeline, storage and other infrastructure. Drillers in both areas have been able to find energy stacked in layers underground. Some producers also are tapping holdings that were acquired long ago, when acquisition costs were lower. Continental Resources Inc., which helped spark the North Dakota boom, says its best wells today are in the Stack -- a well-trod part of Oklahoma near Cushing, Okla., a major oilstorage and trading hub. The company says its drilling there can yield a 75% return with oil at $45 a barrel. The company recently announced a gusher of a well in the field. "These wells are among the best-performing wells I've been involved with in my entire career," Harold Hamm, Continental's chief executive, told investors last month. Of the 57 rigs currently drilling in Oklahoma, about half are in the Stack, and 11 of those are Continental's, the company said. As U.S. oil futures, which closed on Friday at $48.62 a barrel, rebounded and recently approached $50 a barrel, some large and midsize energy companies have said they are planning to step up production in lower-cost areas. The gains aren't likely to tip the scales toward greater production or hiring nationwide, but they are tempering some of the decline elsewhere. "Now we're talking about plays that can break even or do better at $45 oil," said John Freeman, an energy analyst at Raymond James & Associates. Another area where production is still rising is the Permian Basin, which spans parts of West Texas and New Mexico. The Permian, a major oil-producing area for decades, has been reborn as the combination of horizontal drilling and hydraulic fracturing have helped companies tap oil trapped in dense rock formations. Operators there now pump more than 2 million barrels of oil a day, more than in any other U.S. drilling region, according to estimates from the U.S. Energy Information Administration. The Permian's low production costs areluring companies such as Occidental Petroleum Corp. away from other fields. Vicki Hollub, Occidental's chief executive, recently told investors that the area would be the company's highest priority. "We feel like that is where we get the most value for the dollars we invest," she said. Pioneer Natural Resources Co., currently the most active driller in the Permian, said it is planning to add more rigs to its operations -- one or two at a time -- when oil prices hit $50 a barrel. Chevron Corp. said it has identified some 4,000 wells in the Permian that can generate a 10% return at that price, as well costs in the area have fallen even as output increases. "We see our activity in the Permian as being very, very, strong," Joseph Geagea, Chevron's executive vice president of technology, projects and services, told investors in April. The fortunes of these areas could change as quickly the old ones. Just a few years ago, energy workers were streaming into North Dakota, pushing rental prices sky high and spawning hotel construction as they looked for work on or around one of the more than 200 rigs drilling in the Bakken Shale formation. Today, energy is still drawing workers to places like El Reno, a city of roughly 20,000 about 30 miles west of Oklahoma City, where Halliburton Co. has an office and repair facility. "Our motels are still pretty much full,"said El Reno Mayor Matt White. "We really are excited about the energy play out here. It's a big deal for us." PayRock Energy LLC, a private-equity-backed outfit that buys acreage to drill and flip, said there has been so much interest in its Stack property that the company has put all its 58,000 acres on the market. "Little guys, private guys, public guys, in-basin guys, out-of-basin guys -- you name it," said John Zimmerman, PayRock's vice president of finance. "Everybody who is in the Stack wants more of it." Case in point: Newfield Exploration Co. recently paid $470 million to Chesapeake Energy Corp. for more than 40,000 acres that complement its existing footprint in the Stack. The Texas-based energy explorer has shifted most of its activity to Oklahoma, where it will spend 90% its $650 million budget this year. "The industry has really voted with its checkbook," said Stephen Campbell, a Newfield vice president. Credit: By Erin Ailworth
Subject: Drilling; Hydraulic fracturing; Petroleum production
Location: Permian Basin Oklahoma
Company / organization: Name: Continental Resources Inc; NAICS: 211111; Name: Pioneer Natural Resources Co; NAICS: 211111; Name: Chevron Corp; NAICS: 211111, 324110; Name: Newfield Exploration Co; NAICS: 211111, 213111
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2016
Publication date: Jun 6, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793856232
Document URL: https://login.ezpro xy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793856232?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
'Niger Delta Avengers' Sabotage Oil Output; The group's attacks have cost Nigeria its position as Africa's largest producer and helped push up crude prices
Author: Hinshaw, Drew; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 June 2016: n/a.
Abstract:
Since the 1990s, Nigeria's government has been at odds with the residents of the Niger Delta, the Portugal-sized swamp where almost all of the country's oil lies. [...]recently, Nigeria has been able to exercise some basic level of control. Since 2009, the government has paid militants to stay out of trouble.
Full text: A band of saboteurs that calls itself the Niger Delta Avengers has been prowling the swamps of Nigeria's petroleum-rich south for four months, bombing pipelines and diving underwater to destroy equipment. The damage has helped tip Africa's biggest economy toward recession, and has cost Nigeria its position as the continent's top oil producer--a distinction inherited by Angola. The Avengers struck again before dawn on Friday. A group of militants sneaked through marshland to bomb two pipelines, one owned by Royal Dutch Shell PLC and the other owned by Italy's Eni SpA, according to Nigeria's navy. Shell confirmed signs of a spill from one of its pipelines and said it is still evaluating potential damage. Eni confirmed the attack but said it didn't contribute to any new supply disruption. On the group's purported Twitter account, it called the Eni attack part of its promise "that Nigeria Oil production will be Zero." The brazen strikes were the latest demonstration of destructive proficiency by the Avengers, which has considerably cut the amount of oil in global markets. The strikes have led Nigeria to shift some of the forces who have been fighting an Islamist insurgency. On and off for years, criminal groups in the Niger Delta have extorted and bombed oil companies for profit. Pipelines have also been sawed open by oil thieves, seeking to siphon off their valuable content. The Avengers seem to be more interested in undermining the administration of President Muhammadu Buhari, security consultants and government officials say. They say they are frustrated by the lack of information about who the Avengers are. Mr. Buhari, a former military dictator from Nigeria's north who was elected last year, is unpopular in much of the country's south: He received just 13% of the vote in the Niger Delta. "It is different this time," said Dolapo Oni, oil and gas analyst for Togo-based Ecobank Transnational Inc. "These guys are not stealing crude. They just bomb the pipelines and they run away. They just want to destroy." With near-weekly attacks that began in February, the militants have taken about one million barrels of oil a day out of production, according to Nigerian oil officials. The attacks have intensified in recent weeks. The lost production helped push crude prices above $50 a barrel recently for the first time since November. Roughly 96 million barrels of crude are produced globally every day, but supply exceeded demand by around 1.4 million barrels a day in the first quarter, according to the International Energy Agency, which monitors energy trends for industrialized countries, so the lost Nigerian production is almost as large as the excess daily output that has weighed down prices. "It is clearly having a material impact," said James Davis, head of oil supply at London-based consultancy Facts Global Energy. A few months ago, oil prices lingered at a 13-year-low. Goldman Sachs Group Inc. analysts predicted late last year that oil could fall as low as $20 a barrel. Instead, a series of disruptions--including a worker's strike in Kuwait, a blockade in Libya, and wildfires in Canada--have pushed prices up. Nigeria's government has publicly asked the Avengers to negotiate: "This government is a listening government," said Lai Mohammed, Nigeria's information minister. The Avengers have responded with a mix of threats, steep demands--such as redistribution of oil rights to local residents--and more attacks. The group has sabotaged at least 10 separate oil installations in the past month. It didn't respond to several emailed requests for an interview. "To the International Oil Companies and Indigenous Oil Companies, it's going to be bloody," the Avengers said in an online statement. "Your facilities and personnel will bear the brunt of our fury." Since the 1990s, Nigeria's government has been at odds with the residents of the Niger Delta, the Portugal-sized swamp where almost all of the country's oil lies. Decades of oil spills and a prevailing sentiment that the country's vast petroleum wealth has enriched only a few have pushed locals to bomb pipelines, kidnap oil workers, and steal oil. But until recently, Nigeria has been able to exercise some basic level of control. Since 2009, the government has paid militants to stay out of trouble. It has also hired thousands of militants to protect the pipelines they used to bomb and hacksaw open. The attacks come at a perilous moment for the nation of 187 million. Even before the Avengers arrived on the scene, Nigeria's government was running low on money. The country's reserves have plummeted so precipitously that the central bank has rationed access to foreign currency since last year, forcing businesses to shut down because they can't get the dollars they need to import spare parts or repay foreign lenders. The economy contracted by 0.36% in the first three months of this year. It is now headed into an "imminent" recession, Godwin Emefiele, governor of the central bank, said in May. Nigeria's government says it is working as quickly as it can to repair the damage the Avengers have done. To win support in the swampland region, Mr. Buhari has ordered a massive clean up operation there. Decades of oil spills have left the water so polluted that a United Nations report estimated a full cleanup would take 30 years. The military is also sending more troops into the swamps, even as it battles the Islamist insurgency Boko Haram in the north. To secure oil infrastructure, the army recently moved a group of U.S.-trained troops from the front against Boko Haram. It has also used surveillance planes to try to peer into the thick mangrove forests and find the Avengers' camps. "The military will continue to do its best," said Rabe Abubakar, spokesman for Nigeria's Defense Ministry. In May, the military posted troops around one of Chevron Corp.'s oil storage depots in the swamps. For three days, the Avengers had been vowing to attack it. But instead of storming the depot, the militants bombed a nearby gas pipeline. Hours later, the militants bombed a pair of crude pipelines supplying nearby refineries. "They knew exactly where to attack and the time to attack," said Mr. Oni, the oil analyst. "There was literally nothing you could do." Gbenga Akingbule in Abuja, Nigeria,contributed to this article. Write to Drew Hinshaw at drew.hinshaw@wsj.com and Sarah Kent at sarah.kent@wsj.com Credit: Drew Hinshaw, Sarah Kent
Subject: Pipelines; Petroleum production; Militancy
Location: Nigeria Niger Delta
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Eni SpA; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 6, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793867511
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793867511?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Rise as Global Outages Curb Supply; Outages in Canada and Nigeria have removed more than three million barrels from the market a day
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 June 2016: n/a.
Abstract:
More * Saudi Arabia Cuts Oil Prices in Europe Last week at a meeting between members of the Organization of the Petroleum Exporting Countries, Nigerian Oil Minister Emmanuel Ibe Kachikwu told reporters that he had met with militants to try to prevent future attacks and thereby reduce production outages.
Full text: Oil prices are pushing up, back toward $50 a barrel as outages keep curbing supplies. U.S. crude oil for July delivery was recently up 2.4% at $49.80 a barrel, but it had been down as much as 1.8% earlier. Brent, the global benchmark, gained 2.2% to $50.75 a barrel on ICE Futures Europe. Oil supply in Nigeria continues to be affected by attacks from Nigerian militants that have already cut it to multiyear lows. Friday morning bombings struck two pipelines, with Royal Dutch Shell PLC confirming signs of a spill from one it owned. The purported Twitter account of a band of saboteurs that calls itself the Niger Delta Avengers called one of the attacks part of its promise "that Nigeria Oil production will be Zero." So far it is down to about 1 million barrels a day from 1.8 million earlier this year, said Piper Jaffray Cos.' Simmons & Co. International, citing government officials. The bank's energy analysts said it appears Nigeria's Forcados export terminal won't reopen in June and that Nigerian production is more likely to come in below estimates this year, making it more likely global stockpiles will start to drain in the second half of the year. "If the Nigerian output goes to Zero ... (prices) are going higher," ICAP PLC broker Scott Shelton said in a note. "At this point, there is no sign that Nigeria is getting any better, and it's looking worse." More * Saudi Arabia Cuts Oil Prices in Europe Last week at a meeting between members of the Organization of the Petroleum Exporting Countries, Nigerian Oil Minister Emmanuel Ibe Kachikwu told reporters that he had met with militants to try to prevent future attacks and thereby reduce production outages. Full production at Forcados will be restored by the end of August, Mr. Kachikwu said. In recent weeks, outages in Nigeria and Canada have removed more than three million barrels of crude from the market a day. Citigroup's commodities strategies team said the supply-demand imbalances are likely to keep Brent oil above $50 a barrel in the third quarter, and up to around $65 by the end of 2017, the bank's analysts said in a note Monday. "Oil is not conducive to a stable price environment and expect a volatile path for prices," the bank said. However, investors are more pessimistic, Citigroup reported. It surveyed investors and found about 60% expecting prices to be between $35 and $55 a year from now. Only about 35% expect them to be higher than that, the bank said. Price gains are limited by U.S. production figures, which show that output is recovering. Higher oil prices are likely enticing U.S. producers back to the market, as oil becomes more cost-effective to produce, analysts said. A survey from Baker Hughes Inc. on Friday showed that active rig counts in the U.S. rose by nine last week, the first increase in 11 weeks. Many shale producers have costs between $30 to $50 a barrel and are likely lured into drilling more at current prices, further drenching the still-oversupplied market, said OCBC economist Barnabas Gan. If the trend continues, it could cause prices to tumble again as supply outstrips demand, analysts said. "One week does not make a trend but the increase in rigs is at least a warning sign ... that the supply balances in the U.S. may once again be turning toward the bearish side," Dominick Chirichella, analyst at the Energy Management Institute Gasoline futures gained 0.1% to $1.6085 a gallon. Diesel futures gained 1.1% to $1.5043 a gallon. Miriam Malek and Jenny W. Hsu contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Supply & demand; Petroleum production; Militancy; Price increases
Location: United States--US Nigeria
People: Kachikwu, Emmanuel Ibe
Company / organization: Name: Twitter Inc; NAICS: 519130; Name: Piper Jaffray Cos; NAICS: 523120; Name: Citigroup Inc; NAICS: 551111; Name: ICAP PLC; NAICS: 523140; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793867638
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793867638?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saboteurs Hit Nigerian Oil --- Attacks by the Niger Delta Avengers have cut output, helping to push up crude prices
Author: Hinshaw, Drew; Kent, Sarah
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 June 2016: A.1.
Abstract:
Since the 1990s, Nigeria's government has been at odds with the residents of the Niger Delta, the Portugal-sized swamp where almost all of the country's oil lies. [...]recently, Nigeria has been able to exercise some basic level of control. Since 2009, the government has paid militants to stay out of trouble.
Full text: A band of saboteurs that calls itself the Niger Delta Avengers has been prowling the swamps of Nigeria's petroleum-rich south for four months, bombing pipelines and diving underwater to destroy equipment. The damage has helped tip Africa's biggest economy toward recession, and has cost Nigeria its position as the continent's top oil producer -- a distinction inherited by Angola. The Avengers struck again before dawn on Friday. A group of militants sneaked through marshland to bomb two pipelines, one owned by Royal Dutch Shell PLC and the other owned by Italy's Eni SpA, according to Nigeria's navy. Shell confirmed signs of a spill from one of its pipelines and said it is still evaluating potential damage. Eni confirmed the attack but said it didn't contribute to any new supply disruption. On the group's purported Twitter account, it called the Eni attack part of its promise "that Nigeria Oil production will be Zero." The brazen strikes were the latest demonstration of destructive proficiency by the Avengers, which has considerably cut the amount of oil in global markets. The strikes have led Nigeria to shift some of the forces who have been fighting an Islamist insurgency. On and off for years, criminal groups in the Niger Delta have extorted and bombed oil companies for profit. Pipelines have also been sawed open by oil thieves, seeking to siphon off their valuable content. The Avengers seem to be more interested in undermining the administration of President Muhammadu Buhari, security consultants and government officials say. They say they are frustrated by the lack of information about who the Avengers are. Mr. Buhari, a former military dictator from Nigeria's north who was elected last year, is unpopular in much of the country's south: He received just 13% of the vote in the Niger Delta. "It is different this time," said Dolapo Oni, oil and gas analyst for Togo-based Ecobank Transnational Inc. "These guys are not stealing crude. They just bomb the pipelines and they run away. They just want to destroy." With near-weekly attacks that began in February, the militants have taken about one million barrels of oil a day out of production, according to Nigerian oil officials. The attacks have intensified in recent weeks. The lost production helped push crude prices above $50 a barrel recently for the first time since November. Roughly 96 million barrels of crude are produced globally every day, but supply exceeded demand by around 1.4 million barrels a day in the first quarter, according to the International Energy Agency, which monitors energy trends for industrialized countries, so the lost Nigerian production is almost as large as the excess daily output that has weighed down prices. "It is clearly having a material impact," said James Davis, head of oil supply at consultancy Facts Global Energy. A few months ago, oil prices lingered at a 13-year-low. Goldman Sachs Group Inc. analysts predicted late last year that oil could fall as low as $20 a barrel. Instead, a series of disruptions -- including a worker's strike in Kuwait, a blockade in Libya, and wildfires in Canada -- have pushed prices up. Nigeria's government has publicly asked the Avengers to negotiate: "This government is a listening government," said Lai Mohammed, Nigeria's information minister. The Avengers have responded with a mix of threats, steep demands -- such as redistribution of oil rights to local residents -- and more attacks. The group has sabotaged at least 10 oil installations in the past month. It didn't respond to several emailed requests for an interview. "To the International Oil Companies and Indigenous Oil Companies, it's going to be bloody," the Avengers said in an online statement. "Your facilities and personnel will bear the brunt of our fury." Since the 1990s, Nigeria's government has been at odds with the residents of the Niger Delta, the Portugal-sized swamp where almost all of the country's oil lies. Decades of oil spills and a prevailing sentiment that the country's vast petroleum wealth has enriched only a few have pushed locals to bomb pipelines, kidnap oil workers, and steal oil. But until recently, Nigeria has been able to exercise some basic level of control. Since 2009, the government has paid militants to stay out of trouble. It has also hired thousands of militants to protect the pipelines they used to bomb and hacksaw open. The attacks come at a perilous moment for the nation of 187 million. Even before the Avengers arrived on the scene, Nigeria's government was running low on money. The country's reserves have plummeted so precipitously that the central bank has rationed access to foreign currency since last year, forcing businesses to shut down because they can't get the dollars they need to import spare parts or repay foreign lenders. The economy contracted by 0.36% in the first three months of this year. It is now headed into an "imminent" recession, Godwin Emefiele, governor of the central bank, said in May. Nigeria's government says it is working as quickly as it can to repair the damage the Avengers have done. To win support, Mr. Buhari has ordered a clean up operation there. Decades of oil spills have left the water so polluted that a United Nations report estimated a full cleanup would take 30 years. The military is also sending more troops into the swamps, even as it battles the insurgency Boko Haram in the north. To secure oil infrastructure, the army recently moved a group of U.S.-trained troops from the front against Boko Haram. It has also used surveillance planes to try to peer into the thick mangrove forests and find the Avengers' camps. "The military will continue to do its best," said Rabe Abubakar, spokesman for Nigeria's Defense Ministry. In May, the military posted troops around one of Chevron Corp.'s oil storage depots. For three days, the Avengers had been vowing to attack it. But instead of storming the depot, the militants bombed a nearby gas pipeline. Hours later, the militants bombed a pair of crude pipelines supplying nearby refineries. "They knew exactly where to attack and the time to attack," said Mr. Oni, the oil analyst. "There was literally nothing you could do." --- Gbenga Akingbule in Abuja, Nigeria, contributed to this article. Credit: Drew Hinshaw, Sarah Kent
Subject: Petroleum production; Pipelines; Explosions
Location: Niger Delta Nigeria
People: Buhari, Muhammadu
Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Classification: 9177: Africa; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2016
Publication date: Jun 6, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793868691
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793868691?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Hercules Offshore Returns to Chapter 11 Bankruptcy; Oil-driller plans to shut down operations as a buyer fails to emerge
Author: Brickley, Peg
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 June 2016: n/a.
Abstract:
In the second bankruptcy, the company intends to monetize its "assets in a controlled manner through an orderly disposition," according to a statement from chief financial officer Troy Carson, filed in the U.S. Bankruptcy Court in Wilmington, Del. Hercules began marketing itself not long after emerging from chapter 11 late last year, under pressure in a shrinking market for oil drilling and services.
Full text: Hercules Offshore Inc. has returned to bankruptcy protection, planning to sell off its assets and shut down just months after a balance sheet reshaping that was supposed to save the business. The long decline in oil prices pushed the Houston oil-and-gas driller back into chapter 11 bankruptcy protection Sunday. The bankruptcy filing followed an announcement in May that efforts to find a buyer didn't pan out. In the second bankruptcy, the company intends to monetize its "assets in a controlled manner through an orderly disposition," according to a statement from chief financial officer Troy Carson, filed in the U.S. Bankruptcy Court in Wilmington, Del. Hercules began marketing itself not long after emerging from chapter 11 late last year, under pressure in a shrinking market for oil drilling and services. The sale-and-shut-down plan has the support of almost all the top lenders that helped it out of bankruptcy in November, according to court papers. A voting report says Hercules received "yes" votes from investors holding more than $249 million in first-lien loans. Hercules is courting the support of holders of its common stock, promising a "meaningful recovery" if they agree to go along with the new plan, The company's stock was created in the previous bankruptcy, when bondholders agreed to take equity in lieu of collecting their debts. Shareholders are being offered between $12.5 million and $41 million, depending on how Hercules's sales go, if they vote to support the bankruptcy wind-down plan, court papers say. A "no" vote from shareholders will result in a recovery ranging from nothing to $27 million, court papers say. Hercules's marketing efforts this year failed to produce a deal that would have been better for creditors than shutting down the business and selling assets to cover the bills, the company said. It was able to sign an agreement to sell its newest jack-up rig, formerly named Hercules Highlander, to a subsidiary of Maersk Drilling. Hercules operates a fleet of 25 self-elevating, mobile offshore drilling units, or "jackup rigs" and 19 self-elevating, self-propelled "liftboat" vessels designed to get oil and gas out of shallow waters. Hercules said its international subsidiaries wouldn't be included in the U.S. bankruptcy, but they would be part of the final sale process. The previous bankruptcy called for bondholders to swap $1.2 billion in debt for control of the company. It was a "prepackaged" workout, one that had the support of most senior creditors at the start of the chapter 11 proceeding. Write to Peg Brickley at peg.brickley@wsj.com Credit: By Peg Brickley
Subject: Bankruptcy reorganization; Bankruptcy; Stockholders
Company / organization: Name: Hercules Offshore Corp; NAICS: 213112; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 6, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1793894133
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1793894133?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Millions of New Vehicles in India Give Oil Prices a Lift; The latest rebound in oil prices is getting help from an unexpected source: surging demand from Asia's emerging economies
Author: Strumpf, Dan; Sparshott, Jeffrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 June 2016: n/a.
Abstract:
The latest rebound in oil prices is getting help from an unexpected source: surging demand from Asia's emerging economies. [...]U.S. gasoline consumption is expected to jump 1.7% to more than 9.3 million barrels a day this year, the highest annual average on record, according to the government's Energy Information Administration.
Full text: The latest rebound in oil prices is getting help from an unexpected source: surging demand from Asia's emerging economies. That surge is helping offset slower growth in developed countries and giving more potency to the effect of a recent string of outages that have curbed supply. India, especially, is helping to up the slack from struggling economies, whose lackluster growth has contributed to oil prices' long slide. The durability of India's demand could be a big factor in whether oil's recent run to a six-month high over $50 a barrel can be sustained. "The big news in demand is growth in India, which now rivals China," said Daniel Yergin, vice chairman of consulting firm IHS. "India really is seen as the growth market for oil." India is fueling a rapid economic expansion, with consumption hitting a record 4.35 million barrels of refined fuels a day during the first three months of the year, according to the International Energy Agency. That is up more than 10% from a year earlier and a big pickup from 2015's pace. India's oil demand in the first quarter grew more rapidly than China's for the first time in nearly four years. The IEA estimates Indian refined-product demand grew by 400,000 barrels a day in the first quarter, compared with 353,000 barrels a day for China. Much of it is heading straight into Indian consumers' gas tanks as a driving culture expands. Government data show gasoline demand grew by 14.5% in the 12 months through March. Demand for diesel, which accounts for more than 40% of all the refined fuels consumed by Indians, grew by 7.5%. Economic development has been a priority for the government of Prime Minister Narendra Modi. The Indian economy grew at a 7.6% clip in the year ended this March according to government data, and the country's finance ministry has projected growth of between 7% and 7.75% in the current fiscal year. Questions have been raised about the accuracy of the country's growth numbers, but demand for vehicles is clear. In the latest fiscal year, the country built 24 million new vehicles and sales of new passenger vehicles rose 7.2%, according to the Society of Indian Automobile Manufacturers. The Modi government is encouraging the trend with a commitment to build 30 kilometers of new roads a day. The trend has been a boon to India's refining industry. Indian Oil Corp., the state-owned Indian refiner that owns 11 of India's 23 refineries, has its facilities running at nearly 100% capacity to meet demand, said the company's Chairman Balasubramanian Ashok. The company in February opened a new refinery in the eastern city of Paradip that will eventually process another 300,000 barrels of crude daily. "It shows that a lot of people are buying automobiles," Mr. Ashok said in an interview. "The economic growth story is a large contributor." One side-effect of higher demand, Mr. Ashok said, is that his company increasingly has to dip into the spot market, as its needs exceed the supply it has locked up in longer-term contracts. Currently, the company sources about 20% of its supply from the spot market, he said, a figure that has grown over the past few years. Driving also is up in the U.S., the world's largest oil market. Americans have responded to low fuel prices with purchases of bigger vehicles and more miles on the road. Driving miles hit a record in 2015, and growth has since accelerated, according to Federal Highway Administration figures. As a result, U.S. gasoline consumption is expected to jump 1.7% to more than 9.3 million barrels a day this year, the highest annual average on record, according to the government's Energy Information Administration. Still, overall U.S. fuel consumption--including jet fuel, diesel and home heating oil--peaked in 2005, and demand in Europe and Japan has been weak. China, like India, is bringing in lots of oil. Its statistics bureau says imports are up 12% so far this year. Together with India, it accounted for more than half of global demand growth in the first quarter. Yet the picture for oil demand isn't as clear-cut in China. There have been signs for many months that a healthy portion of China's imports aren't actually being used by Chinese consumers. Instead, much of it is being stashed away as the country expands its strategic reserves. China intends to build at least 500 million barrels worth of reserve space by 2020 according to the EIA, and many analysts believe the country's pace of hoarding has risen as oil prices have fallen. The government also recently relaxed longstanding import restrictions on China's many small, independent refiners known as "teapots." The looser rules have juiced China's import numbers, but much of the fuel churned out by the teapots is being spewed into the regional export market, not consumed at home. "With regard to these very strong imports, we're still seeing a lot of stock building in China rather than the strong oil imports being transformed straightaway into products to satisfy local demand," said Andrew Wilson, an analyst with the IEA. The pace of actual demand growth in China has slowed considerably, rising 3% in the first quarter after logging quarterly growth of more than 5% for much of last year, according to the IEA. Credit: By Dan Strumpf and Jeffrey Sparshott
Subject: Gasoline prices; Economic growth; Supply & demand; Consumption
Location: Asia India China
People: Modi, Narendra
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 6, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794020168
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794020168?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
24 Million New Vehicles in India Give Oil Prices a Lift; The latest rebound in oil prices is getting help from an unexpected source: surging demand from Asia's emerging economies
Author: Strumpf, Dan; Sparshott, Jeffrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
The latest rebound in oil prices is getting help from an unexpected source: surging demand from Asia's emerging economies. [...]U.S. gasoline consumption is expected to jump 1.7% to more than 9.3 million barrels a day this year, the highest annual average on record, according to the government's Energy Information Administration.
Full text: The latest rebound in oil prices is getting help from an unexpected source: surging demand from Asia's emerging economies. That surge is helping offset slower growth in developed countries and giving more potency to the effect of a recent string of outages that have curbed supply. India, especially, is helping to up the slack from struggling economies, whose lackluster growth has contributed to oil prices' long slide. The durability of India's demand could be a big factor in whether oil's recent run to a six-month high over $50 a barrel can be sustained. "The big news in demand is growth in India, which now rivals China," said Daniel Yergin, vice chairman of consulting firm IHS. "India really is seen as the growth market for oil." India is fueling a rapid economic expansion, with consumption hitting a record 4.35 million barrels of refined fuels a day during the first three months of the year, according to the International Energy Agency. That is up more than 10% from a year earlier and a big pickup from 2015's pace. India's oil demand in the first quarter grew more rapidly than China's for the first time in nearly four years. The IEA estimates Indian refined-product demand grew by 400,000 barrels a day in the first quarter, compared with 353,000 barrels a day for China. Much of it is heading straight into Indian consumers' gas tanks as a driving culture expands. Government data show gasoline demand grew by 14.5% in the 12 months through March. Demand for diesel, which accounts for more than 40% of all the refined fuels consumed by Indians, grew by 7.5%. Economic development has been a priority for the government of Prime Minister Narendra Modi. The Indian economy grew at a 7.6% clip in the year ended this March according to government data, and the country's finance ministry has projected growth of between 7% and 7.75% in the current fiscal year. Questions have been raised about the accuracy of the country's growth numbers, but demand for vehicles is clear. In the latest fiscal year, the country built 24 million new vehicles and sales of new passenger vehicles rose 7.2%, according to the Society of Indian Automobile Manufacturers. The Modi government is encouraging the trend with a commitment to build 30 kilometers of new roads a day. The trend has been a boon to India's refining industry. Indian Oil Corp., the state-owned Indian refiner that owns 11 of India's 23 refineries, has its facilities running at nearly 100% capacity to meet demand, said the company's Chairman Balasubramanian Ashok. The company in February opened a new refinery in the eastern city of Paradip that will eventually process another 300,000 barrels of crude daily. "It shows that a lot of people are buying automobiles," Mr. Ashok said in an interview. "The economic growth story is a large contributor." One side-effect of higher demand, Mr. Ashok said, is that his company increasingly has to dip into the spot market, as its needs exceed the supply it has locked up in longer-term contracts. Currently, the company sources about 20% of its supply from the spot market, he said, a figure that has grown over the past few years. Driving also is up in the U.S., the world's largest oil market. Americans have responded to low fuel prices with purchases of bigger vehicles and more miles on the road. Driving miles hit a record in 2015, and growth has since accelerated, according to Federal Highway Administration figures. As a result, U.S. gasoline consumption is expected to jump 1.7% to more than 9.3 million barrels a day this year, the highest annual average on record, according to the government's Energy Information Administration. Still, overall U.S. fuel consumption--including jet fuel, diesel and home heating oil--peaked in 2005, and demand in Europe and Japan has been weak. China, like India, is bringing in lots of oil. Its statistics bureau says imports are up 12% so far this year. Together with India, it accounted for more than half of global demand growth in the first quarter. Yet the picture for oil demand isn't as clear-cut in China. There have been signs for many months that a healthy portion of China's imports aren't actually being used by Chinese consumers. Instead, much of it is being stashed away as the country expands its strategic reserves. China intends to build at least 500 million barrels worth of reserve space by 2020 according to the EIA, and many analysts believe the country's pace of hoarding has risen as oil prices have fallen. The government also recently relaxed longstanding import restrictions on China's many small, independent refiners known as "teapots." The looser rules have juiced China's import numbers, but much of the fuel churned out by the teapots is being spewed into the regional export market, not consumed at home. "With regard to these very strong imports, we're still seeing a lot of stock building in China rather than the strong oil imports being transformed straightaway into products to satisfy local demand," said Andrew Wilson, an analyst with the IEA. The pace of actual demand growth in China has slowed considerably, rising 3% in the first quarter after logging quarterly growth of more than 5% for much of last year, according to the IEA. Write to Dan Strumpf at daniel.strumpf@wsj.com and Jeffrey Sparshott at jeffrey.sparshott@wsj.com Corrections & Amplifications: An earlier version of a chart accompanying this article incorrectly said changes in refined-fuel demand for China and India were measured in billion barrels a day. They are measured in million barrels a day. (June 7.) Credit: By Dan Strumpf and Jeffrey Sparshott
Subject: Gasoline prices; Economic growth; Supply & demand; Consumption
Location: Asia India China
People: Modi, Narendra
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794024700
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794024700?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
What Is Lifting Prices For Oil? Try Asia
Author: Strumpf, Dan; Sparshott, Jeffrey
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 June 2016: C.1.
Abstract:
The latest rebound in oil prices is getting help from an unexpected source: surging demand from Asia's emerging economies. [...]U.S. gasoline consumption is expected to jump 1.7% to more than 9.3 million barrels a day this year, the highest annual average on record, according to the government's Energy Information Administration.
Full text: The latest rebound in oil prices is getting help from an unexpected source: surging demand from Asia's emerging economies. That surge is helping offset slower growth in developed countries and giving more potency to the effect of a recent string of outages that have curbed supply. India, especially, is helping to up the slack from struggling economies, whose lackluster growth has contributed to oil prices' long slide. The durability of India's demand could be a big factor in whether oil's recent run to a six-month high over $50 a barrel can be sustained. "The big news in demand is growth in India, which now rivals China," said Daniel Yergin, vice chairman of consulting firm IHS. "India really is seen as the growth market for oil." India is fueling a rapid economic expansion, with consumption hitting a record 4.35 million barrels of refined fuels a day during the first three months of the year, according to the International Energy Agency. That is up more than 10% from a year earlier and a big pickup from 2015's pace. India's oil demand in the first quarter grew more rapidly than China's for the first time in nearly four years. The IEA estimates Indian refined-product demand grew by 400,000 barrels a day in the first quarter, compared with 353,000 barrels a day for China. Much of it is heading straight into Indian consumers' gas tanks as a driving culture expands. Government data show gasoline demand grew by 14.5% in the 12 months through March. Demand for diesel, which accounts for more than 40% of all the refined fuels consumed by Indians, grew by 7.5%. Economic development has been a priority for the government of Prime Minister Narendra Modi. The Indian economy grew at a 7.6% clip in the year ended this March according to government data, and the country's finance ministry has projected growth of between 7% and 7.75% in the current fiscal year. Questions have been raised about the accuracy of the country's growth numbers, but demand for vehicles is clear. In the latest fiscal year, the country built 24 million new vehicles and sales of new passenger vehicles rose 7.2%, according to the Society of Indian Automobile Manufacturers. The Modi government is encouraging the trend with a commitment to build 30 kilometers of new roads a day. The trend has been a boon to India's refining industry. Indian Oil Corp., the state-owned Indian refiner that owns 11 of India's 23 refineries, has its facilities running at nearly 100% capacity to meet demand, said the company's Chairman Balasubramanian Ashok. The company in February opened a new refinery in the eastern city of Paradip that will eventually process another 300,000 barrels of crude daily. "It shows that a lot of people are buying automobiles," Mr. Ashok said in an interview. "The economic growth story is a large contributor." One side-effect of higher demand, Mr. Ashok said, is that his company increasingly has to dip into the spot market, as its needs exceed the supply it has locked up in longer-term contracts. Currently, the company sources about 20% of its supply from the spot market, he said, a figure that has grown over the past few years. Driving also is up in the U.S., the world's largest oil market. Americans have responded to low fuel prices with purchases of bigger vehicles and more miles on the road. Driving miles hit a record in 2015, and growth has since accelerated, according to Federal Highway Administration figures. As a result, U.S. gasoline consumption is expected to jump 1.7% to more than 9.3 million barrels a day this year, the highest annual average on record, according to the government's Energy Information Administration. Still, overall U.S. fuel consumption -- including jet fuel, diesel and home heating oil -- peaked in 2005, and demand in Europe and Japan has been weak. China, like India, is bringing in lots of oil. Its statistics bureau says imports are up 12% so far this year. Together with India, it accounted for more than half of global demand growth in the first quarter. Yet the picture for oil demand isn't as clear-cut in China. There have been signs for many months that a healthy portion of China's imports aren't actually being used by Chinese consumers. Instead, much of it is being stashed away as the country expands its strategic reserves. China intends to build at least 500 million barrels worth of reserve space by 2020 according to the EIA, and many analysts believe the country's pace of hoarding has risen as oil prices have fallen. The government also recently relaxed longstanding import restrictions on China's many small, independent refiners known as "teapots." The looser rules have juiced China's import numbers, but much of the fuel churned out by the teapots is being spewed into the regional export market, not consumed at home. "With regard to these very strong imports, we're still seeing a lot of stock building in China rather than the strong oil imports being transformed straightaway into products to satisfy local demand," said Andrew Wilson, an analyst with the IEA. The pace of actual demand growth in China has slowed considerably, rising 3% in the first quarter after logging quarterly growth of more than 5% for much of last year, according to the IEA. Credit: By Dan Strumpf and Jeffrey Sparshott
Subject: Gasoline prices; Economic growth; Supply & demand; Energy consumption; Crude oil prices
Location: Asia China India
People: Modi, Narendra
Classification: 8510: Petroleum industry; 9179: Asia & the Pacific
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Jun 7, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794079237
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794079237?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: Hercules Back in Bankruptcy --- Oil-and-gas driller plans to sell assets and shut down after efforts to find buyer fall through
Author: Brickley, Peg
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 June 2016: B.3.
Abstract:
In the second bankruptcy, the company intends to monetize its "assets in a controlled manner through an orderly disposition," according to a statement from Chief Financial Officer Troy Carson, filed in the U.S. Bankruptcy Court in Wilmington, Del. Hercules began marketing itself not long after emerging from chapter 11 late last year, under pressure in a shrinking market for oil drilling and services.
Full text: Hercules Offshore Inc. has returned to bankruptcy protection, planning to sell off its assets and shut down just months after a balance sheet reshaping that was supposed to save the business. The long decline in oil prices pushed the Houston oil-and-gas driller back into chapter 11 bankruptcy protection Sunday. The bankruptcy filing followed an announcement in May that efforts to find a buyer didn't pan out. In the second bankruptcy, the company intends to monetize its "assets in a controlled manner through an orderly disposition," according to a statement from Chief Financial Officer Troy Carson, filed in the U.S. Bankruptcy Court in Wilmington, Del. Hercules began marketing itself not long after emerging from chapter 11 late last year, under pressure in a shrinking market for oil drilling and services. The sale-and-shut-down plan has the support of almost all the top lenders that helped it out of bankruptcy in November, according to court papers. A voting report says Hercules received "yes" votes from investors holding more than $249 million in first-lien loans. Hercules is courting the support of holders of its common stock, promising a "meaningful recovery" if they agree to go along with the new plan. The company's stock was created in the previous bankruptcy, when bondholders agreed to take equity in lieu of collecting their debts. Shareholders are being offered between $12.5 million and $41 million, depending on how Hercules's sales go, if they vote to support the bankruptcy wind-down plan, court papers say. A "no" vote from shareholders will result in a recovery ranging from nothing to $27 million, court papers say. Hercules's marketing efforts this year failed to produce a deal that would have been better for creditors than shutting down the business and selling assets to cover the bills, the company said. It was able to sign an agreement to sell its newest jack-up rig, formerly named Hercules Highlander, to a subsidiary of Maersk Drilling. Hercules operates a fleet of 25 self-elevating, mobile offshore drilling units, or "jackup rigs" and 19 self-elevating, self-propelled "liftboat" vessels designed to get oil and gas out of shallow waters. Hercules said its international subsidiaries wouldn't be included in the U.S. bankruptcy, but they would be part of the final sale process. The previous bankruptcy called for bondholders to swap $1.2 billion in debt for control of the company. It was a "prepackaged" workout, one that had the support of most senior creditors at the start of the chapter 11 proceeding. --- Anne Steele contributed to this article. Credit: By Peg Brickley
Subject: Petroleum industry; Bankruptcy reorganization
Company / organization: Name: Hercules Offshore Corp; NAICS: 213112
Classification: 8510: Petroleum industry; 3100: Capital & debt management; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Jun 7, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794080272
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794080272?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shell Planning Fresh Spending Cuts In Wake Of BG Deal; The oil company is under pressure to reduce its net debt pile which has risen to near $70 billion
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
The CEO staked his reputation on the deal, which he intended to bolster Shell's focus on liquefied natural gas--a fast-growing market as some countries are attempting to replace coal with gas--and deep water oil projects.
Full text: LONDON--Royal Dutch Shell PLC said Tuesday it is planning new spending cuts to keep up its dividend payments after spending about $50 billion to buy rival BG Group PLC during the depths of an oil-price rout. In the combined company's first strategy presentation, Chief Executive Ben van Beurden raised the Anglo-Dutch oil giant's estimate for the cost savings achievable through the integration of BG. Mr. Van Beurden also cut Shell's planned investment in big new projects through the end of the decade and reiterated the company's intention to sell some properties in a plan to "reshape Shell into a more focused and more resilient company." The emphasis on cost-cuts--which comes after several rounds of layoffs over the past year--highlights Shell's caution over a potential oil-price recovery. RELATED ARTICLES * Shell Targets Spending as Profit Plunges 83% (5/4/16) * Shell Outlines BG Consolidation Plans (4/25/16) * Shell Cuts Chief Executive's Pay After Oil Glut Slashes Profit (3/10/16) After trading at more than $100 a barrel in 2014, a global oil glut drove prices down to about $27 a barrel in January. Shell and other big oil companies responded by slashing staff and delaying or canceling big projects. The oil price has since recovered to around $50 a barrel , but Shell is continuing to advertise a frugal outlook to investors--what Mr. van Beurden on Tuesday called a "lower forever mind-set." Mr. Van Beurden said Shell will achieve pretax cost savings of $4.5 billion in 2018 as a result of the merger with BG, up from its previous target of $3.5 billion. Shell also lowered its planned capital investment for this year by $1 billion to $29 billion. From 2017 to the end of the decade the company will keep its capital spending in a range of $25 billion to $30 billion a year, the CEO said, and possibly lower if oil prices don't go up much. He did say that Shell plans to continue investing in deep water oil projects--an expensive but potentially lucrative area. Mr. Van Beurden is under pressure to reduce Shell's net debt, which grew to nearly $70 billion after the BG acquisition . The CEO staked his reputation on the deal, which he intended to bolster Shell's focus on liquefied natural gas--a fast-growing market as some countries are attempting to replace coal with gas--and deep water oil projects. But some investors have panned the deal as a lavish buy during a period of low oil prices. Standard Life Investments voted against the transaction, saying it would decrease Shell's value because of the risk of lower oil prices and tax and operational risks surrounding BG's Brazilian oil fields. Shell said in the strategy update that it would reduce investments in its integrated gas division, which includes the liquefied gas operations, and focus on deep water oil fields such as those in Brazil, which were acquired in the BG merger, and the Gulf of Mexico. Shell said its daily deep water oil production could double from 2015 levels to around 900,000 barrels of oil and equivalent natural gas volumes in 2020. In addition to deep water crude, Mr. van Beurden, a veteran of Shell's petrochemical operations, said new chemicals facilities are a growth priority. He said Shell had decided to move ahead with a multibillion-dollar plan to build a major plant near Pittsburgh that will use gas from nearby shale fields as its feedstock. The company didn't give an investment figure for the plant. Construction will start in around 18 months, with startup slated early next decade, the company said. It has also invested recently in expanding a Louisiana plant and adding to a petrochemical complex in China. Pouring more money into chemicals now "strengthens our competitive advantage," said Graham van't Hoff, Shell's executive vice president for global chemicals. Beyond 2020, Shell said it would focus on developing shale production in North America and Argentina and low-carbon energy such as biofuels, solar and wind power. Rory Gallivan contributed to this article. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Subject: Acquisitions & mergers; Corporate profits; Prices; Capital expenditures; Cost control; Natural gas; Petroleum production
People: van Beurden, Ben
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Standard Life Investments; NAICS: 525990; Name: BG Group PLC; NAICS: 486210, 211111, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794085302
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794085302?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks Inch Closer to Record High, Supported by Oil Prices; Investors' belief that Fed will take cautious approach to raising rates is helping to spur rally
Author: Gold, Riva; Kuriloff, Aaron
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
Many investors drew reassurance from a speech by U.S. Federal Reserve Chairwoman Janet Yellen on Monday, in which she said Fed officials expect the economy to improve but won't raise interest rates until new uncertainties about the economic outlook are resolved.
Full text: The S&P 500 crept closer to its record high Tuesday, lifted by oil's return to $50 a barrel and renewed confidence that U.S. interest rates will stay low. The gains briefly boosted the Dow industrials above 18000 for the first time in more than a month and the S&P 500 closed within 0.9% of its record, spurred by energy shares that have climbed with the price of oil in recent months. Today's Highlights * Goldman Probed Over Malaysia Fund 1MDB * Mutual-Fund Directors Are Staying On Boards for Decades. Is That a Bad Thing? * Malls Embrace High-Tech to Entice Shoppers Stocks pared gains late in the session. The Dow Jones Industrial Average rose 17.95 points, or 0.1%, to 17938.28, its highest close since April 27. The S&P 500 climbed 2.72 points, or 0.1%, to 2112.13, its highest close since July 22. The Nasdaq Composite Index fell 6.96 points, or 0.1%, to 4961.75 and is still down so far in 2016. Crude oil extended gains as the dollar weakened and production outages curbed supply. U.S. crude rose 1.3% to $50.36 a barrel, settling above $50 for the first time since July. Prices have nearly doubled since hitting 13-year lows earlier in 2016 as companies have cut spending on new drilling and unplanned outages in Nigeria and Canada helped shrink the global oil glut. U.S. crude production fell by 250,000 barrels a day in May from April, the largest one-month decline in years, the Energy Information Administration said Tuesday in its short-term energy outlook. Energy shares in the S&P 500 added 2.1%. EOG Resources climbed $4.15, or 5.1% to $85.42 and Concho Resources gained 5.75, or 4.8%, to 126.26. Chevron and Exxon Mobil were among the biggest gainers in the Dow industrials. The energy sector's earnings have declined for six consecutive quarters year-over-year, according to FactSet, so oil's price gains could brighten the outlook for some of those companies. Energy shares in the S&P 500 have rallied 11% in the past three months. "Oil has continued to strengthen, giving people comfort that at some point we can see a recovery in S&P 500 earnings," said Doug Foreman, chief investment officer at Kayne Anderson Rudnick Investment Management. "Areas like energy, industrial materials and a lot of commodities--which had been decimated--are coming out of a depression, and that change alone is very, very positive for the overall marketplace," he said. U.S. government bond yields fell as concerns about rising rates faded. The yield on the benchmark 10-year Treasury note was 1.713% compared with 1.723% Monday. Yields fall as bond prices rise. Many investors drew reassurance from a speech by U.S. Federal Reserve Chairwoman Janet Yellen on Monday, in which she said Fed officials expect the economy to improve but won't raise interest rates until new uncertainties about the economic outlook are resolved. "We think they're going to move very, very slowly," said Monica Defend, head of global asset allocation research at Pioneer Investments. Friday's weaker-than-expected jobs report sharply reduced expectations for a rate rise at the Fed's June and July meetings. The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, fell 0.4%. The dollar tends to benefit from higher interest rates. "Every data point is really being dissected," said Chris Dyer, director of global equity at Eaton Vance. "Consumer strength has been a real engine of growth in the U.S. economy, and this [jobs report] raises a little bit of a red flag," he said. The Stoxx Europe 600 rose 1.1%, led by energy companies. Japan's Nikkei Stock Average added 0.6%, while Hong Kong's Hang Seng Index gained 1.4%. Nicole Friedman contributed to this article. In the Markets * U.S. Oil Settles Above $50 for First Time Since July * Dollar Falls to One-Month Low * Volatile Pound Underscores Market Jitters Over 'Brexit' Vote * Treasury Yields Fall on Fed Outlook * Gold Pares Losses as Rate Outlook Shifts * Asia Stocks Rise on Higher Commodity Prices Write to Riva Gold at riva.gold@wsj.com and Aaron Kuriloff at aaron.kuriloff@wsj.com Credit: By Riva Gold and Aaron Kuriloff
Subject: Interest rates; Dow Jones averages; Stock exchanges; Investments; Energy industry
Location: United States--US Malaysia
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794085329
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794085329?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Iranian Oil, Shipping Companies Set $2.4 Billion in Ship Deals; The preliminary agreements mark Iran's efforts to make a comeback in global shipping
Author: Paris, Costas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
Iranian Offshore Oil Co., a subsidiary of state oil giant National Iranian Oil Co., is in advanced talks for firm orders of at least five jack-up rigs with Daewoo Shipbuilding & Marine Engineering Co. at roughly $205 million each, the second person said.
Full text: ATHENS--Islamic Republic of Iran Shipping Lines and Iranian Offshore Oil Co. have reached preliminary deals with South Korean shipyards for orders valued at roughly $2.4 billion, people involved in the talks said Tuesday. The agreements are part of Iran's efforts to make a comeback in global shipping after the lifting of international sanctions earlier this year, but completing the orders will depend on financing that the Iranians haven't yet secured, the people said. "The yards are making slots available to the Iranians starting in 2018 and 2019," one of the people said. "The Iranians are trying to make the 20% down payments through oil state-to-state deals to finalize the orders." If the oil deals work out with the South Korean government, Seoul can then give the necessary guarantees for the down payment to the yards. A second person said other options for down payments are being discussed and that he expects the orders to be completed by the end of the summer. Islamic Republic of Iran Shipping Lines, known as IRISL, operates a fleet of container vessels, bulk carriers and tankers. It has signed a memorandum of understanding with Hyundai Mipo Dockyard, a subsidiary of shipbuilding company Hyundai Heavy Industries Group, for as many as 10 petroleum-product tankers and at least six so-called handysize bulk carriers. Product tankers cost about $30 million each and handysize bulkers about $20 million apiece. IRISL also is in talks with Hyundai Heavy for as many as six, 14,500-container ships, the people involved in the talks said. China's Dalian Shipbuilding Industry Co. is in the race for the order as well, the people said. IRISL operates about 115 oceangoing vessels, with a total capacity of 3.3 million deadweight tons. But a number of the ships are old, have been declassified--or deemed unsafe to travel--and can't be insured. "As they modernize their fleet, the Iranians are chartering vessels from Greek and other owners to move cargo," a third person said. "Chartering will continue to be a big part of their operations for at least another three years." Iranian Offshore Oil Co., a subsidiary of state oil giant National Iranian Oil Co., is in advanced talks for firm orders of at least five jack-up rigs with Daewoo Shipbuilding & Marine Engineering Co. at roughly $205 million each, the second person said. "There is a [memorandum of understanding] in the works with DSME, but IOOC is also looking at other yards," the person said. "Rig orders are rare these days as oil prices are low and offshore drilling is expensive, so there will be a race among major yards for the order." Senior South Korean and Chinese yard officials have visited Tehran in recent months to secure shipping deals, the first person said, as international orders are drying up on a glut of tonnage in the water and anemic global economic growth. Write to Costas Paris at costas.paris@wsj.com Credit: By Costas Paris
Subject: Down payments; Shipbuilding; Offshore
Location: Iran
Company / organization: Name: National Iranian Oil Co; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794091124
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794091124?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi Arabia Approves Plan to Diversify Economy; Kingdom's National Transformation Program aims to reduce oil dependency, cut government subsidies
Author: Ahmed Al Omran; Margherita Stancati; Ahmed Al Omran; Stancati, Margherita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
The shift away from fossil fuel presents a formidable challenge to the ruling monarchy, which has long relied on oil revenue to provide its citizens with generous welfare benefits and cushy government jobs .
Full text: Saudi Arabia unveiled plans to more than triple its nonoil revenue by 2020 while cutting state handouts, in a broad bid to reshape the kingdom's economy amid falling energy prices. The initiative, called the National Transformation Program, offers details on how the ruling monarchy plans to achieve long-term economic change in an era of cheap oil. The overall target is ambitious: Riyadh expects nonoil revenue to more than triple by 2020 to 530 billion Saudi riyals ($141.33 billion). The changes, focused on generating revenue from sources other than oil, aim to revamp the country's economy by rolling back the role of the state. Developing industries like mining and tourism and the creation of some 450,000 private-sector jobs by 2020 are part of the NTP, which will cost around 270 billion riyals to implement in its initial five-year phase. But so are more painful measures, such as the introduction of indirect taxation, and the reduction of subsidies on water and electricity, which the government said could provide savings of as much as 200 billion riyals by 2020. The government also plans to cut the amount of money it spends on public wages from 45% of the budget to 40%. A prolonged period of cheap oil has made diversifying the economy a priority for the government. Efforts to reduce oil dependence have been tried before with little success, but some analysts have said the new urgency means there is greater political will to support the current plan. "It's a challenging exercise, but they have to do it," said John Sfakianakis, a former economic adviser to the Saudi government and the Riyadh-based director of research for the Gulf Research Center. "At stake is stability, the country's greater social and political stability." The kingdom's Council for Economic and Development Affairs, a body headed by Crown Prince Mohammed bin Salman, drafted the plan, dubbed NTP. It is a key part of a road map for long-term economic change known as Vision 2030 , which was unveiled by the prince in April. The vision also includes plans to sell under 5% of state-owned oil giant Saudi Arabia Oil Co. and to transfer ownership of the company, known as Saudi Aramco, to the kingdom's sovereign-wealth fund. The plan sees the country's oil-production capacity maintained at 12.5 million barrels a day until 2020. The Saudi cabinet approved the plan late Monday, following the breaking of the daily fast that marks the Muslim holy month of Ramadan. A total of 24 government entities were involved in preparing the NTP. Top government officials will outline what the NTP means for their respective departments in coming days. The shift away from fossil fuel presents a formidable challenge to the ruling monarchy, which has long relied on oil revenue to provide its citizens with generous welfare benefits and cushy government jobs . Last year, oil revenue accounted for more than 70% of overall government revenue. Two years of low oil prices have strained the kingdom's finances, resulting in a record budget deficit of about $98 billion in 2015. It has also drawn down its foreign-exchange reserves, which fell to about $581 billion at the end of April from a peak of $746 billion in August 2014. The government has taken some steps to address this, issuing domestic bonds, cutting spending and raising the domestic cost of fuel, water and electricity. It borrowed $10 billion from a consortium of global banks in April and could raise as much as $15 billion by selling bonds for the first time to international investors, some bankers said. The kingdom's debt is likely to grow further: The NTP document says the nation's ratio of debt to gross domestic product is expected to widen to 30% by 2020, from 7% today. As part of the plan, Saudi Arabia aims to boost its credit rating to Aa2 by 2020, after several rating agencies downgraded the kingdom in recent months. Moody's Investors Service in May cut Saudi Arabia's long-term issuer ratings to A1 from Aa3. The International Monetary Fund said in May that it expects Saudi economic growth to slow this year as cheap oil continues to weigh on the kingdom's economy, but the IMF also praised the country's efforts to promote changes and reduce its dependence on crude sales. More * Oil Change: Affluent Saudi Arabia Goes to Work (May 31) * Saudi Changes Meet Resistance From Traditional Clerics (May 9) * Saudi Arabia Moves Quickly on Government Shake-Up (May 8) Write to Ahmed Al Omran at Ahmed.AlOmran@wsj.com and Margherita Stancati at margherita.stancati@wsj.com Credit: Ahmed Al Omran, Margherita Stancati
Subject: Production capacity; Cost control
Location: Riyadh Saudi Arabia Saudi Arabia
People: Mohamed bin Salman, Prince of Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794100625
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794100625?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is pr ohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Bernhard Capital Partners Closes Debut Fund at $750 Million; Firm says opportunities come from the amount of oil that needs to be refined, transported and stored
Author: Dai, Shasha
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
Bernhard Capital Partners was founded in 2013 by James "Jim" Bernhard, formerly chairman and chief executive of the Shaw Group Inc., an energy services company that was acquired by Chicago Bridge & Iron Co. in 2013.
Full text: Bernhard Capital Partners Management LP closed its debut fund, BCP Energy Services Fund LP, with more than $750 million in total commitments, hitting the fund's target. The Baton Rouge, La., firm launched fundraising in 2014. Bernhard Capital Partners was founded in 2013 by James "Jim" Bernhard, formerly chairman and chief executive of the Shaw Group Inc., an energy services company that was acquired by Chicago Bridge & Iron Co. in 2013. Bernhard Capital targets energy services companies serving the midstream, downstream and power sectors. It aims to invest $60 million to $150 million of equity at a time, according to a spokeswoman for the firm. The debut fund already has made four investments: engineering and construction company Brown & Root Industrial Services LLC; pipeline manufacturer Epic Piping LLC; environmental consultancy ATC Group Services LLC; and engineering contractor Bernhard LLC, according to the spokeswoman. In a prepared statement, Bernhard Capital said it is attracted to the investment opportunities "due to the abundance of oil and gas in North America that must be refined, transported and stored." Atlantic-Pacific Capital Inc. served as placement agent, and Kirkland & Ellis LLP served as legal counsel for the fund. Write to Shasha Dai at shasha.dai@wsj.com Credit: By Shasha Dai
Subject: Energy management; Electric utilities
Location: Baton Rouge Louisiana
Company / organization: Name: Kirkland & Ellis; NAICS: 541110; Name: Shaw Group Inc; NAICS: 331210, 237130, 237990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794116294
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794116294?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Royal Dutch Shell's High-Wire Act; Anglo-Dutch oil and gas group is doing all it can to balance near-term returns with long-term prospects
Author: Davies, Paul J
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
[...]it has yet another $1 billion in synergies from the BG deal. [...]it reckons it will have achieved most of the $4.5 billion total next year, which suggests a high level of confidence.
Full text: For Royal Dutch Shell, austerity is tricky. The Anglo-Dutch oil and gas group is doing almost everything it can to make its finances work. The trouble for investors is that it still may not be enough. Shell has found more cost savings more quickly from its takeover of BG Group and is slashing its investment plans back to almost the minimum needed to keep producing. But without a recovery in oil and gas prices it will struggle to balance its long-term prospects with near-term promises. Shell made several nips and tucks at its investor day Tuesday. First, it has yet another $1 billion in synergies from the BG deal. Moreover, it reckons it will have achieved most of the $4.5 billion total next year, which suggests a high level of confidence. This won't cut Shell's long-term operating cost base, still forecast to be $40 billion, because those synergies include less exploration investment. But this makes it more likely that the BG deal adds value at the equivalent of a long-term $60-per-barrel oil price. The second pledge was a further cut to annual capital expenditure to between $25 billion and $30 billion between now and 2020, a big drop from Shell and BG's combined $47 billion in 2014. The group needs to spend about $25 billion a year just to maintain production, according to Morgan Stanley. Shell, however, projects that spending $21-26 billion will also allow it to invest in growing its deep-water output, which it expects to double by 2020, and in new chemicals capacity, such as the Pennsylvania complex it approved on Tuesday. Either way, Shell has guaranteed it won't spend more than $30 billion a year until it has cut debt enough to begin its promised $25 billion share buyback, which it would like to start in 2018. Debt reduction depends on large asset sales , which have attracted some investor skepticism. Shell already has up to one-quarter of its promised sales under way--a good start in the current commodity price environment. But that highlights Shell's third promise: that it won't prioritize today's returns at the cost of tomorrow's. If it can't get the right price for assets it is prepared to sell, it would rather delay than give away value. By the same token, it could cap investment spending at $25 billion instead of $30 billion and in effect fund its buyback, but that would forgo adding future cash flows, such as those from chemicals. Shell is walking a very fine line between milking its cash cows and ensuring there is something to replace them. Investors should see the long-term sense in this, but without a rise in oil prices both things become harder. Write to Paul Davies at paul.davies@wsj.com Credit: By Paul J. Davies
Subject: Acquisitions & mergers; Capital expenditures; Cost control; Securities buybacks
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794156778
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794156778?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Field Services Provider Seventy Seven Files for Bankruptcy; Oklahoma City company the latest victim of the downturn in oil and natural gas prices
Author: Fitzgerald, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
The Oklahoma City company, spun off from Chesapeake Energy Corp. in 2014, is the latest victim of the downturn in oil and natural gas prices, which has claimed dozens of companies in the oil patch since the start of last year.
Full text: Oil field services company Seventy Seven Energy Inc. filed for bankruptcy protection Tuesday with a plan to eliminate more than $1 billion in debt and hand control of the business to its bondholders. The Oklahoma City company, spun off from Chesapeake Energy Corp. in 2014, is the latest victim of the downturn in oil and natural gas prices, which has claimed dozens of companies in the oil patch since the start of last year. The company filed for protection in U.S. Bankruptcy Court in Wilmington, Del., with a "prepackaged" chapter 11 plan after garnering support from its creditors to support the restructuring proposal. Such preapproved plans are becoming increasingly popular with companies and investors, who want to minimize the time and expense of chapter 11 balance sheet restructuring. "The successful completion of the solicitation process and today's filing represent the next step forward in our financial restructuring," said Jerry Winchester, the company's chief executive. Under the terms of the previously floated plan, which eliminates $1.1 billion, the company's 2019 unsecured bondholders will receive at least 96.75% equity in the restructured company in exchange for forgiveness of the $650 million they're owed. A second group of bondholders are slated to get a 3.25% equity stake plus warrants for 15% of the new common stock if they vote to support the plan. The company's term-loan lenders will receive a 2% payout of their loan upfront and a better collateral package securing the remaining loan, which will be carried over. The incremental term-loan lenders will be paid at least $15 million upfront, and the remaining $84 million balance of its loan will remain in place. Additionally, current equity holders will receive warrants for 20% of new common stock if all the debtholders vote for the plan. Seventy Seven said its trade creditors, suppliers and contractors will be paid in the ordinary course of business. The company's lenders, led by Wells Fargo, have agreed to provide $100 million in financing to fund the chapter 11 case, which Seventy Seven hopes to have completed within 60 days. Seventy Seven is an oil-field servicer that provides drilling, hydraulic fracturing and oil field rental services to exploration and production companies. The company had cited the shakeout in the oil patch for its need to restructure more than $1.7 billion in debt. It first raised the possibility of bankruptcy in a February regulatory filing after hiring advisers from Lazard to help it restructure its business. The law firm Baker Botts is handling the chapter 11 matter, and the company has hired Alvarez & Marsal as its restructuring adviser. The case number is 16-11409 and Judge Laurie Selber Silverstein has been assigned the case. Stephanie Gleason contributed to this article. Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com Credit: By Patrick Fitzgerald
Subject: Bankruptcy reorganization; Bankruptcy; Equity; Natural gas prices
Location: Oklahoma
Company / organization: Name: Seventy Seven Energy Inc; NAICS: 211111, 213111; Name: Bankruptcy Court-US; NAICS: 922110; Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: Chesapeake Energy Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
Section: ABC
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794167493
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794167493?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Crude-Oil Stockpiles Seen Down in Week; Analysts expect 3.1 million-barrel decline
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 3.6-million-barrel decrease in crude supplies, a 760,000-barrel increase in gasoline stocks and a 270,000-barrel increase in distillate inventories, according to market participants.
Full text: NEW YORK--U.S. crude-oil stocks are expected to decrease in data due Wednesday from the Department of Energy, according to a survey of analysts by The Wall Street Journal. Estimates from 13 analysts surveyed showed that U.S. oil inventories are projected to have fallen by 3.1 million barrels, on average, in the week ended June 3. Twelve analysts expect stockpiles to fall, and one expects no change. Forecasts range from unchanged to a decrease of 6 million barrels. The closely watched survey from the Energy Information Administration is due at 10:30 a.m. ET Wednesday. Gasoline stockpiles are expected to fall by 500,000 barrels, according to analysts. Eight analysts expect a drop, four see a rise and one expects no change. Estimates range from a drop of 2.1 million barrels to an increase of 1.5 million barrels. Stocks of distillates, which include heating oil and diesel, are expected to fall by 300,000 barrels. Seven analysts expect a decline, four see an increase and two expect no change. Forecasts range from a drop of 2.5 million barrels to a gain of 2 million barrels. Refinery use is seen rising 0.6 percentage point to 90.4% of capacity, based on EIA data. Nine analysts expect an increase, while one sees no change and three didn't provide estimates. Forecasts range from unchanged to a gain of 1.0 point. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 3.6-million-barrel decrease in crude supplies, a 760,000-barrel increase in gasoline stocks and a 270,000-barrel increase in distillate inventories, according to market participants. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Inventory; Price increases; Supply & demand
Location: United States--US
Company / organization: Name: Department of Energy; NAICS: 926130; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794175984
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794175984?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
In Natural Disasters, Companies Operate Like Neighbors; Just as Wal-Mart rushed to help during Hurricane Katrina, oil firms leaped into action when wildfires swept Alberta, Canada.
Author: Horwitz, Steven
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
[...]we too easily forget that these firms are part of their communities.
Full text: When one thinks of progressives' long list of capitalist villains, the oil industry is probably near the top. It stands accused of the worst forms of self-interested and antisocial behavior, exploiting workers and consumers alike. What tells a different story is how oil companies behaved during a major natural disaster affecting their employees and customers. For much of May, a huge forest fire devastated the town of Fort McMurray and more than a million acres of land in the Canadian province of Alberta. It chased more than 60,000 people from their homes and destroyed large parts of the city. Horrific videos show people escaping through walls of flame. Most accounts of the disaster didn't note the role of local energy companies in facilitating those escapes and sheltering refugees. When the situation got out of control, the oil firms at the northern end of the fires threw out their security protocols and opened their doors. Tristin Hopper of the National Post gathered the figures : The oil companies provided free food and shelter to over 25,000 people. When the fires cut off easy road access to the small community of Fort McKay First Nation, Brion Energy began trucking in perishable foods daily. Imperial Oil donated 20,000 liters of gasoline to the relief efforts and Shell Albian Aerodrome rounded up evacuees on buses and, along with Suncor's Firebag Aerodrome, evacuated over 7,000 people on company-chartered commercial jets using their private airstrips. "Alberta's oil producers," Mr. Hopper wrote, "effectively turned themselves into multimillion-dollar humanitarian organizations at the drop of a hat." That shouldn't surprise anyone who knows what Wal-Mart did after Hurricane Katrina hit the Gulf Coast in 2005. The company shipped thousands of trucks of water and other supplies into the area, well ahead of the lethargic Federal Emergency Management Agency. It even beat the Red Cross in many areas. The firm reopened most of its stores within 10 days. Wal-Mart also guaranteed employment at other stores for any of its workers who were forced to abandon their homes and jobs along the coast. Wal-Mart's response received praise from numerous local officials. The mayor of the New Orleans suburb of Kenner said that the company had prevented his community from completely collapsing: "The only lifeline in Kenner was the Wal-Mart stores. We didn't have looting on a mass scale because Wal-Mart showed up with food and water so our people could survive." It wasn't the only company that pitched in: Marriott provided its displaced workers with cash, rooms and food at hotels in other cities. McDonald's gave free food to first responders and told its emergency management vice president that he could assume an unlimited budget for tracking down employees and making sure they were safe. Other smaller disasters since Katrina tell similar stories. There are two things to be learned from this consistent pattern of virtuous behavior. First, these firms have experience that makes them distinctly effective during and after disasters. Wal-Mart constantly responds to changing market conditions, moving people and resources where they are needed. FEMA and other agencies don't regularly engage in this sort of behavior. Communities would be wise to work closely with the private sector on disaster-relief protocols. Second, we too easily forget that these firms are part of their communities. The people who work for Wal-Mart in New Orleans or for Imperial Oil in Fort McMurray have every reason to want to see their fellow citizens treated well. The peaceful exchanges that make up the free market are built on mutual benefit. As companies engage in peaceful commerce with their friends and neighbors, they begin to inculcate what the economist Deirdre McCloskey calls the "bourgeois virtues," which go vividly on display when disaster strikes. Many Albertans, as they return to their homes now that the fires have subsided, are glad today that they lived near those supposedly evil oil companies. Mr. Horwitz is an economics professor at St. Lawrence University in Canton, N.Y. Credit: By Steven Horwitz
Subject: Evacuations & rescues; Food; Disasters; Discount department stores
Company / organization: Name: Fort McKay First Nation; NAICS: 921150; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Federal Emergency Management Agency; NAICS: 922190; Name: National Post; NAICS: 511110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794196415
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794196415?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Fur ther reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Epicenter of America's Oil Bust Is Drawing Buyers; Fortune hunters seek bargains in North Dakota's Bakken field
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 June 2016: n/a.
Abstract:
"In this slump there's definitely opportunities to acquire second-tier unconventional reservoirs," said Eddie Rhea, chief executive of another buyer, Foundation Energy Management LLC, which operates more than 3,000 wells nationwide on behalf of endowments and pension funds. A combination of technological innovations such as horizontally drilled and hydraulically fractured wells, steadily rising oil prices and ample Wall Street financing helped the state displace Alaska as the second-largest U.S. producer after Texas, with output topping 1.2 million barrels a day.
Full text: The vultures are descending on North Dakota. Investors hoping for a bargain are buying up oil and gas wells from cash-strapped operators in the state's Bakken Shale, a bet they will eventually be able to profit off one of the country's hardest-hit oil plays. Hundreds of wells have changed hands or are in the process of being sold, state figures show, to a grab bag of fortune seekers ranging from industry experts to first-time wildcatters. They are picking up properties as more established producers scale back or shed assets to pay creditors. Houston-based Lime Rock Resources, founded by a former Goldman Sachs Group Inc. banker and an oil-industry veteran, bought more than 340 North Dakota wells from Occidental Petroleum Corp. in November. The firm says it has at least $1.6 billion in private-equity money to invest, a portion of which it has spent on the Bakken. In another pairing of Wall Street and oil-patch veterans, NP Resources LLC bought 53 wells from Whiting Petroleum Corp. in December and is looking for more Bakken acreage. "In this slump there's definitely opportunities to acquire second-tier unconventional reservoirs," said Eddie Rhea, chief executive of another buyer, Foundation Energy Management LLC, which operates more than 3,000 wells nationwide on behalf of endowments and pension funds. "We buy the 'strip mall,' pretty it up and sell it. We leave it to other companies to build from scratch." Dallas-based Foundation Energy entered North Dakota for the first time in November 2015 by purchasing about 100 wells for an undisclosed price from Whiting, until recently the largest Bakken producer. North Dakota emerged as a major oil source over the past decade. A combination of technological innovations such as horizontally drilled and hydraulically fractured wells, steadily rising oil prices and ample Wall Street financing helped the state displace Alaska as the second-largest U.S. producer after Texas, with output topping 1.2 million barrels a day. But the need to drill deep wells and a lack of infrastructure also have made the Bakken one of the costliest U.S. shale fields. U.S. oil prices settled above $50 on Tuesday for the first time since July, but that still isn't enough to make many of the region's wells profitable. The number of rigs drilling new wells has shrunk to the lowest level in a decade. In the Boxcar Butte oil field near Watford City, pump jacks stand idle on a cattle pasture surrounded by wheat fields. The wells haven't produced a drop of oil in over a year and are among 2,005 idled in western North Dakota, according to state data. Companies like Whiting, which paid a premium to take over rival Kodiak Oil at the height of the Bakken boom, are paring back operations. Occidental exited from its investments in the Bakken last fall and has focused on other plays. Emerald Oil Inc. and others have sought bankruptcy protection and sought to sell their Bakken assets to pay creditors. The new investors say they are waiting for prices to stabilize in the $60-to-$70 range before starting up the drill bits again. Meanwhile, they say they can make money nursing along wells they bought on the cheap. They are cutting costs by laying off excess staff and selling spare equipment like pickup trucks. State regulators are watching the shift in ownership warily amid concerns financial investors could leave oil fields in worse shape than they found them if prices drift lower. "It is a big concern," said Lynn Helms, director of North Dakota's Department of Mineral Resources, noting the state runs background checks on the buyers' management teams. North Dakota drafted new rules in February that add new bonding requirements for pipelines connecting to well sites and storage tanks for oil-field wastewater to prevent operators from skimping on maintenance or abandoning them if their Bakken bets don't pay off. The North Dakota government took over a pair of two improperly abandoned wells earlier this year and is threatening to confiscate others. Emerald Oil, which owns the idled Boxcar Butte sites, is among those in violation of statutes requiring it to produce or plug. The Denver-based oil-and-gas producer filed for bankruptcy protection in March. Before doing so, it signed a $10 million deal in December to sell a few dozen wells to Angelus Group, an investment firm run by a pair of Austin, Texas, entrepreneurs new to the energy business. Emerald Oil didn't respond to requests for comment on the asset sales. Angelus managing partner Paul Haarman is a self-described financial planner and former host of a radio talk show on investing. "You had a lot of people who overleveraged themselves when oil prices were high, so we're taking advantage of that obviously," said Mr. Haarman.His partner, Patrick Duke, is a multifamily-housing investor who says his industry experience comes from working on oil rigs while in college in the late 1970s. Mr. Duke said Angelus has raised $75 million from wealthy investors for energy deals. "The production pays for itself, because we're buying at such a reasonable rate," he said. As part of its bankruptcy proceedings, Emerald said last month it received a $73 million bid for its remaining assets from affiliates of institutional investor Crestline Management LP and private-equity firm Sole Source Capital LLC, setting the floor ahead of a July auction. Representatives of Crestline and Sole Source declined to comment. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Bankruptcy; Prices
Location: United States--US
Company / organization: Name: Foundation Energy Management LLC; NAICS: 523910; Name: Occidental Petroleum Corp; NAICS: 324110, 211111; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 7, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794196478
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794196478?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices on Steady Climb Beyond $50 Due to Supply Declines; August Brent crude on London's ICE Futures exchange was unchanged at $51.44 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
Abstract:
Crude oil prices scaled beyond the $50 mark in early Asian trade Wednesday, as supply disruptions in Nigeria and likely declines in the U.S. crude inventories and production fueled bullish sentiment.
Full text: Crude oil prices scaled beyond the $50 mark in early Asian trade Wednesday, as supply disruptions in Nigeria and likely declines in the U.S. crude inventories and production fueled bullish sentiment. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $50.42 a barrel at 0122 GMT, up $0.06 in the Globex electronic session, after settling above $50 for the first time since July. August Brent crude on London's ICE Futures exchange was unchanged at $51.44 a barrel. The jump is largely driven by the continuing supply disruption in Nigeria, where militant group Niger Delta Avengers has vowed to shutter the country's oil operation. Multiple attacks on key pipelines and facilities have reduced Nigeria's daily oil output to around 1 million barrels. Production in the U.S. has also waned on reduced investments. The Energy Information Administration said Tuesday that domestic crude production fell by 250,000 barrels a day in May from April, the biggest one-month decline in years. Investors are also cheered by reports that U.S. crude stocks might have ebbed further last week. A survey by The Wall Street Journal shows U.S. crude stockpiles fell by 3.1 million barrels last week, while gasoline inventories fell by 500,000 barrels and stocks of distillates, fell by 300,000 barrels. Data by American Petroleum Institute for the week ended June 3 indicates crude supplies decreased by 3.6 million barrels. Official EIA data will be released later today. "The 50 handle to prices came quickly and for now looks here to stay," said Stuart Ive, a client manager at OM Financial. But as prices rise above $50, there is also a fear that more U.S. shale producers whose production costs vary from $30 to $50 a barrel, would be enticed to increase their output, flooding the still-well supplied market with more crude. The recent increase of nine active oil rigs in the U.S. underpins such concerns. Morgan Stanley said, that while the rig count increase was "not enough to materially change the outlook for U.S. production," the figures suggest "rigs may be returning in the best acreage, namely the Permian Basin." If the trend continues, it could cause prices to tumble again, analysts said. Production from the Organization of the Petroleum Exporting Countries also remains a critical factor. If OPEC production holds near current levels, the deficit could happen as early as next quarter, said Timothy Evans, a Citi Futures analyst. However, if Nigerian daily output recovers to around 1.9 million-barrel, it would push total OPEC output to 33 million barrels a day, delaying the deficit until the second half of 2017, he said. For today, market participants will be watching China's May trade data for cues. Analysts expect China's crude import to remain robust but slower than the previous months as port congestion may have stifled incoming shipments. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--rose 50 points to $1.5921 a gallon, while July diesel traded at $1.5398, 17 points lower. ICE gas oil for June changed hands at $456.75 a metric ton, up $0.50 from Tuesday's settlement. Nicole Friedman contributed to this article. Credit: By Jenny Hsu
Subject: Inventory; Futures; Crude oil prices; Price increases; Supply & demand
Location: United States--US Nigeria
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794218989
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794218989?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Stocks Inch Closer to Record High, Supported by Oil Prices; Investors' belief that Fed will take cautious approach to raising rates is helping to spur rally
Author: Gold, Riva; Kuriloff, Aaron
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
Abstract:
Many investors drew reassurance from a speech by U.S. Federal Reserve Chairwoman Janet Yellen on Monday, in which she said Fed officials expect the economy to improve but won't raise interest rates until new uncertainties about the economic outlook are resolved.
Full text: The S&P 500 crept closer to its record high Tuesday, lifted by oil's return to $50 a barrel and renewed confidence that U.S. interest rates will stay low. The gains briefly boosted the Dow industrials above 18000 for the first time in more than a month and the S&P 500 closed within 0.9% of its record, spurred by energy shares that have climbed with the price of oil in recent months. Today's Highlights * Goldman Probed Over Malaysia Fund 1MDB * Mutual-Fund Directors Are Staying On Boards for Decades. Is That a Bad Thing? * Malls Embrace High-Tech to Entice Shoppers Stocks pared gains late in the session. The Dow Jones Industrial Average rose 17.95 points, or 0.1%, to 17938.28, its highest close since April 27. The S&P 500 climbed 2.72 points, or 0.1%, to 2112.13, its highest close since July 22. The Nasdaq Composite Index fell 6.96 points, or 0.1%, to 4961.75 and is still down so far in 2016. Crude oil extended gains as the dollar weakened and production outages curbed supply. U.S. crude rose 1.3% to $50.36 a barrel, settling above $50 for the first time since July. Prices have nearly doubled since hitting 13-year lows earlier in 2016 as companies have cut spending on new drilling and unplanned outages in Nigeria and Canada helped shrink the global oil glut. U.S. crude production fell by 250,000 barrels a day in May from April, the largest one-month decline in years, the Energy Information Administration said Tuesday in its short-term energy outlook. Energy shares in the S&P 500 added 2.1%. EOG Resources climbed $4.15, or 5.1% to $85.42 and Concho Resources gained 5.75, or 4.8%, to 126.26. Chevron and Exxon Mobil were among the biggest gainers in the Dow industrials. The energy sector's earnings have declined for six consecutive quarters year-over-year, according to FactSet, so oil's price gains could brighten the outlook for some of those companies. Energy shares in the S&P 500 have rallied 11% in the past three months. "Oil has continued to strengthen, giving people comfort that at some point we can see a recovery in S&P 500 earnings," said Doug Foreman, chief investment officer at Kayne Anderson Rudnick Investment Management. "Areas like energy, industrial materials and a lot of commodities--which had been decimated--are coming out of a depression, and that change alone is very, very positive for the overall marketplace," he said. U.S. government bond yields fell as concerns about rising rates faded. The yield on the benchmark 10-year Treasury note was 1.713% compared with 1.723% Monday. Yields fall as bond prices rise. Many investors drew reassurance from a speech by U.S. Federal Reserve Chairwoman Janet Yellen on Monday, in which she said Fed officials expect the economy to improve but won't raise interest rates until new uncertainties about the economic outlook are resolved. "We think they're going to move very, very slowly," said Monica Defend, head of global asset allocation research at Pioneer Investments. Friday's weaker-than-expected jobs report sharply reduced expectations for a rate rise at the Fed's June and July meetings. The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, fell 0.4%. The dollar tends to benefit from higher interest rates. "Every data point is really being dissected," said Chris Dyer, director of global equity at Eaton Vance. "Consumer strength has been a real engine of growth in the U.S. economy, and this [jobs report] raises a little bit of a red flag," he said. The Stoxx Europe 600 rose 1.1%, led by energy companies. Japan's Nikkei Stock Average added 0.6%, while Hong Kong's Hang Seng Index gained 1.4%. Nicole Friedman contributed to this article. In the Markets * U.S. Oil Settles Above $50 for First Time Since July * Dollar Falls to One-Month Low * Volatile Pound Underscores Market Jitters Over 'Brexit' Vote * Treasury Yields Fall on Fed Outlook * Gold Pares Losses as Rate Outlook Shifts * Asia Stocks Rise on Higher Commodity Prices Write to Riva Gold at riva.gold@wsj.com and Aaron Kuriloff at aaron.kuriloff@wsj.com Credit: By Riva Gold and Aaron Kuriloff
Subject: Interest rates; Dow Jones averages; Stock exchanges; Investments; Energy industry
Location: United States--US Malaysia
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794228055
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794228055?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Shares Edge Higher as Oil Gains --- Energy stocks give S&P 500 and Dow a lift as crude extends its recent increase
Author: Gold, Riva; Kuriloff, Aaron
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 June 2016: C.4.
Abstract:
Many investors drew reassurance from a speech by U.S. Federal Reserve Chairwoman Janet Yellen on Monday, in which she said Fed officials expect the economy to improve but won't raise interest rates until new uncertainties about the economic outlook are resolved.
Full text: The S&P 500 crept closer to a record, lifted by oil's return to $50 a barrel and renewed confidence that U.S. interest rates will stay low. The gains briefly boosted the Dow industrials above 18000 for the first time in more than a month, and the S&P 500 closed within 0.9% of its record, spurred by energy shares that have climbed with the price of oil in recent months. Stocks pared gains late in the session. The Dow Jones Industrial Average ended higher by 17.95 points, or 0.1%, at 17938.28, its highest close since April 27. The S&P 500 climbed 2.72 points, or 0.1%, to 2112.13, its highest finish since July 22. The Nasdaq Composite Index fell 6.96 points, or 0.1%, to 4961.75 and remains down so far in 2016. Crude oil extended gains as the dollar weakened and production outages curbed supply. U.S. crude rose 1.3% to $50.36 a barrel, settling above $50 for the first time since July. Prices have nearly doubled since hitting 13-year lows earlier in 2016 as companies have cut spending on new drilling and unplanned outages in Nigeria and Canada helped shrink the global oil glut. U.S. crude production fell by 250,000 barrels a day in May from April, the largest one-month decline in years, the Energy Information Administration said Tuesday in its short-term energy outlook. Energy shares in the S&P 500 added 2.1%. EOG Resources climbed $4.15, or 5.1%, to $85.42 and Concho Resources gained 5.75, or 4.8%, to 126.26. Chevron and Exxon Mobil were among the biggest gainers in the Dow industrials. The energy sector's earnings have declined year over year for six consecutive quarters, according to FactSet, so oil's price gains could brighten the outlook for some of those companies. Energy shares in the S&P 500 have rallied 11% in the past three months. "Oil has continued to strengthen, giving people comfort that at some point we can see a recovery in S&P 500 earnings," said Doug Foreman, chief investment officer at Kayne Anderson Rudnick Investment Management. "Areas like energy, industrial materials and a lot of commodities -- which had been decimated -- are coming out of a depression, and that change alone is very, very positive for the overall marketplace," he said. U.S. government-bond yields fell as concerns about rising rates faded. The yield on the benchmark 10-year Treasury note was 1.713% compared with 1.723% Monday. Yields fall as bond prices rise. Many investors drew reassurance from a speech by U.S. Federal Reserve Chairwoman Janet Yellen on Monday, in which she said Fed officials expect the economy to improve but won't raise interest rates until new uncertainties about the economic outlook are resolved. Friday's weaker-than-expected jobs report sharply reduced expectations for a rate rise at the Fed's June and July meetings. The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, fell 0.4%. The Stoxx Europe 600 rose 1.1%, led by energy companies. Early Wednesday, Japan's Nikkei was flat, the Shanghai Composite was down 0.6% and Hong Kong's Hang Seng Index was off 0.5%. --- Nicole Friedman contributed to this article. Credit: By Riva Gold and Aaron Kuriloff
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2016
Publication date: Jun 8, 2016
column: Tuesday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794311351
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794311351?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Shell Plans More Cost Cuts --- Oil major aims to maintain dividend after $50 billion BG Group buy
Author: Williams, Selina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 June 2016: B.3.
Abstract:
The CEO staked his reputation on the deal, which he intended to bolster Shell's focus on liquefied natural gas -- a fast-growing market as some countries are trying to replace coal with gas -- and deep-water-oil projects.
Full text: LONDON -- Royal Dutch Shell PLC said Tuesday it was planning new spending cuts to keep up its dividend payments after spending about $50 billion to buy rival BG Group PLC during the depths of an oil-price rout. In the combined company's first strategy presentation, Chief Executive Ben van Beurden raised the Anglo-Dutch oil company's estimate for the cost savings achievable through the integration of BG. Mr. Van Beurden also cut Shell's planned investment in big new projects through the end of the decade and reiterated the company's intention to sell some properties in a plan to "reshape Shell into a more focused and more resilient company." The emphasis on cost cuts -- which comes after several rounds of layoffs over the past year -- highlights Shell's caution over a potential oil-price recovery. After trading at more than $100 a barrel in 2014, a global oil glut drove prices down to about $27 a barrel in January. Shell and other big oil companies responded by slashing staff and delaying or canceling big projects. The price of oil has since recovered to about $50 a barrel, but Shell is continuing to advertise a frugal outlook to investors -- what Mr. van Beurden on Tuesday called a "lower forever mind-set." Mr. Van Beurden said Shell will achieve pretax cost savings of $4.5 billion in 2018 as a result of the merger with BG, up from its previous target of $3.5 billion. Shell also lowered its planned capital investment for this year by $1 billion to $29 billion. From 2017 to the end of the decade the company will keep its capital spending in a range of $25 billion to $30 billion a year, the CEO said, and possibly lower if oil prices don't go up much. He did say that Shell plans to continue investing in deep-water-oil projects -- an expensive but potentially lucrative area. Mr. Van Beurden is under pressure to reduce Shell's net debt, which grew to nearly $70 billion after the BG acquisition. The CEO staked his reputation on the deal, which he intended to bolster Shell's focus on liquefied natural gas -- a fast-growing market as some countries are trying to replace coal with gas -- and deep-water-oil projects. But some investors have panned the deal as a lavish buy during a period of low oil prices. Standard Life Investments voted against the transaction, saying it would cut Shell's value because of the risk of lower oil prices and tax and operational risks surrounding BG's Brazilian oil fields. Shell said in the strategy update that it would reduce investments in its integrated gas division, which includes the liquefied gas operations, and focus on deep-water-oil fields such as those in Brazil, which were acquired in the BG merger, and the Gulf of Mexico. Shell said its daily deep-water-oil production could double from 2015 levels to about 900,000 barrels of oil and equivalent natural-gas volumes in 2020. In addition to deep-water crude, Mr. van Beurden, a veteran of Shell's petrochemical operations, said new chemicals facilities are a growth priority. --- Rory Gallivan contributed to this article. Credit: By Selina Williams
Subject: Cost control; Capital expenditures; Petroleum industry
Location: United Kingdom--UK
People: van Beurden, Ben
Company / organization: Name: BG Group PLC; NAICS: 486210, 211111, 221210; Name: Royal Dutch Shell PLC; NAICS: 324110 , 213112, 221210
Classification: 8510: Petroleum industry; 3100: Capital & debt management; 9175: Western Europe
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2016
Publication date: Jun 8, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794311355
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794311355?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
S&P 500 Up for Third Straight Session, Inching Toward Record High; Oil prices continue climbing, while the dollar declines
Author: Vaishampayan, Saumya; Gold, Riva
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
Abstract:
In a busy day for European markets, German and U.K. government bond yields hovered around fresh all-time lows, while the European Central Bank began its corporate bond purchase program designed to help lift the eurozone from years of persistently low inflation.
Full text: Major U.S. stock indexes rose for the third session in a row Wednesday, as the S&P 500 closed in on its record and the Dow industrials finished above 18000. Commodity-linked shares have led gains in recent days as oil and metals prices rallied. The S&P 500 hasn't breached its record close of 2130.82 in more than a year, the longest dry spell since 2013. Investors have remained cautious even as the market inches higher, traders and analysts said. The S&P 500 hasn't posted a gain of 1% or more since May 24. "People are not 100% comfortable with the levels we're at," said Larry Weiss, head of trading at Instinet. Today's Highlights * The Epicenter of America's Oil Bust Is Drawing Buyers * The Problem With Assigning Blame for the Financial Crisis * Missing From Trump's New Hotels: The Family Name The Dow Jones Industrial Average gained 66.77, or 0.4%, to 18005.05, closing above the 18000 mark for the first time since April 27. The S&P 500 rose 6.99 points, or 0.3%, to 2119.12, just 0.5% below its record close. The Nasdaq Composite rose 12.89, or 0.3%, to 4974.64. The industrials and materials sectors led gains in the S&P 500, rising 0.7% and 0.6%, respectively. Lululemon Athletica shares rose $3.34, or 4.9%, to $71.48 after the yoga-wear maker raised its financial forecasts for the year Wednesday. Signet Jewelers shares climbed 3.41, or 4%, to 89.31, notching one of the biggest gains in the S&P 500. U.S. crude oil gained 1.7% to $51.23 a barrel and has risen 95% since Feb. 11, which marked a 2016 low for both oil and stocks. Energy stocks in the S&P 500 slipped 0.2% Wednesday but have notched the biggest advance in the S&P 500 since the February low. The rebound in oil prices bodes well for an eventual recovery in profits at energy firms, analysts said. This year's decline in the dollar, which took another leg lower after Friday's dismal jobs report diminished expectations for a rate rise in the next few months, could also lift profits at U.S. companies that earn profits overseas. "We don't have to do a lot of math to figure out that the picture is looking better" for S&P 500 profits, said Kate Warne, investment strategist at Edward Jones. Ms. Warne said she continues to recommend stocks to clients, especially shares in Europe and Japan. The Wall Street Journal Dollar Index, which measures the dollar against a basket of 16 currencies, fell 0.4% Wednesday to its lowest level since May 3. The euro gained 0.4% against the dollar to $1.1397. The dollar fell 0.4% against the yen to ¥106.95. Gold for June delivery rose 1.2% to $1,259.80 an ounce. Government-bond yields hovered near low levels Wednesday. The yield on the 10-year Treasury note slipped to 1.706% from 1.713% on Tuesday. The 10-year German government bond yield fell as low as 0.036%, the all-time intraday low, before rebounding, according to Tradeweb. The 10-year German bund yield closed at a record low on Tuesday. "It's quite something," said Trevor Greetham, head of multi asset at Royal London Asset Management, who currently holds an underweight position in bonds. "There's a lot of central bank buying to keep the yields this low," he added. The European Central Bank has already bought more than [euro]1 trillion ($1.14 trillion) of mainly government bonds under its quantitative-easing program. Government bond yields in the eurozone have fallen amid persistently weak growth and inflation, and continued buying from the ECB. Many analysts now expect German yields to reach zero or to even join Japan in negative territory in the coming weeks. On Wednesday, the ECB also began its corporate bond purchase program , the first time the central bank has entered the corporate-bond market. Stock markets in Europe ended mostly lower, with the Stoxx Europe 600 falling 0.5%. The Shanghai Composite slipped 0.3% . Hong Kong's Hang Seng lost 0.1%, while Japan's Nikkei Stock Average rose 0.9%. In the Markets * Oil Prices Rise as U.S. Crude Stockpiles Fall * Rock-Bottom Bond Yields in Europe Hit All-Time Lows * Asian Shares Mixed as China Stocks Retreat Write to Riva Gold at riva.gold@wsj.com and Saumya Vaishampayan at saumya.vaishampayan@wsj.com Credit: By Saumya Vaishampayan and Riva Gold
Subject: Central banks; Government bonds; Stocks; Eurozone
Location: United Kingdom--UK United States--US
Company / organization: Name: American Petroleum Institute; NAICS: 813910, 541820; Name: European Union; NAICS: 926110, 928120; Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
column: U.S. Markets
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794346976
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794346976?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Rosneft Net Profit Tumbles 75%; The world's largest listed crude producer boosts investment despite weak oil prices
Author: Mills, Laura
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
Abstract:
MOSCOW--Russian state-controlled oil company OAO Rosneft saw its net profit tumble 75% in the first quarter from a year earlier as crude prices reached their lowest in over a decade.
Full text: MOSCOW--Russian state-controlled oil company OAO Rosneft saw its net profit tumble 75% in the first quarter from a year earlier as crude prices reached their lowest in over a decade. Rosneft, the world's largest listed crude producer, said Wednesday that net income shrank to 14 billion rubles (about $216 million) in the first quarter compared with the same period a year earlier. Rosneft cited weak crude prices as well as transportation tariffs, sector-specific taxes and a boost in investment as reasons for the drop. "The decrease in Rosneft's net profit is largely due to the fact that the company is in an investment stage, launching a number of projects that will allow us to increase production volumes," the company said in a statement. Rosneft said capital expenditures were up 20% in the first quarter compared with the same period in 2015, to 154 billion rubles. The company said the expenditures were linked to preparation for starting operations in two fields, in line with previous plans for the year. Russia's energy companies have been relatively sheltered from weak pricing by the devaluation of the ruble, which has weakened along with oil prices. Rosneft's earnings before interest, taxation, depreciation and amortization dipped 14% to 273 billion rubles, while revenue shrank 21% to 1.05 trillion rubles. Rosneft said it had also reduced net debt by 45% to $23.9 billion compared with the first quarter of 2015. . Credit: By Laura Mills
Subject: Rubles; Capital expenditures
Company / organization: Name: OAO Rosneft; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794369477
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794369477?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Closes Above $50 for Second Day in a Row; First back-to-back settlements above that mark in nearly a year amid production outages
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
Abstract:
The fervor likely helps account for oil's resilience Wednesday at a time when stockpile data suggests oversupply is still a problem and prices should retreat, said Scott Shelton, a broker at ICAP PLC. The U.S. Energy Information Administration said U.S. output increased by 10,000 barrels last week compared with the week before, raising questions about whether the rebounding market is already leading U.S. producers to pump more.
Full text: U.S. oil prices rose to a fresh 10-month high Wednesday as traders stayed focused on production outages that could significantly curb the amount of excess global supply by year's end. The benchmark price closed above $50 a barrel for the second session in a row, marking the first back-to-back settlements above that point in nearly a year. Crude oil has nearly doubled in value since hitting decade lows earlier this winter as production disruptions world-wide rein in the oversupply that had spurred two years of falling prices. Wednesday's gains surprised many analysts who said the latest inventory data from the U.S. government showed a healthy level of supplies nationwide. Stockpiles of gasoline and distillates--a category of fuel that includes diesel--grew unexpectedly, and U.S. crude output increased for the first time in 13 weeks. However, those increases are small compared with recent major supply disruptions in Africa and Canada, said Bart Melek, head of commodity strategy at TD Securities in Toronto. Traders are "looking to the end of 2016" and not just at one week, Mr. Melek said. "You can argue that the market is rebalancing a little quicker than expected." U.S. crude oil for July delivery rose 87 cents, or 1.7%, to $51.23 a barrel on the New York Mercantile Exchange, its highest close since July 15. Brent crude, the global benchmark, gained $1.07, or 2.1%, to $52.51 a barrel on ICE Futures Europe, its highest settlement since Oct. 9. Both markets are up more than 5% during a three-session winning streak. Renewed concern about Nigeria in particular had spurred gains Wednesday. The militant group Niger Delta Avengers has vowed to shutter the country's oil operations. Multiple attacks on key pipelines and facilities have reduced Nigeria's daily oil output to around 1 million barrels. Data from China also showed that its oil imports stayed strong in May. China is the world's second-largest oil consumer and news about its economy often sways the market. While oil imports fell over the month because of planned refinery outages , they rose around 40% compared with the same month in 2015. Chinese oil imports in the first five months of the year, combined, were 16% up on the same period last year, according to Commerzbank. "This extra demand has boosted not only the price of oil, but also optimism that the world's second-largest oil consumer may be arresting its economic downturn--something which would be supportive for oil and other commodities," said Mihir Kapadia, chief executive at Sun Global Investments. Oil markets have also benefited from renewed interest in commodities generally. In the first four months of the year, $28 billion has gone into commodity investments, according to Barclays. Combine those inflows with rising markets and commodities now account for $220 billion in assets, the highest level since June 2015. That can help prices keep rising even in oversupplied markets. The fervor likely helps account for oil's resilience Wednesday at a time when stockpile data suggests oversupply is still a problem and prices should retreat, said Scott Shelton, a broker at ICAP PLC. The U.S. Energy Information Administration said U.S. output increased by 10,000 barrels last week compared with the week before, raising questions about whether the rebounding market is already leading U.S. producers to pump more. EIA also said stockpiles of gasoline and distillates grew by a combined 2.8 million barrels, offsetting much of the 3.2-million decrease in crude supplies. Inventories were already near historic highs. Fuel demand from drivers has set a record pace this spring, but refiners may have been anticipating even more, leading them to pump out more fuel than needed, Mr. Melek said. Analysts surveyed by The Wall Street Journal had expected gasoline stockpiles to shrink by 500,000 barrels and distillates by 300,000 barrels. Gasoline futures immediately fell on the report, but rebounded quickly, settling up 3.27 cents, or 2.1%, to $1.6198 a gallon. Diesel futures held to gains and then added more late in the afternoon, settling up 2.9 cents, or 1.9%, to $1.5705 a gallon. "I'm pretty unimpressed with (Wednesday's) data," said Mr. Shelton. "But we're in a commodity bull market, so it's hard to get (bearish) when the entire commodity asset class is just exploding." Jenny W. Hsu and Dan Molinski contributed to this article. Write to Timothy Puko at tim.puko@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Timothy Puko and Georgi Kantchev
Subject: Crude oil; Price increases; Supply & demand; Oil consumption
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794397941
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794397941?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Saudi Arabia Working on First International Bond Sale, Finance Minister Says; Oil-exporting Gulf nations increasingly look to capital markets as energy revenue shrinks
Author: Ahmed Al Omran; Nikhil Lohade; Ahmed Al Omran; Lohade, Nikhil
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
Abstract:
The appetite for Saudi Arabia's debut international bond sale is likely to be high, especially after Qatar received strong demand for its $9 billion multi-tranche debt issue last month, bankers and fund managers say, with some speculating that the kingdom could even raise as much as $20 billion.
Full text: Saudi Arabia plans to sell bonds for the first time to international investors as the kingdom tackles a widening budget deficit caused by cheap oil, according to the country's finance minister. "We are now working on issuing international bonds," Ibrahim Al-Assaf told reporters late Tuesday on the sidelines of a news conference in Jeddah, Saudi Arabia. Saudi Arabia and its oil-exporting neighbors in the Persian Gulf region are increasingly looking to access capital markets as shrinking oil revenue pressures their finances. The Wall Street Journal, citing people familiar with the matter, reported last month that Saudi Arabia was preparing to tap international bond markets sometime this year. The kingdom borrowed $10 billion from a consortium of global banks in April and could raise as much as $15 billion by selling international bonds, some bankers have said. The minister on Tuesday said officials haven't made a decision yet on the amount they plan to raise but noted it would be based on the needs of the government. The appetite for Saudi Arabia's debut international bond sale is likely to be high, especially after Qatar received strong demand for its $9 billion multi-tranche debt issue last month, bankers and fund managers say, with some speculating that the kingdom could even raise as much as $20 billion. But Mr. Al-Assaf said "The number has not been determined yet." A sharp fall in the price of oil since the middle of 2014 has strained the kingdom's finances, forcing it to run a record budget deficit of about $98 billion last year. It has also drawn down its foreign-exchange reserves, which fell to about $581 billion at the end of April from a peak of $746 billion in August 2014. The government has taken some steps to address this--issuing domestic bonds, while cutting spending and some state handouts. "We have issued more than 100 billion riyals [$26.66 billion] in local bonds and more will be issued, but our goal in local borrowing is not to compete with the private sector in borrowing. We wish to have enough liquidity for the private sector to borrow," Mr. Al-Assaf said. Saudi Arabia this week unveiled plans to reshape the kingdom's oil-dependent economy . The so-called National Transformation Program offers details on how the ruling monarchy plans to achieve long-term economic change in an era of cheap oil. The generation of revenue from sources other than oil and the rolling back of subsidies are among the top goals. The kingdom's debt, as part of this plan, is likely to grow further. Its ratio of debt to gross domestic product is expected to widen to 30% by 2020, from 7% today, according to the NTP document. Saudi Arabia this week said it aims to boost its credit rating with Moody's Investors Service to Aa2 by 2020, after Moody's and several other ratings firms downgraded the kingdom in recent months. Moody's in May cut Saudi Arabia's long-term issuer ratings to A1 from Aa3. While the appetite for Saudi Arabian debt is likely to be high, fund managers expect the kingdom to pay more than its peers such as Qatar and Abu Dhabi, which also raised $5 billion recently, as they have a relatively better credit rating. The International Monetary Fund said in May that it expects Saudi growth to slow this year as cheap oil continues to weigh on the kingdom's economy. But the IMF also praised the country's efforts to promote changes and reduce its dependence on crude sales. Nicolas Parasie and Margherita Stancati in Dubai contributed to this article. Write to Ahmed Al Omran at Ahmed.AlOmran@wsj.com and Nikhil Lohade at Nikhil.Lohade@wsj.com Credit: Ahmed Al Omran, Nikhil Lohade
Subject: Bond issues; International finance; Investment advisors; Budget deficits; Economic growth; Gross Domestic Product--GDP
Location: Qatar Saudi Arabia Persian Gulf
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794397967
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794397967?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Battered Shale Hub Beckons Buyers --- Fortune hunters seek bargains in North Dakota's Bakken field, center of U.S. oil bust
Author: Dawson, Chester
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 June 2016: C.1.
Abstract:
A combination of technological innovations such as horizontally drilled and hydraulically fractured wells, steadily rising oil prices and ample Wall Street financing helped the state displace Alaska as the second-largest U.S. producer after Texas, with output topping 1.2 million barrels a day.
Full text: The vultures are descending on North Dakota. Investors hoping for a bargain are buying up oil and gas wells from cash-strapped operators in the state's Bakken Shale, a bet they will eventually be able to profit off one of the country's hardest-hit oil plays. Hundreds of wells have changed hands or are in the process of being sold, state figures show, to a grab bag of fortune seekers ranging from industry experts to first-time wildcatters. They are picking up properties as more established producers scale back or shed assets to pay creditors. Houston-based Lime Rock Resources, founded by a former Goldman Sachs Group Inc. banker and an oil-industry veteran, bought more than 340 North Dakota wells from Occidental Petroleum Corp. in November. The firm says it has at least $1.6 billion in private-equity money to invest, a portion of which it has spent on the Bakken. In another pairing of Wall Street and oil-patch veterans, NP Resources LLC bought 53 wells from Whiting Petroleum Corp. in December and is looking for more Bakken acreage. "In this slump there's definitely opportunities to acquire second-tier unconventional reservoirs," said Eddie Rhea, chief executive of another buyer, Foundation Energy Management LLC, which operates more than 3,000 wells nationwide on behalf of endowments and pension funds. "We buy the 'strip mall,' pretty it up and sell it. We leave it to other companies to build from scratch." Dallas-based Foundation Energy entered North Dakota for the first time in November 2015 by purchasing about 100 wells for an undisclosed price from Whiting, until recently the largest Bakken producer. North Dakota emerged as a major oil source over the past decade. A combination of technological innovations such as horizontally drilled and hydraulically fractured wells, steadily rising oil prices and ample Wall Street financing helped the state displace Alaska as the second-largest U.S. producer after Texas, with output topping 1.2 million barrels a day. But the need to drill deep wells and a lack of infrastructure also have made the Bakken one of the costliest U.S. shale fields. U.S. oil prices settled above $50 on Tuesday for the first time since July, but that still isn't enough to make many of the region's wells profitable. The number of rigs drilling new wells has shrunk to the lowest level in a decade. In the Boxcar Butte oil field near Watford City, pump jacks stand idle on a cattle pasture surrounded by wheat fields. The wells haven't produced a drop of oil in over a year and are among 2,005 idled in western North Dakota, according to state data. Companies like Whiting, which paid a premium to take over rival Kodiak Oil at the height of the Bakken boom, are paring back operations. Occidental exited from its investments in the Bakken last fall and has focused on other plays. Emerald Oil Inc. and others have sought bankruptcy protection and sought to sell their Bakken assets to pay creditors. The new investors say they are waiting for prices to stabilize in the $60-to-$70 range before starting up the drill bits again. Meanwhile, they say they can make money nursing along wells they bought on the cheap. They are cutting costs by laying off excess staff and selling spare equipment like pickup trucks. State regulators are watching the shift in ownership warily amid concerns financial investors could leave oil fields in worse shape than they found them if prices drift lower. "It is a big concern," said Lynn Helms, director of North Dakota's Department of Mineral Resources, noting the state runs background checks on the buyers' management teams. North Dakota drafted new rules in February that add new bonding requirements for pipelines connecting to well sites and storage tanks for oil-field wastewater to prevent operators from skimping on maintenance or abandoning them if their Bakken bets don't pay off. The North Dakota government took over a pair of two improperly abandoned wells earlier this year and is threatening to confiscate others. Emerald Oil, which owns the idled Boxcar Butte sites, is among those in violation of statutes requiring it to produce or plug. The Denver-based oil-and-gas producer filed for bankruptcy protection in March. Before doing so, it signed a $10 million deal in December to sell a few dozen wells to Angelus Group, an investment firm run by a pair of Austin, Texas, entrepreneurs new to the energy business. Emerald Oil didn't respond to requests for comment on the asset sales. Angelus managing partner Paul Haarman is a self-described financial planner and former host of a radio talk show on investing. His partner, Patrick Duke, is a multifamily-housing investor who says his industry experience comes from working on oil rigs while in college in the late 1970s.
Credit: By Chester Dawson
Subject: Oil shale; Petroleum industry
Location: North Dakota
Company / organization: Name: Foundation Energy Management LLC; NAICS: 523910; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: Occidental Petroleum Corp; NAICS: 324110, 211111; Name: Whiting Petroleum Corp; NAICS: 211111
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Jun 8, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794399317
Document URL: https://login.ezproxy.uta.edu/l ogin?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794399317?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Crude Supplies Fall; Fuel Inventories Rise; Crude-oil stockpiles still remain at historically high levels for this time of year
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
Abstract:
Distillate stocks, which include heating oil and diesel fuel, jumped by 1.8 million barrels to 151.4 million barrels, leaving them well above the upper limit of the average range, the EIA said.
Full text: U.S. crude stockpiles declined slightly more than expected in the week ended June 3, while inventories of gasoline and other fuels surprisingly increased, according to data released Wednesday by the Energy Information Administration. Crude-oil stockpiles fell by 3.2 million barrels to 532.5 million barrels, but remain at historically high levels for this time of year, the EIA said. Analysts surveyed by The Wall Street Journal had predicted supplies would fall by 3.1 million barrels on the week. Oil stored at the Cushing, Okla., delivery point for U.S. stocks, decreased by 1.4 million barrels to 65.6 million barrels, the EIA said in its weekly report. Gasoline stockpiles increased by 1 million barrels to 239.6 million barrels. Analysts were expecting a 500,000-barrel decline. Distillate stocks, which include heating oil and diesel fuel, jumped by 1.8 million barrels to 151.4 million barrels, leaving them well above the upper limit of the average range, the EIA said. Analysts had expected supplies to decline by 300,000 barrels from a week earlier. Refining capacity utilization rose by 1.1 percentage points from the previous week to 90.9%. Analysts were expecting a smaller, 0.6-percentage-point increase from the previous week. Write to Dan Molinski at Dan.Molinski@wsj.com Credit: By Dan Molinski
Subject: Petroleum products
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794514650
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794514650?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Gains Energy Market Share in Changing Landscape; Its rise comes with the drop in prices and amid an evolving global picture, BP says in annual review
Author: Salvaterra, Neanda
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
Abstract:
Oil gained market share in the world's fuel mix last year for the first time since 1999, BP PLC said Wednesday in its annual review of global energy statistics, after a world-wide glut drove prices down more than 50% since 2014.
Full text: Oil gained market share in the world's fuel mix last year for the first time since 1999, BP PLC said Wednesday in its annual review of global energy statistics, after a world-wide glut drove prices down more than 50% since 2014. BP's report showed a shifting global energy landscape . Overall demand is showing a "gradual deceleration," BP said, the result of world-wide economic weakness and slower Chinese growth . At the same time, coal is losing market share to oil, natural gas and renewable energy. Coal consumption fell 1.8% from 2014, BP said, driven by a slump in U.S. demand . It was coal's biggest annual percentage decline on record, BP said. Overall global energy consumption increased by 1% in 2015 from a year earlier, a slower pace than the 10-year average of 1.9%. Still, BP Chief Economist Spencer Dale said governments need to do more to meet emissions-reduction targets they set in the Paris climate talks last year. "We need governments to lead on this and set the right incentives," he said. Global oil production grew 3.2% last year, while consumption grew 1.9%. The world's consumption of natural gas, a fuel that oil companies have been banking on for growth as countries try to move away from coal, increased 1.7% in 2015 from a year earlier. BP said renewable energy accounted for 2.8% of global energy consumption, up from 0.8% 10 years ago. Write to Neanda Salvaterra at neanda.salvaterra@wsj.com Credit: By Neanda Salvaterra
Subject: Coal; Market shares; Petroleum production; Energy consumption
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794536152
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794536152?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
IMF: Oil-Exporting Countries Are Focusing on Cutting Spending; Increasing non-oil revenue also seen reducing budget deficits caused by lower oil prices
Author: Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
Abstract:
Many oil-exporting countries are focusing on cutting spending, as well as increasing non-oil revenue, to reduce budget deficits caused by lower oil prices, according to a report from the International Monetary Fund.
Full text: Many oil-exporting countries are focusing on cutting spending, as well as increasing non-oil revenue, to reduce budget deficits caused by lower oil prices, according to a report from the International Monetary Fund. Some countries in the Middle East, North Africa and the Caucasus and Central Asia have announced ambitious plans to increase their non-oil sector's contribution to gross domestic product by at least 4%-6%, while others, such as Saudi Arabia, Azerbaijan and Algeria, have announced deep cuts to public spending. Some other major oil-dependent economies are cutting spending in different areas, though all have tended to protect public employment and wages. The IMF sees the trend of public-spending cuts continuing to bring budget deficits down. Protections on public jobs and wages may also be removed to enable further cutting, the IMF said. The Middle East and North Africa, or MENA, and the Caucasus and Central Asia, or CCA, combined are home to 11 of the world's top 20 hydrocarbon exporters, meaning the economies of these two regions are highly dependent on oil revenue. Many of the MENA and CCA oil exporters built up financial buffers during periods of high oil prices. In the past 15 years, annual growth averaged nearly 5% in the Gulf Cooperation Council countries, comprising Saudi Arabia, Kuwait, the United Arab Emirates, Oman, Qatar and Bahrain, and more than 8% in CCA oil-exporting states, allowing these countries to build up large fiscal reserves. But those reserves have been depleted as oil prices have fallen, economic growth has slowed and unemployment and deficits have grown. Fiscal deficits are unlikely to improve much this year for the countries in the GCC and Algeria because of even weaker oil prices, though these countries have reduced their budget spending, the IMF said. Fiscal deficits in the GCC and Algeria will average around 7% of GDP in 2021, while the cumulative debts for the countries will be around $900 billion for the years leading up to 2021, according to the IMF. The picture is brighter in the CCA, where cumulative debt will reach around $32 billion for the years up to 2021, because of higher projected oil production, such as in Kazakhstan. Growth in GCC countries and Algeria is forecast to slow to just 2.1% in 2016, compared with 3.6% in 2014. Lower oil prices will tighten fiscal spending, along with weaker confidence in the private sector and lower liquidity in the banking sector, the IMF said. It expects growth in CCA oil-exporting countries to drop to a two-decade low of 1.1% this year, compared with 5.4% in 2014, driven by lower oil production and cuts to public spending. Azerbaijan could slip into a recession, with GDP contracting by around 3% this year, but Kazakhstan is likely to avoid this scenario, the IMF said. There is also downside risk to growth in the oil-exporting countries in MENA and CCA from the budget deficit-reducing strategies they have adopted, the IMF said. These policies could either tighten fiscal spending at too fast a rate or reduce deficits at a slower-than-expected rate, both of which would have an adverse effect on economic growth. The budget deficit forecast for the GCC and Algeria region is set to be around 13% of GDP this year, compared with an 8.5% surplus in 2013, according to the IMF. For CCA oil exporters, the budget deficit is forecast to be 5% of GDP, compared with a 3.5% surplus in 2013. Write to Miriam Malek at Miriam.Malek@wsj.com Credit: By Miriam Malek
Subject: Economic growth; Budget deficits; Recessions; Petroleum production; Gross Domestic Product--GDP
Location: Azerbaijan Caucasus Algeria Central Asia Saudi Arabia North Africa Middle East
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794558018
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794558018?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Investor Still Bets on McClendon; EIG owns small stakes in 8,500 wells once held by the deceased oil titan
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 June 2016: n/a.
Abstract:
Related * Crash That Killed Aubrey McClendon Was Accident (June 8) * EIG Loses Bid to Have Intervention Bankruptcy Dismissed (June 6) * EIG Pulls Out of Pacific Exploration Deal (March 25) "The whole environment was set up on a greater-fool theory," EIG President William Sonneborn said in an interview, saying data from the wells suggested price tags on assets were rising beyond what the drilling could justify. EIG Chief Executive Blair Thomas has told some investors that despite the turn in their value, he expects the wells will eventually produce profits, according to documents from the Alaska Retirement Management Board, which invests with the firm.
Full text: As creditors line up for the assets of recently deceased oil titan Aubrey McClendon , an energy-investment firm already has claimed some of his most valuable holdings. EIG Global Energy Partners owns small stakes once held by Mr. McClendon in some 8,500 wells across the U.S. drilled by Chesapeake Energy Corp., the oil and gas producer that Mr. McClendon co-founded and ran until 2013. EIG lent Mr. McClendon more than $1.2 billion over several years to pay for his personal stake in the wells. It gained control of those stakes by foreclosing on the loans last year, after collecting cash and data from the properties since 2009. That trove of data about U.S. drilling helped EIG weather the oil downturn by prompting its executives to sell out of some oil-production investments they felt were richly priced ahead of the collapse in crude prices. Related * Crash That Killed Aubrey McClendon Was Accident (June 8) * EIG Loses Bid to Have Intervention Bankruptcy Dismissed (June 6) * EIG Pulls Out of Pacific Exploration Deal (March 25) "The whole environment was set up on a greater-fool theory," EIG President William Sonneborn said in an interview, saying data from the wells suggested price tags on assets were rising beyond what the drilling could justify. Investors, he said, seemed to think they could always sell the land for more. "That game of musical chairs has finally ended," he added. Formed in 1982 as the energy- and infrastructure-focused unit of the Los Angeles money manager now known at TCW Group Inc., EIG is one of the world's largest and oldest energy-investing firms. As of March, the firm, which became independent in 2011, managed $13.8 billion. Its investments include a Brazilian port, solar-power plants in South Africa, Indian wind farms, a Wyoming gas field and a Bolivia pipeline. It hasn't been immune to the 2014-2015 crash in oil prices. Among EIG's most significant write-downs have been Mr. McClendon's well interests, which were reduced more than 30% last year. EIG Chief Executive Blair Thomas has told some investors that despite the turn in their value, he expects the wells will eventually produce profits, according to documents from the Alaska Retirement Management Board, which invests with the firm. EIG also favors investing in debt linked to energy assets, a preference that has helped it endure collapses in commodity prices as equity typically gets wiped out in bankruptcies. The focus on debt helped EIG profit in its relationship with Mr. McClendon while many other investors lost money backing the famous wildcatter, who died in March in a single-car crash in Oklahoma City. The firm lent to Chesapeake when Mr. McClendon and his co-founder, Tom Ward, were starting it. The company technically defaulted within a year. But the Oklahoma wildcatters worked out a deal with EIG to stay afloat and eventually repaid the firm after Chesapeake's 1993 initial public offering. "Without [EIG], Chesapeake would have never been able to be a public company," Mr. Ward said in an interview. "Aubrey and I would have had to remain a small private company." Despite the rocky start, the relationship continued. When Mr. Ward left Chesapeake in 2006 and started a rival energy producer, SandRidge Energy Inc., EIG invested $50 million and made more than twice its money as SandRidge's stock soared after its initial public offering, according to documents from the Alaska fund. EIG cashed out before SandRidge's shares collapsed during the financial crisis. When SandRidge needed money to ride out the recession, it sold EIG a Texas pipeline system and then leased it back from the firm until buying it back last year, resulting in another big gain for EIG. SandRidge, which filed for bankruptcy last month, declined to comment. Meanwhile, Mr. McClendon, still at Chesapeake, had earlier struck an unusual deal with the company in which he had the option each year to personally co-invest in all wells Chesapeake drilled. By late 2008, as Chesapeake grew to be one of the country's most prolific drillers, Mr. McClendon needed cash for his share. EIG provided it for 2009 and 2010, and they repeated the pact twice more, eventually financing more than $1.2 billion. At the same time, EIG struck a pair of drilling joint ventures with Chesapeake in Oklahoma and Ohio. That Mr. McClendon was borrowing from EIG and other firms while they also financed Chesapeake was among the corporate-governance issues that led to his 2013 ouster. EIG and other lenders weren't accused of impropriety. Chesapeake said after Mr. McClendon announced his departure that an internal probe "did not reveal any improper benefit to Mr. McClendon or increased cost to the company as a result of the financial relationships." EIG also took an interest in one of Mr. McClendon's companies when he attempted a comeback. The company, now known as Permian Resources LLC, acquired prime drilling acreage in west Texas before oil prices crashed. When those price declines prompted a selloff in the closely held company's debt, EIG pounced. By January 2015, it had spent $205 million, buying debt at about 70% of its face value, according to the Alaska documents. EIG and another investor now hold 51% of Permian Resources' senior unsecured debt, said people familiar with the matter. If Permian Resources recovers, EIG will likely be rewarded by rising bond prices. If it falters, the debt offers EIG a good shot at walking away with Permian oil fields. Permian Resources declined to comment. "We try to structure things so we have more ways to win," Mr. Sonneborn said. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Bankruptcy; Prices; Investments; Executives; Recessions; Pipelines
Location: United States--US
Company / organization: Name: TCW Group Inc; NAICS: 523991, 551112; Name: Alaska Retirement Management Board; NAICS: 525110; Name: Chesapeake Energy Corp; NAICS: 211111; Name: EIG Global Energy Partners; NAICS: 523910
Publication title: Wall Street Journa l (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 8, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794667527
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794667527?accountid=7117
Copyright: (c ) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Edge Lower
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
Abstract:
Crude oil prices extended gains above $50 per barrel mark in early Asian trade Thursday as strong China imports aided positive trading sentiment amid the continuing supply outages in Nigeria and falling U.S. crude oil inventories.
Full text: 0802 GMT Oil prices dipped Thursday despite bullish U.S. inventory and continued outages in major oil producing countries, such as Nigeria. The August contract for global benchmark Brent is down 0.4% at $52.28 a barrel while its U.S. counterpart West Texas Intermediate is down 0.2% at $51.12 a barrel for July deliveries. U.S. crude inventories fell by 3.2 million barrels, but oil production rose by 10,000 barrels a day last week. With both benchmarks safely over $50 the markets are still engulfed with positive sentiment. However, the price dip could be profit taking as investors and traders decide to cash in. Write to kevin.baxter@wsj.com
Subject: Crude oil; Crude oil prices; Energy economics
Location: China United States--US Nigeria
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: OCBC Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794697635
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794697635?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Investor Still Bets on McClendon
Author: Dezember, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 June 2016: C.1.
Abstract:
Formed in 1982 as the energy- and infrastructure-focused unit of the Los Angeles money manager now known at TCW Group Inc., EIG is one of the world's largest and oldest energy-investing firms. EIG Chief Executive Blair Thomas has told some investors that despite the turn in their value, he expects the wells will eventually produce profits, according to documents from the Alaska Retirement Management Board, which invests with the firm.
Full text: As creditors line up for the assets of recently deceased oil titan Aubrey McClendon, an energy-investment firm already has claimed some of his most valuable holdings. EIG Global Energy Partners owns small stakes once held by Mr. McClendon in some 8,500 wells across the U.S. drilled by Chesapeake Energy Corp., the oil and gas producer that Mr. McClendon co-founded and ran until 2013. EIG lent Mr. McClendon more than $1.2 billion over several years to pay for his personal stake in the wells. It gained control of those stakes by foreclosing on the loans last year, after collecting cash and data from the properties since 2009. That trove of data about U.S. drilling helped EIG weather the oil downturn by prompting its executives to sell out of some oil-production investments they felt were richly priced ahead of the collapse in crude prices. "The whole environment was set up on a greater-fool theory," EIG President William Sonneborn said in an interview, saying data from the wells suggested price tags on assets were rising beyond what the drilling could justify. Investors, he said, seemed to think they could always sell the land for more. "That game of musical chairs has finally ended," he added. Formed in 1982 as the energy- and infrastructure-focused unit of the Los Angeles money manager now known at TCW Group Inc., EIG is one of the world's largest and oldest energy-investing firms. As of March, the firm, which became independent in 2011, managed $13.8 billion. Its investments include a Brazilian port, solar-power plants in South Africa, Indian wind farms, a Wyoming gas field and a Bolivia pipeline. It hasn't been immune to the 2014-2015 crash in oil prices. Among EIG's most significant write-downs have been Mr. McClendon's well interests, which were reduced more than 30% last year. EIG Chief Executive Blair Thomas has told some investors that despite the turn in their value, he expects the wells will eventually produce profits, according to documents from the Alaska Retirement Management Board, which invests with the firm. EIG also favors investing in debt linked to energy assets, a preference that has helped it endure collapses in commodity prices as equity typically gets wiped out in bankruptcies. The focus on debt helped EIG profit in its relationship with Mr. McClendon while many other investors lost money backing the famous wildcatter, who died in March in a single-car crash in Oklahoma City. The firm lent to Chesapeake when Mr. McClendon and his co-founder, Tom Ward, were starting it. The company technically defaulted within a year. But the Oklahoma wildcatters worked out a deal with EIG to stay afloat and eventually repaid the firm after Chesapeake's 1993 initial public offering. "Without [EIG], Chesapeake would have never been able to be a public company," Mr. Ward said in an interview. "Aubrey and I would have had to remain a small private company." Despite the rocky start, the relationship continued. When Mr. Ward left Chesapeake in 2006 and started a rival energy producer, SandRidge Energy Inc., EIG invested $50 million and made more than twice its money as SandRidge's stock soared after its initial public offering, according to documents from the Alaska fund. EIG cashed out before SandRidge's shares collapsed during the financial crisis. When SandRidge needed money to ride out the recession, it sold EIG a Texas pipeline system and then leased it back from the firm until buying it back last year, resulting in another big gain for EIG. SandRidge, which filed for bankruptcy last month, declined to comment. Meanwhile, Mr. McClendon, still at Chesapeake, had earlier struck an unusual deal with the company in which he had the option each year to personally co-invest in all wells Chesapeake drilled. By late 2008, as Chesapeake grew to be one of the country's most prolific drillers, Mr. McClendon needed cash for his share. EIG provided it for 2009 and 2010, and they repeated the pact twice more, eventually financing more than $1.2 billion. At the same time, EIG struck a pair of drilling joint ventures with Chesapeake in Oklahoma and Ohio. That Mr. McClendon was borrowing from EIG and other firms while they also financed Chesapeake was among the corporate-governance issues that led to his 2013 ouster. EIG and other lenders weren't accused of impropriety. Chesapeake said after Mr. McClendon announced his departure that an internal probe "did not reveal any improper benefit to Mr. McClendon or increased cost to the company as a result of the financial relationships." EIG also took an interest in one of Mr. McClendon's companies when he attempted a comeback. The company, now known as Permian Resources LLC, acquired prime drilling acreage in west Texas before oil prices crashed. When those price declines prompted a selloff in the closely held company's debt, EIG pounced. By January 2015, it had spent $205 million, buying debt at about 70% of its face value, according to the Alaska documents. "We try to structure things so we have more ways to win," Mr. Sonneborn said. Credit: By Ryan Dezember
Subject: Investments; Pipelines; Assets
Location: United States--US
People: McClendon, Aubrey
Company / organization: Name: Chesapeake Energy Corp; NAICS: 211111; Name: EIG Global Energy Partners; NAICS: 523910
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Jun 9, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794728085
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794728085?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi Aramco IPO: The Biggest Fee Event in Wall Street History; The IPO of the state-owned oil giant could generate as much as $1 billion in fees
Author: Farrell, Maureen; Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
Abstract:
The planned initial public offering of oil colossus Saudi Aramco has kicked off a scramble among banks for a role in a deal that could generate $1 billion in fees and help define success or failure on Wall Street for years to come.
Full text: The planned initial public offering of oil colossus Saudi Aramco has kicked off a scramble among banks for a role in a deal that could generate $1 billion in fees and help define success or failure on Wall Street for years to come. By virtually any measure, Saudi Arabian Oil Co., as it is formally known, is one of the largest enterprises on earth. Saudi Arabia has said the state-owned company could be worth $2 trillion to $3 trillion--roughly equal at its midpoint to the total market value of every other publicly traded oil and gas company in the world, according to S&P Global Market Intelligence. Ever since Saudi Arabia indicated in January that it's eyeing a public listing for Aramco, senior bankers at the world's largest financial institutions have been swarming around the company's headquarters in the coastal city of Dhahran seeking to ingratiate themselves with officials in the kingdom and win a piece of the biggest investment-banking deal ever. Likely winners include J.P. Morgan Chase & Co., which appears set to cash in on an eight-decade relationship with the country. It and other banks that land important roles on the offering could reap the benefits for years, as Saudi Arabia plans a modernization of its economy that will require copious funding. Those that miss out, meanwhile, may have less to fall back on as the new-issue market sputters along with other Wall Street businesses in the aftermath of the financial crisis. Some bankers have spent hours waiting to sit down with Chief Executive Amin Nasser or Chairman Khalid al-Falih, only to be told they would be meeting more junior Aramco officials instead, according to people familiar with the process. One who did win a recent meeting with Mr. Nasser in one of the company's off-white, stucco buildings said the CEO spent the hour extolling the promise of Saudi Arabia's economic transformation. Mr. Nasser made it clear that to win a role on the IPO, banks should consider financing big infrastructure projects aimed at moving the economy beyond its dependence on oil, this person said. Before leaving the compound, which is patrolled by police officers carrying M-16s, the banker said he was photographed extensively by Aramco's public-relations team. Saudi Aramco declined to comment for this article. The payoff for enduring such scrutiny is expected to be rich. The kingdom has indicated it could float as much as 5% of Aramco, which would mean proceeds of as much as $150 billion, and list it on multiple international exchanges. At that level, the IPO would blow past Alibaba Group Holding Ltd.'s $25 billion offering in 2014 as the biggest in history. Other benefits could be substantial, too. "This will give the winning banks tremendous credibility in the energy markets for all kinds of transactions," said David Wessels, director of executive education at the Wharton School of the University of Pennsylvania and a former McKinsey & Co. consultant. "Banks will have teams of their heaviest hitters on this." Underwriters typically earn fees of about 2% on deals over $10 billion, according to market-data provider Dealogic. Fees on privatizations tend to be lower, and Aramco is expected to drive a tough bargain. But even if the fee pool comes in well under 1%, as one person close to the deal said it might, it could still be as high as $1 billion. Other business could also follow, as key underwriters are typically well-positioned to trade the new securities; given the company's sheer size, the volume of turnover in Aramco shares could be immense. So far, only a small group of bankers, consultants and lawyers have done any direct work on the IPO or the government's National Transformation Program, a related plan to more than triple its non-oil revenue by 2020, people familiar with the matter said. Among them are J.P. Morgan; former Citigroup Inc. banker Michael Klein, who is viewed by the kingdom as an independent voice able to help navigate the process; consultants at McKinsey and Boston Consulting Group; and lawyers from White & Case LLP. There are plenty of risks for those chasing a piece of the bonanza. There is no guarantee there will be sufficient demand from investors to soak up all the shares--especially if the country's famously secret officials don't provide sufficient disclosure. Aramco could ultimately scale back its ambitions to a relatively modest listing on the Saudi exchange, one person said. Either way, shareholders are unlikely to directly own the kingdom's oil reserves, estimated at 261 billion barrels. Rather, the publicly traded vehicle is expected to have long-term rights to extract them, similar to other state-owned oil companies. The Saudi government is pursuing the IPO as part of a broad plan to decrease it dependence on the oil industry and to raise funds to diversify its economy. The country is also preparing its first of what's expected to be a series of international bond sales, which could take place as soon as July and raise as much as $15 billion, according to people familiar with the deal. The lead underwriters are likely to gain an edge in the IPO sweepstakes, they said. Saudi officials have told banks that haven't already lent money in the kingdom that they should consider doing so, the people said. Bankers expect Aramco to deliver a more detailed understanding of what assets will be included in the IPO and perhaps choose an underwriting team this summer. The company could work with more than a dozen banks but just six or fewer lead underwriters, a person familiar with the matter said. J.P. Morgan is widely expected to claim the lead underwriting role, people familiar with the matter said. It has been the main lender or part of a team of banks on almost all of Aramco's loans, according to Dealogic. It is known inside Saudi Arabia as "the kingdom's bank," and in recent months it played a lead role in assembling a $10 billion loan to the Saudi government. The relationship dates back to the 1930s, when predecessor Morgan Guaranty Trust Co. helped U.S. oil companies establish and strengthen operations there. J.P. Morgan Chief Executive James Dimon hasn't traveled to Saudi Arabia since late last year, but he regularly meets with top officials in other locales or talks to them by phone, people familiar with the matter said. The head of J.P. Morgan's corporate and investment bank, Daniel Pinto, and its investment-banking chief, Carlos Hernandez, travel to Saudi Arabia regularly to meet with Aramco and kingdom officials about the IPO and other projects, the people said. Citigroup, Deutsche Bank AG and HSBC Holdings PLC were part of a large consortium in the $10 billion revolving credit facility Aramco secured in March 2015. Potentially giving HSBC another leg up, the bank's CEO for the Middle East, Mohammad Al Tuwaijri, was recently named the Saudi deputy minister of economy. Bankers who had worked on projects in the region previously were doubtful when the first reports of an IPO emerged in January. Saudi Arabia has attempted to move its economy away from oil in weak markets in the past, but typically abandoned such efforts once prices rebounded. Any share sale is still likely at least a year away and there's no guarantee one will take place. Still, the fear of missing out is palpable on Wall Street. "The banks will pull out every stop to cater to this business," Wharton's Mr. Wessels said. Write to Maureen Farrell at maureen.farrell@wsj.com and Nicolas Parasie at nicolas.parasie@wsj.com Credit: By Maureen Farrell and Nicolas Parasie
Subject: Acquisitions & mergers; Investment bankers; Energy industry; Initial public offerings
Location: Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: Alibaba Group; NAICS: 454111, 519130, 551112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794777765
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794777765?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Retreats But Remains Near Highs; Supply outages, falling inventories limit price decline
Author: Kantchev, Georgi; Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
Abstract:
The U.S. Energy Information Administration reported Wednesday that domestic crude stockpiles declined by 3.2 million barrels last week--a sign of healthy demand for crude at the start of summer driving season.
Full text: Oil prices pulled back Thursday as the dollar strengthened, but crude remained near 10-month highs amid supply outages and falling U.S. inventories. The U.S. oil benchmark ended down 1.3% at $50.56 a barrel on the New York Mercantile Exchange, while the global Brent contract fell 1.1% to $51.95 a barrel on the ICE Futures Europe exchange. Both contracts have surged more than 80% from multiyear lows this year as production cuts and outages have spurred hope that the global crude glut that has weighed on the markets for the last two years is finally beginning to abate. Analysts said there was little in the way of supply-and-demand fundamentals driving the market Thursday, and that the move appeared to be tied to the gains in the dollar, which rose after weak inflation data in China stoked expectations for more stimulus measures there. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, was up 0.3% on Thursday. As oil is priced in dollars, it becomes more expensive for holders of other currencies when the dollar appreciates. "The key driver was the dollar and concerns about the dollar," said Phil Flynn, an account executive at Chicago brokerage Price Futures Group. "We're stabilizing to see what happens next." Still, falling U.S. inventories and production outages in Nigeria continue to support oil prices. "The existing momentum, the market sentiment, the absence of any bearish news and the still sizable supply outages suggest that the price rise will continue," analysts at Commerzbank said in a note to clients. The U.S. Energy Information Administration reported Wednesday that domestic crude stockpiles declined by 3.2 million barrels last week--a sign of healthy demand for crude at the start of summer driving season. "We expect U.S. inventory draws to accelerate this summer," said analysts at Credit Suisse. "We remain very optimistic on American motorist consumption of gasoline this summer." The inventory declines are keeping oil bulls happy, said analysts at PVM brokerage, adding that prices are also receiving support from the continuing unrest in Nigeria, one of Africa's largest oil producers. The militant group Niger Delta Avengers has vowed to shut the country's oil operations. Multiple attacks on key pipelines and facilities have reduced Nigeria's daily oil output to around 1 million barrels. "Nigeria is facing a double whammy as the recent unrest and supply disruptions now make buyers of the country's oil turn away because they fear delivery difficulties," said Michael Poulsen, oil analyst at Global Risk management. In refined product markets, gasoline futures fell 0.1% to $1.6186 a gallon, and diesel futures fell 1.2% to $1.5512 a gallon. Write to Georgi Kantchev at georgi.kantchev@wsj.com and Christian Berthelsen at christian.berthelsen@wsj.com Credit: By Georgi Kantchev and Christian Berthelsen
Subject: Supply & demand; Inventory; Futures; Price increases
Location: United States--US Nigeria
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794785319
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794785319?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Statoil Expects Tighter Oil Market; Significant investment needed to offset falling output from existing fields
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
Abstract:
Presenting Statoil's annual energy outlook, "Energy Perspectives," Mr. Waerness said even in a low-carbon environment where global oil demand drops in the coming decades, oil companies must make huge investments to offset the natural production decline in aging fields.
Full text: OSLO--Norway's Statoil ASA said Thursday that it expected the oil market to tighten in the next couple of years, which may cause price spikes, adding that significant investment is needed to offset falling output from existing fields even if oil demand will be lower. "There is a lot of oil in storage, but within two to three years markets will be tightening significantly," said Statoil's chief economist Eirik Waerness. "The question is whether the pace of investment is sufficient to deliver the new [oil] supply that is needed. You can't rule out that you'll get a price spike." Presenting Statoil's annual energy outlook, "Energy Perspectives," Mr. Waerness said even in a low-carbon environment where global oil demand drops in the coming decades, oil companies must make huge investments to offset the natural production decline in aging fields. "Today's existing fields are nowhere near being able to produce what we need in 2040," said Mr. Waerness. "There's a gap that needs to be filled." Statoil expects the output of currently producing fields across the globe to drop to between 20 million and 50 million barrels a day by 2040 from around 95 million barrels a day last year, assuming an annual production decline of between 3% and 6%. Even if global oil demand fell to 80 million barrels a day by 2040, Statoil and its peers would still have to find and develop fields with an additional production capacity of between 30 million and 60 million barrels a day to fill the supply gap left by aging fields, Mr. Waerness said. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Demand; Oil consumption
Location: Norway
Company / organization: Name: Statoil ASA; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794793751
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794793751?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil and China: 'Teapots' Mean Real Demand Not So Stout; So-called teapot refineries have made it even trickier to peer through China's already muddy oil-demand picture.
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
Abstract:
China's rising crude oil imports may be nothing more than a tempest in a teapot.
Full text: China's rising crude oil imports may be nothing more than a tempest in a teapot. China's so-called teapot refineries--smaller, private outfits that operate outside the state-owned petroleum industrial complex--have taken center stage of late . Their emergence has made it even trickier to peer through China's already muddy oil-demand picture. On the surface, it seems Chinese demand should take some credit for driving global crude prices higher. Trade data this week showed that in May, the world's No. 2 economy imported 39% more crude by volume than a year before. Part of this is because May last year was a weak month. A bigger factor were the teapot refineries, who are in possession of new government quotas to import crude. Between January and April, teapots accounted for 15% of China's crude import volume, Citigroup says. Many teapot units went offline in May, but because these refineries typically run at 50% utilization--compared with 70% to 80% for established refiners--a teapot company could shut down one unit and ramp up utilization at second to compensate, according to Energy Aspects, a London-based consultancy. This suggests that China's appetite for importing crude will stay strong regardless of refinery maintenance schedules. That should please crude sellers. The bigger question is what China does with all this crude once it is refined. Analysts can impute China's final oil demand by adding together refinery output, net trade in products and changes in inventories. This has always been an imprecise exercise, thanks to the country's opaque inventory figures . Some analysts now reckon the official data don't capture new teapot activity. That means refinery runs, and hence underlying demand, could be higher than thought. Yet that doesn't mean oil bulls can rejoice. Even if demand is today higher than previously assumed, there is a strong indication that supply of refined products is even higher and isn't fully getting absorbed at home. As evidence, China has exported more products than it imported every single month, not the case this time last year. In May, net exports were almost seven times what they were a year ago. China's state refineries started this trend two years ago of guzzling crude, and re-exporting refined products, chiefly diesel. Thanks to the teapots' increased capacity, China has also begun exporting more gasoline. In the first four months of the year, China's average daily gasoline exports were a third higher than in all of 2015, according to Energy Aspects. That will pressure gasoline prices across Asia. Just because the teapots are active, doesn't mean that China is the factor that will keep oil prices aloft. Write to Abheek Bhattacharya at abheek.bhattacharya@wsj.com Credit: By Abheek Bhattacharya
Subject: International trade; Gasoline prices; Petroleum refineries; Crude oil
Location: China
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
column: Heard on the Street
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794813092
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794813092?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Schlumberger Appoints Former BG, Statoil Boss to Board; Appointment come as the slump in crude prices has hit the fortunes of the oil-services sector hard
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
Abstract: None available.
Full text: LONDON--Oil-services giant Schlumberger Ltd. has appointed Helge Lund to its board, taking on the former CEO of BG Group PLC just months after the British oil and natural gas producer was acquired by Royal Dutch Shell PLC in a roughly $50 billion deal . The appointment of Mr. Lund by Schlumberger comes as major oil and gas producers such as Shell have cut back heavily on capital spending and other costs in the face of lower oil prices, with serious knock-on effects on the oil-services sector. Schlumberger has cut around 36,000 jobs , or 28% of its workforce, since November 2014. The Shell-BG deal, which completed in February this year, was engineered by BG's Executive Chairman Andrew Gould, the former head of Schlumberger and one of the biggest names in the oil industry. Mr. Lund, 53, became CEO of BG in February last year, only a few weeks before Shell moved in with its offer for the company. Mr. Lund came to BG from Norway's Statoil ASA, where he won praise as a skillful executive, forcing the Norwegian company over his 10-year tenure as CEO to drill across the world while also revitalizing its work in the home country's continental shelf. When Mr. Lund took up the helm at BG last year, the company had been roiled by years of under delivery on its own output and profit targets and turmoil at the top level at the company which had been without a CEO for almost a year. Last year, the U.K.'s third largest oil and natural gas firm finally came into its own: The cash started rolling in as its massive LNG project in Australia came online, production ramped up in Brazil and a phase of mega investment ended. While investors welcomed Mr. Lund's appointment at BG, his generous compensation package immediately drew controversy. Shareholders objected to a share award, valued at the time at £12 million ($17.4 million), for the incoming Mr. Lund in what became one of the biggest revolts over executive pay in the U.K. in recent years. BG eventually bowed to investor pressure and scrapped the share award. There had been some speculation about what Mr. Lund would do after the Shell-BG deal closed. He had always said he wasn't seeking a role at the new combined company and would move on from BG once the deal completed Schlumberger said in a statement that Mr. Lund will serve as a director until the next annual general meeting. The board hasn't yet determined which committees Mr. Lund will be assigned to. Write to Selina Williams at selina.williams@wsj.com Corrections & Amplifications Schlumberger has appointed Helge Lund to its board. An earlier version of this article misstated that he had been appointed CEO. (June 9, 2016) Credit: By Selina Williams
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794831574
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794831574?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Nigeria's March Oil Output Fell to Its Lowest Level in 12 Months; Production was driven lower by vandalism on crude pipelines
Author: Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
Abstract:
The lack of supply from Nigeria has helped push oil prices well-above $50 a barrel in the past week for both the global benchmark, Brent, and its U.S. counterpart, West Texas Intermediate.
Full text: LONDON--Nigerian crude oil production has dropped to its lowest monthly level since records began in April 2015, according to data from the Nigerian National Petroleum Corporation. Output stood at 57.43 million barrels for March, or just over 1.8 million barrels a day, according to NNPC's monthly review. The production figure is down more than 3% from the over 2 million barrels a day recorded in the previous month. Angola has now overtaken Nigeria as the continent's largest crude exporter. Production was driven lower by vandalism on crude pipelines , with around 380,000 barrels per day of production hit from Feb. 15 following an attack on a sub-sea export pipeline. This led to the deferral of all March oil export cargoes. Last week, ahead of a meeting between the Organization of Petroleum Exporting Countries, Nigerian Oil Minister Emmanuel Ibe Kachikwu said that NNPC had met with militants to try and resolve the situation. Meanwhile, Nigeria continues to battle with fuel scarcity issues. Vandalism has affected power supply in the country as the Forcados gas pipeline remains out of action, limiting electricity generation. Mr. Kachikwu has said he expects Forcados to return on-stream at the end of August. The lack of supply from Nigeria has helped push oil prices well-above $50 a barrel in the past week for both the global benchmark, Brent, and its U.S. counterpart, West Texas Intermediate. Write to Miriam Malek at Miriam.Malek@wsj.com Credit: By Miriam Malek
Subject: Pipelines; Supply & demand; Petroleum production
Location: Angola Nigeria
People: Kachikwu, Emmanuel Ibe
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794831587
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794831587?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oman Government Sells $2.5 Billion of Global Bonds; First global bonds issued by the oil producing gulf state since 1997
Author: Cui, Carolyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
Abstract:
Citigroup Inc., J.P. Morgan Chase & Co., Mitsubishi UFJ Financial Group Inc., National Bank of Abu Dhabi and Natixis were the underwriters for the sale.
Full text: The Oman government sold $2.5 billion of bonds Wednesday, becoming the latest Persian Gulf state to tap the debt markets in a move to shore up its budget during a period of low oil prices. The bond deal represented the country's first issuance in the international debt market in nearly two decades. The government sold five-year notes at a coupon rate of 3.625% and 10-year ones at 4.75%, according to a person familiar with the deal. Yields on both portions came in lower than initial indications to investors, reflecting strong demand from both regional and international buyers. Total demand was about $7 billion, this person said. This year, Middle Eastern governments have raised $20 billion from international debt markets, already a record year for debt issuance, according to data provider Dealogic. Abu Dhabi and Qatar tapped the markets earlier this year, raising $5 billion and $9 billion, respectively, while Kuwait is expected to issue $5 billion of debt in the weeks ahead. Saudi Arabia, meanwhile, has indicated plans to sell $15 billion in global debt. That would be one of the largest sales ever by a developing country. Oman is the largest Middle East oil producer outside of the Organization of the Petroleum Exporting Countries. With oil and gas contributing about 85% to government revenue, Oman was hit hard by the plunge in the price of oil since mid-2014. Even after the government took steps to cut expenditures and remove fuel subsidies, Oman faces a 17% budget deficit for this year. The government tapped its foreign reserves, which stood at $17.5 billion last year, according to the International Monetary Fund, and borrowed from local and foreign banks before turning to the debt markets. "It's a good deal, but the pricing is not cheap," said Anita Yadav, head of fixed-income research at Emirates NBD, a Dubai-based bank, referring to the Oman bonds. She said the yield on Oman's 10-year note is higher than on debt sold by Indonesia, which has a lower credit rating. The Indonesian securities yield 3.84%, while the Oman yield is about 4.72%, near the coupon rate. Citigroup Inc., J.P. Morgan Chase & Co., Mitsubishi UFJ Financial Group Inc., National Bank of Abu Dhabi and Natixis were the underwriters for the sale. Write to Carolyn Cui at carolyn.cui@wsj.com Credit: By Carolyn Cui
Subject: Investment bankers; Bond issues; International finance
Location: Qatar Oman Abu Dhabi United Arab Emirates Persian Gulf
Company / organization: Name: Mitsubishi UFJ Financial Group Inc; NAICS: 522110; Name: Citigroup Inc; NAICS: 551111; Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794837505
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794837505?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Investor Still Bets on McClendon; EIG owns small stakes in 8,500 wells once held by the deceased oil titan
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
Abstract:
Formed in 1982 as the energy- and infrastructure-focused unit of the Los Angeles money manager now known at TCW Group Inc., EIG is one of the world's largest and oldest energy-investing firms. EIG Chief Executive Blair Thomas has told some investors that despite the turn in their value, he expects the wells will eventually produce profits, according to documents from the Alaska Retirement Management Board, which invests with the firm.
Full text: As creditors line up for the assets of recently deceased oil titan Aubrey McClendon , an energy-investment firm already has claimed some of his most valuable holdings. EIG Global Energy Partners owns small stakes once held by Mr. McClendon in some 8,500 wells across the U.S. drilled by Chesapeake Energy Corp., the oil and gas producer that Mr. McClendon co-founded and ran until 2013. EIG lent Mr. McClendon more than $1.2 billion over several years to pay for his personal stake in the wells. It gained control of those stakes by foreclosing on the loans last year, after collecting cash and data from the properties since 2009. That trove of data about U.S. drilling helped EIG weather the oil downturn by prompting its executives to sell out of some oil-production investments they felt were richly priced ahead of the collapse in crude prices. "The whole environment was set up on a greater-fool theory," EIG President William Sonneborn said in an interview, saying data from the wells suggested price tags on assets were rising beyond what the drilling could justify. Investors, he said, seemed to think they could always sell the land for more. "That game of musical chairs has finally ended," he added. Formed in 1982 as the energy- and infrastructure-focused unit of the Los Angeles money manager now known at TCW Group Inc., EIG is one of the world's largest and oldest energy-investing firms. As of March, the firm, which became independent in 2011, managed $13.8 billion. Its investments include a Brazilian port, solar-power plants in South Africa, Indian wind farms, a Wyoming gas field and a Bolivia pipeline. It hasn't been immune to the 2014-2015 crash in oil prices. Among EIG's most significant write-downs have been Mr. McClendon's well interests, which were reduced more than 30% last year. EIG Chief Executive Blair Thomas has told some investors that despite the turn in their value, he expects the wells will eventually produce profits, according to documents from the Alaska Retirement Management Board, which invests with the firm. EIG also favors investing in debt linked to energy assets, a preference that has helped it endure collapses in commodity prices as equity typically gets wiped out in bankruptcies. The focus on debt helped EIG profit in its relationship with Mr. McClendon while many other investors lost money backing the famous wildcatter, who died in March in a single-car crash in Oklahoma City. The firm lent to Chesapeake when Mr. McClendon and his co-founder, Tom Ward, were starting it. The company technically defaulted within a year. But the Oklahoma wildcatters worked out a deal with EIG to stay afloat and eventually repaid the firm after Chesapeake's 1993 initial public offering. "Without [EIG], Chesapeake would have never been able to be a public company," Mr. Ward said in an interview. "Aubrey and I would have had to remain a small private company." Despite the rocky start, the relationship continued. When Mr. Ward left Chesapeake in 2006 and started a rival energy producer, SandRidge Energy Inc., EIG invested $50 million and made more than twice its money as SandRidge's stock soared after its initial public offering, according to documents from the Alaska fund. EIG cashed out before SandRidge's shares collapsed during the financial crisis. When SandRidge needed money to ride out the recession, it sold EIG a Texas pipeline system and then leased it back from the firm until buying it back last year, resulting in another big gain for EIG. SandRidge, which filed for bankruptcy last month, declined to comment. Meanwhile, Mr. McClendon, still at Chesapeake, had earlier struck an unusual deal with the company in which he had the option each year to personally co-invest in all wells Chesapeake drilled. By late 2008, as Chesapeake grew to be one of the country's most prolific drillers, Mr. McClendon needed cash for his share. EIG provided it for 2009 and 2010, and they repeated the pact twice more, eventually financing more than $1.2 billion. At the same time, EIG struck a pair of drilling joint ventures with Chesapeake in Oklahoma and Ohio. That Mr. McClendon was borrowing from EIG and other firms while they also financed Chesapeake was among the corporate-governance issues that led to his 2013 ouster. EIG and other lenders weren't accused of impropriety. Chesapeake said after Mr. McClendon announced his departure that an internal probe "did not reveal any improper benefit to Mr. McClendon or increased cost to the company as a result of the financial relationships." EIG also took an interest in one of Mr. McClendon's companies when he attempted a comeback. The company, now known as Permian Resources LLC, acquired prime drilling acreage in west Texas before oil prices crashed. When those price declines prompted a selloff in the closely held company's debt, EIG pounced. By January 2015, it had spent $205 million, buying debt at about 70% of its face value, according to the Alaska documents. EIG and another investor now hold 51% of Permian Resources' senior unsecured debt, said people familiar with the matter. If Permian Resources recovers, EIG will likely be rewarded by rising bond prices. If it falters, the debt offers EIG a good shot at walking away with Permian oil fields. Permian Resources declined to comment. "We try to structure things so we have more ways to win," Mr. Sonneborn said. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Prices; Investments; Executives; Recessions; Pipelines
Location: United States--US
Company / organization: Name: TCW Group Inc; NAICS: 523991, 551112; Name: Alaska Retirement Management Board; NAICS: 525110; Name: Chesapeake Energy Corp; NAICS: 211111; Name: EIG Global Energy Partners; NAICS: 523910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1794906945
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1794906945?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Sabine Oil & Gas Prepares for Lengthy Trial on Chapter 11 Plan
Author: Corrigan, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 June 2016: n/a.
Abstract:
To tighten their grip on the direction of the case, they also filed court papers Thursday asking Judge Chapman to extend their so-called exclusivity period, a common privilege in chapter 11 cases that bars creditors from proposing competing restructuring plans, through Oct. 7.
Full text: Sabine Oil & Gas Corp., a portfolio company of First Reserve Corp., and the creditors it has fought for nearly a year in bankruptcy court set aside seven days for a final showdown over its multibillion-dollar restructuring plan. Lawyers for Sabine will ask Judge Shelley Chapman of the U.S. Bankruptcy Court in Manhattan for final approval of the proposal at a hearing scheduled to begin Monday. During the hearing, which promises to be both lengthy and contentious, Sabine will face off against a group of creditors slated to be repaid less than 2% of what they are owed. Each side has agreed to limit itself to 24 hours of arguments and testimony spread out over at least seven days. Court papers filed earlier this week show Sabine and its creditors failed to reach any compromises during a last-ditch attempt to hammer out a broad settlement that could have resolved a long list of objections, appeals and other disputes that have taken center stage during the bankruptcy. Judge Robert Drain, a court-appointed mediator, said flatly in court papers that there is "no prospect of a mediated settlement." Sabine filed for chapter 11 protection last summer with a plan to restructure some $3 billion in debt, which has already survived a number of hard-fought legal challenges from creditors. If approved, the restructuring proposal would wipe out more than $2.5 billion of that debt and leave the oil company with access to at least $200 million in cash. In exchange, top-ranking lenders would take control of about 93% of the equity in the reorganized business. In court papers, lawyers for Sabine called the plan "a significant accomplishment" and said they were confident it would be approved. To tighten their grip on the direction of the case, they also filed court papers Thursday asking Judge Chapman to extend their so-called exclusivity period, a common privilege in chapter 11 cases that bars creditors from proposing competing restructuring plans, through Oct. 7. Unsecured creditors say "fundamental flaws" in the valuation of Sabine's assets tilt the plan in favor of senior lenders and have asked the judge to reject it. Creditors, who have pushed for a sale of the business, also say oil prices have increased significantly since Sabine's experts last valued its assets. Unsecured creditors, owed about $1.4 billion, say Sabine has burned through about a quarter of a billion dollars in cash to craft a plan that ultimately leaves then with equity valued at about $6.8 million. Judge Chapman on Thursday hinted that her final decision on Sabine's plan could be complicated. "It's going to take a fair amount of work to give you a decision," she said during a preliminary hearing Thursday. "There's a lot of moving parts." Houston-based Sabine, formerly NFR Energy LLC, was formed in 2007 as a joint venture between First Reserve and Nabors Industries Ltd. Nabors later exited its stake. Write to Tom Corrigan at tom.corrigan@wsj.com Credit: By Tom Corrigan
Subject: Bankruptcy; Bankruptcy reorganization; Court hearings & proceedings; Federal courts
Company / organization: Name: First Reserve Corp; NAICS: 523920; Name: Sabine Oil & Gas Corp; NAICS: 211111, 211112; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 9, 2016
Section: Pro Private Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795280001
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795280001?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Retreat on Stronger Dollar Ahead of FOMC Meeting; August Brent crude fell 20 cents to $51.75 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 June 2016: n/a.
Abstract:
Crude-oil prices surrendered earlier gains in midday Asian trading Friday on a stronger U.S. dollar, as investors trimmed risk positions ahead of next week's Federal Reserve meeting where the future direction of U.S. interest rates will be deliberated.
Full text: Crude-oil prices surrendered earlier gains in midday Asian trading Friday on a stronger U.S. dollar, as investors trimmed risk positions ahead of next week's Federal Reserve meeting where the future direction of U.S. interest rates will be deliberated. An upswing in the greenback usually doesn't sit well with oil traders who deal in foreign currencies because oil prices are pegged to the dollar. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.09% at 86.12. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $50.33 a barrel at 0445 GMT, down 23 cents in the Globex electronic session. August Brent crude on London's ICE Futures exchange fell 20 cents to $51.75 a barrel. Oil prices were buoyed earlier today as the latest decrease in U.S. crude stockpiles and continuing supply outages strengthen the view that the oil market is veering toward a deficit. The Energy Information Administration on Wednesday reported U.S. crude stocks fell 3.2 million barrels in the week ended June 3. While total volume is still near an 80-year high, the steady downtrend is a reflection of greater demand as U.S. enters its annual driving season. Unplanned supply outages in recent months wiped out more than 3.6 million barrels a day in May, the highest monthly level recorded since the EIA started tracking global disruptions in 2011. "From April to May, disruptions grew by 0.8 million barrels a day as increased outages, largely in Canada, Nigeria, Iraq, and Libya, more than offset reduced outages in Kuwait, Brazil, and Ghana," the agency says, but notes the outage will start to wane as Canada has gradually restarted its oil operations. The shrinking global supply reinforces expectation that the global oil market is rebalancing, analysts said. Although inventories of crude and refined products remain very high, supplies outside of the Organization of the Petroleum Exporting Countries is ebbing. "Based on this, as well as solid global demand, we anticipate slight global stockdraws in the second half of this year, and significantly bigger global stockdraws next year," said Societe Generale in a note. It estimates global demand to growth at 1.3 million barrels a day this year and 1.4 million barrels a day in 2017, mainly driven by China and India. In May, China's crude imports rose 7.9% on-year to 7.6 million barrels a day. For the first three months of the year, India's refined fuel consumption surged by 10% on-year to 4.35 million barrels day, according to the International Energy Agency. Investors are watching how U.S. shale producers will react to the higher prices. Some analysts are of the view that as China continues to pump out more products, refining margins will shrink as the region faces a glut of products. This would likely result in a deceleration in China's oil import. "With crude prices consolidating over the $50 support level and increased competition between Asian refiners for exports, it is hard to get very bullish on Chinese demand or refining margins," said John Driscoll, director of the Singapore-based JTD Energy Services and a former oil trader. Market participants will be watching the weekly U.S. oil-rig count from industry group Baker Hughes Inc. later today. Last week, U.S. rig count increased by nine. "While it is still well short of what is required to maintain U.S. output at current levels, any further increase could dampen the market's expectations of declines in U.S. production," said Daniel Hynes, senior commodity strategist at ANZ Research. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 53 points to $1.6133 a gallon, while July diesel traded at $1.5482, 30 points lower. ICE gasoil for June changed hands at $459.25 a metric ton, down 25 cents from Thursday's settlement. Credit: By Jenny Hsu
Subject: Supply & demand; Crude oil prices; Price increases; American dollar
Location: China United States--US Canada
Company / organization: Name: Societe Generale; NAICS: 522110, 522120, 523110, 523120; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 10, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795326174
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795326174?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Niger Delta Militants Say They Blew Up Eni Pipeline; Attack marks another major setback for Nigeria's battered oil industry
Author: Malek, Miriam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 June 2016: n/a.
Abstract:
LONDON--Niger Delta militants known as the Niger Delta Avengers have claimed responsibility for a major attack on a crude oil pipeline in Nigeria's Bayelsa State run by Eni's Agip subsidiary.
Full text: LONDON--Niger Delta militants known as the Niger Delta Avengers have claimed responsibility for a major attack on a crude oil pipeline in Nigeria's Bayelsa State run by Eni's Agip subsidiary. Eni couldn't immediately be reached for comment. The attack on the Obi Obi Brass trunk line occurred at 3 a.m. local time, according to a statement on the militant group's official Twitter account. The attack is one of several in recent weeks by militants in the region who are targeting Nigeria's oil infrastructure. The militants accuse the government of stealing the resources in the Niger Delta region. Friday's attack marks one more blow for the industry, which has suffered repeated setbacks in trying to restore supply. The Nigerian National Oil Corporation, known as NNPC, said in its monthly results this week that production had hit a 12-month low since the beginning of its review period in April 2015. NNPC said Nigerian output stood at around 1.8 million barrels a day in March, and that figure is likely now significantly lower. Some analysts have estimated it now stands at around one million barrels a day. Nigerian oil minister Emmanuel Ibe Kachikwu, met with militants in May in an attempt to prevent the oil attacks, but talks were unsuccessful. Tighter supply from Nigeria has boosted prices above $50 a barrel for most of this week. The Niger Delta Avengers have said that they hope to reduce the country's output to zero. Buyers are also looking elsewhere to buy their crude because of delivery fears associated with Nigerian cargoes, according to analysts at Copenhagen-based Global Risk Management. Write to Miriam Malek at Miriam.Malek@wsj.com Credit: By Miriam Malek
Subject: Foreign investment; Militancy
Location: Nigeria Niger Delta
People: Kachikwu, Emmanuel Ibe
Company / organization: Name: Twitter Inc; NAICS: 519130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 10, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795439325
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795439325?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oman Joins Oil Rivals Selling Debt
Author: Cui, Carolyn
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 June 2016: C.1.
Abstract:
Citigroup Inc., J.P. Morgan Chase & Co., Mitsubishi UFJ Financial Group Inc., National Bank of Abu Dhabi and Natixis were the underwriters.
Full text: The Oman government sold $2.5 billion of bonds Wednesday, becoming the latest Persian Gulf state to tap the debt markets in a move to shore up its budget during a period of low oil prices. The bond deal represented the country's first issuance in the international debt market in nearly two decades. The government sold five-year notes at a coupon rate of 3.625% and 10-year ones at 4.75%, according to a person familiar with the deal. Yields on both portions came in lower than initial indications to investors, reflecting strong demand from both regional and international buyers. Total demand was about $7 billion, this person said. This year, Middle Eastern governments have raised $20 billion from international debt markets, already a record year for debt issuance, according to data provider Dealogic. Abu Dhabi and Qatar tapped the markets earlier this year, raising $5 billion and $9 billion, respectively, while Kuwait is expected to issue $5 billion of debt in the weeks ahead. Saudi Arabia has indicated plans to sell $15 billion in global debt. That would be one of the largest sales ever by a developing country. Oman is the largest Middle East oil producer outside of the Organization of the Petroleum Exporting Countries. With oil and gas contributing about 85% to government revenue, Oman was hit hard by the plunge in the price of oil since mid-2014. Even after the government took steps to cut expenditures and remove fuel subsidies, Oman faces a 17% budget deficit for this year. The government tapped its foreign reserves, which stood at $17.5 billion last year, according to the International Monetary Fund, and borrowed from local and foreign banks. "It's a good deal, but the pricing is not cheap," said Anita Yadav, head of fixed-income research at Emirates NBD, a Dubai-based bank, referring to the Oman bonds. She said the yield on Oman's 10-year note is higher than on debt sold by Indonesia, which has a lower credit rating. The Indonesian securities yield 3.84%, while the Oman yield is about 4.72%, near the coupon rate. Citigroup Inc., J.P. Morgan Chase & Co., Mitsubishi UFJ Financial Group Inc., National Bank of Abu Dhabi and Natixis were the underwriters. Credit: By Carolyn Cui
Subject: Investment bankers; Bond issues; International finance
Location: Oman
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2016
Publication date: Jun 10, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: Englis h
Document type: News
ProQuest document ID: 1795448193
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795448193?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall Below $50 as Drilling Data Show Uptick; Number of rigs drilling for oil in the U.S. rose by three this week
Author: Frie dman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 June 2016: n/a.
Abstract:
Oil prices have rallied by around 90% since hitting decade lows this year after supply outages around the world fueled expectations that the global oversupply of crude would shrink faster than expected.
Full text: U.S. oil prices fell below $50 a barrel on Friday as U.S. drilling data showed an uptick in activity. Oil prices have rallied by around 90% since hitting decade lows this year after supply outages around the world fueled expectations that the global oversupply of crude would shrink faster than expected. However, some market watchers warn that the sharp rally could encourage producers to increase output, keeping the market oversupplied. U.S. oil for July delivery settled down $1.49, or 2.9%, at $49.07 a barrel on the New York Mercantile Exchange. The contract rose 0.9% this week. Brent, the global benchmark, fell $1.41, or 2.7%, to $50.54 a barrel on ICE Futures Europe. Prices rose 1.8% on the week. The number of rigs drilling for oil in the U.S. rose by three this week, the second straight increase, Baker Hughes Inc. said Friday. Domestic production has declined in recent months as low oil prices prompted companies to cut spending on new drilling. But with prices now at levels that make drilling economical for some firms, analysts say the rig count might continue to rise and U.S. production declines might slow. This could, in turn, threaten the price recovery. "U.S. production should at least stabilize out and not continue going lower," said Tariq Zahir, managing member of Tyche Capital Advisors. "It's the beginning of a trend, and if it continues to happen...I think the risk is to the downside" for prices, he said. Harold Hamm, chief executive of Continental Resources Inc., told Bloomberg News late Thursday that his company has started completing its backlog of previously drilled wells, which should add new production to the market. Still, analysts say that a spate of supply outages from Nigeria to Canada will continue to support prices. Disruptions have taken more than 3 million barrels off the oversupplied market in recent weeks. Gasoline futures fell 5.9 cents, or 3.6%, to $1.5596 a gallon, a one-month low. Prices lost 3% this week. Diesel futures fell 3.52 cents, or 2.3%, to $1.5160 a gallon Friday but rose 1.9% on the week. Write to Nicole Friedman at nicole.friedman@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Nicole Friedman and Georgi Kantchev
Subject: Prices; Chemical industry; Drilling
Location: United States--US
People: Hamm, Harold
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Bloomberg News; NAICS: 519110; Name: Continental Resources Inc; NAICS: 211111; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 10, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795448220
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docvie w/1795448220?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Mexican Industrial Production Declines in April; Production of oil, gas and metals fell for the month, and construction activity was lower
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 June 2016: n/a.
Abstract:
Manufacturers produced 0.7% less in April than in March, affected by a soft patch in the auto industry and by weakness in U.S. manufacturing, which drives much of the demand for Mexican factory exports.
Full text: MEXICO CITY--Mexican industrial production fell in April for a third consecutive month amid weakness across sectors, the National Statistics Institute said Friday. Industrial production fell 0.7% seasonally adjusted from March, its third straight decline and sixth in the past seven months. Output rose 1.9% from April of 2015, helped by a positive calendar effect as the Easter holiday was in March this year, giving April more working days than a year ago. Production had been expected to rise 1.5% from a year before, according to the median estimate of nine economists polled by The Wall Street Journal. Manufacturers produced 0.7% less in April than in March, affected by a soft patch in the auto industry and by weakness in U.S. manufacturing, which drives much of the demand for Mexican factory exports. Production of oil, gas and metals fell in April, and construction activity was lower, while utilities output rose from March. Mexico's industrial production in the first four months of the year was up 0.8%, marking a slowdown from 2015 when output for the full year grew 1%. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Subject: Industrial production; Production capacity
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 10, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795502122
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795502122?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Mexico's Pemex OKs Plan for First Production Partnership; State oil company to seek partners to develop Trion field in Gulf of Mexico
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 June 2016: n/a.
Abstract: None available.
Full text: MEXICO CITY--Cash-strapped Mexican state oil company Petróleos Mexicanos approved Friday a plan to take on partners to develop oil reserves in deep waters of the Gulf of Mexico. It would be the first time that Pemex joins with private firms for exploration and production, and follows constitutional changes made in 2013 that opened the oil-and-gas industry to private and foreign companies after more than seven decades of state control. "We think this is a landmark in Pemex's history, and an important step in the implementation of the energy reform," Pemex Chief Executive José Antonio González Anaya said at a press conference. Hit by low oil prices, Pemex is cutting its budget this year by about $5.5 billion, or 20%, and expects spending and investment restraints in coming years. Mr. González Anaya said Pemex will seek partners to develop the Trion light oil field, which has estimated reserves of 480 million barrels of oil equivalent under more than 2,500 meters of water. The block covers an area of 1,250 square kilometers south of the U.S.-Mexican maritime border, about 200 kilometers (125 miles) from the Mexican coast. Details such as the share Pemex would have in the development and contract terms have yet to be determined. Energy Minister Pedro Joaquín Coldwell, who heads the Pemex board, said partners would bring investment and technology while sharing the geological and financial risks that Pemex otherwise would face alone. Most of Pemex's 2.2 million barrels a day in crude-oil production comes from shallow-water deposits in the southern Gulf of Mexico. Pemex has done some deep-water exploration, but has no commercial output. The tender process to select one or more partners for Pemex will be carried out by the National Hydrocarbons Commission, and results are expected in December at the same time that the government holds an auction for 10 deep-water oil blocks. Trion is adjacent to several of the blocks included in that auction. Last year, the government held three auctions in which it awarded exploration and production blocks in shallow waters and onshore fields. Pemex didn't take part in those auctions. Mr. González Anaya said Trion will require about $11 billion in investment over 15 years, and that a partnership will reduce the amount of investment Pemex needs to make. He said the company is also considering other areas for partners. Partnerships are the key to raising Mexico's oil production, which has fallen by more than 1 million barrels a day from 3.4 million in 2004. "It's what's done the world over," said Houston-based oil analyst George Baker. "The most important thing in the Mexican upstream sector was never going to be the auctioning of government blocks, because Pemex has 83% of the reserves." Before the government began offering exploration and production blocks to private companies, Pemex was assigned more than four-fifths of the country's proven and probable hydrocarbon reserves and 21% of reserve prospects. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 10, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795574351
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795574351?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Business News: BP to Spin Off Norwegian Oil, Gas Fields
Author: Williams, Selina; Hovland, Kjetil Malkenes; Walker, Ian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 June 2016: B.4.
Abstract:
Production for the combined company of 120,000 barrels of oil equivalent a day will make it the largest independent oil-and-gas exploration and production company in Europe by output, taking it ahead of rivals such as Africa-focused Tullow Oil PLC. BP said the new company's output could more than double to 250,000 barrels of oil equivalent a day by 2023, once new fields are developed.
Full text: LONDON -- BP PLC said Friday that it is going to spin off its Norwegian oil and gas fields, combining them in a new, publicly traded company with properties from Norwegian firm Det Norske Oljeselskap ASA. The new company, to be known as Aker BP ASA, will have the highest output of any European petroleum exploration-and-production company -- the half-dozen or so firms with higher production are integrated giants that also refine crude. Under the agreement, Det Norske will give BP shares worth $1.3 billion for its Norwegian assets. BP will have a 30% share of the new company. Det Norske's major shareholder, holding company Aker ASA, which is controlled by billionaire Kjell Inge Rokke, will have a 40% interest and other Det Norske investors the remaining 30%. The new company will be listed on the Oslo Stock Exchange. The deal will give BP a small interest in a prized field operated by Statoil ASA and slated to go online in 2019. It could also increase BP's future production from Norway, a country where its output lags behind rivals such as Total SA, Exxon Mobil Corp and Eni SpA. BP has been selling properties that aren't at the core of its expansion plans -- such as aging fields -- in the years since its 2010 Deepwater Horizon blowout killed 11 workers and spilled oil into the Gulf of Mexico. The Norway deal gets older assets off BP's books and under the management of a smaller and potentially more efficient operator. And BP gets a stake in newer fields with greater growth prospects. The announcement comes during energy-industry turmoil after a two-year collapse in oil prices. Big and small producers have been slashing jobs and canceling projects to shore up their balance sheets. Despite a recent rally in oil prices to more than $50 a barrel -- nearly double January levels -- the price remains at less than half of 2014 highs. So companies remain cautious. BP's deal reflects that caution, BP Chief Executive Bob Dudley said at a news conference Friday. "The need for choosing how to spend money and capital very carefully is right at the forefront of everyone in oil and gas," Mr. Dudley said. Norway has the potential for production growth without having to find new assets to develop elsewhere, he added, so he wants BP to continue doing business there. "The idea of just selling the assets and leaving this country is just not an option for us," he said. Through Det Norske, BP will get a 3.48% stake in the offshore Johan Sverdrup field. It is one of Norway's biggest new petroleum projects and has oil that can be produced profitably at prices below $30 a barrel, Statoil has said. It is due to start producing in 2019. Production for the combined company of 120,000 barrels of oil equivalent a day will make it the largest independent oil-and-gas exploration and production company in Europe by output, taking it ahead of rivals such as Africa-focused Tullow Oil PLC. BP said the new company's output could more than double to 250,000 barrels of oil equivalent a day by 2023, once new fields are developed. Olaug Svarva, the director of Folketrygdfondet, Det Norske's second-biggest shareholder, called the deal "very positive." Under the terms of the deal, Det Norske will issue 135.1 million shares at NOK80 ($9.74) each to BP as compensation for its shares in BP Norge, including assets, a tax loss carry forward of $267 million and a net cash position of $178 million. Aker will buy 33.8 million shares from BP at the same price. Aker BP will introduce a quarterly dividend with the first payment planned for the fourth quarter of this year. The transaction is expected to complete in the third quarter of this year. Credit: By Selina Williams, Kjetil Malkenes Hovland and Ian Walker
Subject: Offshore oil wells; Spinoffs
Location: Norway
Company / organization: Name: BP PLC; NAICS: 211111, 324110, 447110; Name: Det Norske Oljeselskap; NAICS: 336611
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Jun 11, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795613077
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795613077?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Iran Shakes Up Leadership of State Oil Company; Replacement of managing director comes amid tension within government over how to handle return of foreign investment
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 June 2016: n/a.
Abstract:
The changes by Oil Minister Bijan Zanganeh come after government officials expressed disagreement over how to handle foreign investment and what kind of terms should be offered to foreign companies.
Full text: Iran replaced the head of its state-oil company on Sunday amid tension within the government over how to handle the return of foreign investment after Western sanctions lifted in January. Ali Kardor, who as National Iranian Oil Co.'s investment chief played a key role in bringing foreign companies back to the country, will succeed Rokneddin Javadi, managing director since 2013, NIOC said on its website. Mr. Javadi, who resigned, has been appointed deputy minister in charge of supervising hydrocarbon resources, the company said. The changes by Oil Minister Bijan Zanganeh come after government officials expressed disagreement over how to handle foreign investment and what kind of terms should be offered to foreign companies. Those differences of opinion have contributed to delays in tendering new oil-development contracts, two people familiar with the process said. In remarks carried by the oil ministry's news agency Shana on Sunday, Mr. Zanganeh acknowledged that contracts for new oil projects had faced criticism and said he was optimistic the first ones could be signed within three months. Conservative lawmakers and members of a paramilitary force called the Basij have frequently written on their websites that deals could be too generous to foreigners. Mr. Javadi has also recently been criticized by conservatives in Parliament over an export deal with an Emirati company a decade ago, conservative news agencies Fars and Mehr reported. At the time, Mr. Javadi was an NIOC executive. The conservatives, the news agencies reported, claim Mr. Javadi negotiated gas prices that were too low. A spokeswoman for the oil ministry and Mr. Javadi couldn't be reached for comment. While it hasn't signed new deals to develop its fields, Iran has resumed sales of its oil to companies in the European Union after a three-year ban. Royal Dutch Shell PLC recently loaded one Iranian crude oil shipment as a spot cargo, NIOC's marketing chief, Mohsen Ghamsari, said in remarks posted on the company's website. Shell last week declined to comment on making a shipment to Iran, which would be a first for Shell since sanctions lifted. Mr. Ghamsari said Iran doesn't have a long-term deal with Shell. Overall, Iran is selling 400,000 barrels a day to the EU--two-thirds of its presanctions market share--and is planning to boost that level to 700,000 barrels a day, Mr. Ghamsari said in an interview in May. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Foreign investment; Executives
Location: Iran
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 12, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795788080
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795788080?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall as U.S. Drilling Activity Picks Up; Brent fell below $50 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 June 2016: n/a.
Abstract:
Oil prices have surged nearly 90% since dropping to 10-year lows in February, thanks to unplanned production outages world-wide and falling output in the U.S. However, some market participants say the rally could encourage producers to ramp up production, keeping well-supplied markets awash in surplus.
Full text: Brent, the international oil benchmark, fell below $50 a barrel for the first time in a week as U.S. drilling data showed another uptick, reinforcing views that the recent rally may restrain the rebalancing in oil markets. Oil prices have surged nearly 90% since dropping to 10-year lows in February, thanks to unplanned production outages world-wide and falling output in the U.S. However, some market participants say the rally could encourage producers to ramp up production, keeping well-supplied markets awash in surplus. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $48.41 a barrel at 0205 GMT, down $0.66 in the Globex electronic session. August Brent crude on London's ICE Futures exchange fell $0.58 to $49.96 a barrel. On Friday, Baker Hughes Inc. said the number of rigs drilling for oil in the U.S. rose by three in the week ended June 10, the second straight weekly increase. Some analysts say although the latest uptick doesn't indicate a material change in U.S. production, it does suggest the $50 a barrel price was "enough to prompt at least some shift at the margin of the market from taking rigs offline to standing them back up," said Timothy Evans, a Citi Futures analyst. However, he said that despite the increase, the number of U.S. oil rigs is still 48% lower than a year earlier. "We don't see the increase off the bottom as doing much more than slightly slowing the rate of production decline." Still, other analysts say given the lack of positive catalysts in the market, even a marginal increase in shale production will prompt investors to take profits. In addition, demand growth--particularly in China--could ease in the second half of the year as crude prices edge up, said Gao Jian, an energy analyst at the Shandong-based SCI International. China has been a crucial driver of global crude demand as the government has granted more small private refiners, known as teapots, unprecedented access to buy foreign crude. In May, China crude imports jumped 39% from a year earlier to 7.6 million barrels a day. However, it fell 4.3% from the month before, mainly due to port congestion. "As crude oil prices are rising, many of the teapots are trying to capture the still-low prices by maxing their import quotas now. This is why the port is so congested and why China crude imports might slow down later in the year," he said. For this week, market participants will be looking at a monthly report from the Organization of the Petroleum Exporting Countries, to be released later today. Some energy research firms expect that OPEC production dropped slightly in May due to outages in Nigeria and Libya. The International Energy Agency will also release its monthly outlook report on Tuesday. Many will also be watching the Federal Open Market Committee meeting on Tuesday and Wednesday where the direction of U.S. interest rates will be deliberated. Analysts say given the lackluster U.S. jobs report last month, central bankers will likely keep interest rates where they are. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 134 points to $1.5462 a gallon, while July diesel traded at $1.5058, 102 points lower. ICE gasoil for July changed hands at $446.50 a metric ton, down $5.00 from Friday's settlement. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Crude oil prices; Interest rates; Futures
Location: United States--US China
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795798167
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Oil Drops Again on More Drilling and Stockpile Additions; Rig count rises for second consecutive week and Cushing stockpiles grow
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 June 2016: n/a.
Abstract:
According to analysts at Barclays, there are some signs of slowing momentum in India, especially in car sales, while the impact of the stimulus package in China, the world's second biggest oil consumer, is likely to fade.
Full text: Oil prices inched down to a one-week low after another day of losses connected with signs of increasing U.S. supply. The market had been taking sharp losses since Friday when Baker Hughes Inc. said the number of rigs drilling for oil in the U.S. rose for a second-straight week. On Monday, data provider Genscape said stockpiles at Cushing, Okla., grew by 525,000 barrels from June 3 to June 10, according to a person who had reviewed the report. The data is reinforcing views that a spring rally is encouraging more drilling, potentially scuttling hope that cutbacks and other supply outages are bringing a glutted market into balance. Oversupply could return in July and weigh on prices the second half of the year, Morgan Stanley said in a note to clients on Sunday and released to reporters on Monday. U.S. oil has lost 4.6% since Wednesday's settlement, its sharpest pullback since early May. Brent, the international oil benchmark, briefly fell below $50 a barrel for the first time in a week. U.S. oil for July delivery settled down 19 cents, or 0.4%, at $48.88 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 19 cents, or 0.4%, to $50.35 a barrel on ICE Futures Europe. Oil prices are up by more than 80% from a decade low earlier this year, thanks to unplanned production outages from Nigeria to Canada and falling output in the U.S. But the rally could encourage producers to ramp up, keeping well-supplied markets awash in surplus. "The higher prices climb, the more likely that production will be ramped up and thus keep those rising prices in check," said Mihir Kapadia, chief executive at Sun Global Investments. The number of U.S. oil rigs in operation is 48% lower than it was a year earlier despite the recent increase . But production hasn't kept pace, falling just 9% during the same period, according to government data. It is clear that U.S. producers have increased productivity and lowered costs and, without more supply disruptions, could flood the market again by the fall, said Tariq Zahir, who oversees $6 million as managing member of Tyche Capital Advisors LLC. With the way the rig count lags behind prices, the spring rally could keep rig counts rising for another two to three months, said analysts at JBC Energy. "You could get into a severe glut again," he said. "It's not the beginning of a trend yet, but it's the beginning of the possibility of a trend." Some analysts say that after the strong rally in the spring, oil prices might also face other headwinds in the second half of the year as demand weakens. According to analysts at Barclays, there are some signs of slowing momentum in India, especially in car sales, while the impact of the stimulus package in China, the world's second biggest oil consumer, is likely to fade. "The oil market has led a charmed life since the dark days of early 2016...however, it seems unlikely that this luck will last, and at some stage the upward price trend will come to an end," the bank said. This week, traders will be watching the U.S. Federal Reserve meeting Tuesday and Wednesday for clues about the direction of interest rates. Analysts say given the lackluster U.S. jobs report last month, central bankers will likely keep interest rates where they are. Changes in the interest rates have an impact on the U.S. dollar and dollar-denominated commodities such as oil. Gasoline futures fell 2.34 cents, or 1.5%, to $1.5362 a gallon, a one-month low. Diesel futures fell 0.15 cent, or 0.1%, to $1.5145 a gallon. Jenny W. Hsu and Nicole Friedman contributed to this article. Write to Timothy Puko at tim.puko@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Timothy Puko and Georgi Kantchev
Subject: Interest rates; Futures; Cost reduction
Location: United States--US
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795805998
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Iran Shifts Leadership Of Oil Firm
Author: Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 June 2016: A.12.
Abstract:
Iran replaced the head of its state oil company on Sunday amid tension within the government over how to handle the return of foreign investment after Western sanctions lifted in January.
Full text: Iran replaced the head of its state oil company on Sunday amid tension within the government over how to handle the return of foreign investment after Western sanctions lifted in January. Ali Kardor, who as National Iranian Oil Co.'s investment chief played a key role in bringing foreign companies back to the country, will succeed Rokneddin Javadi, managing director since 2013, NIOC said on its website. Mr. Javadi, who resigned, has been appointed deputy minister in charge of supervising hydrocarbon resources, the company said. The changes by Oil Minister Bijan Zanganeh come after government officials expressed disagreement over how to handle foreign investment. Those differences of opinion have contributed to delays in tendering new oil-development contracts, two people familiar with the process said. In remarks carried by the oil ministry's news agency Shana on Sunday, Mr. Zanganeh acknowledged that contracts for new oil projects had faced criticism and said he was optimistic the first ones could be signed within three months. While it hasn't signed new deals to develop its fields, Iran has resumed sales of its oil to companies in the European Union after a three-year ban. Credit: By Benoit Faucon
Subject: Chief executive officers; Appointments & personnel changes; Petroleum industry
Location: Iran
Company / organization: Name: National Iranian Oil Co; NAICS: 324110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.12
Publication year: 2016
Publication date: Jun 13, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795816826
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
OPEC Keeps Global Oil Demand Forecast Unchanged; Demand will increase by 1.2 million barrels a day, according to Vienna-based group
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 June 2016: n/a.
Abstract:
OPEC broke off its meeting earlier this month in Vienna without reaching an agreement on oil output, continuing a hands-off policy that members say could set up a new test for the group's relevance: shortages. [...]last December, OPEC had a production ceiling of 30 million barrels a day, a mark it routinely exceeded by more than two million barrels a day.
Full text: The Organization of the Petroleum Exporting Countries kept forecasts for global oil supply and demand unchanged Monday after its members broke off a meeting earlier this month without reaching an agreement on oil output. Global oil demand will increase by 1.2 million barrels a day this year to 94.18 million, led by India, the group's Vienna-based research department said in the monthly report. Non-OPEC production will fall by 740,000 barrels a day from 2015 to 56.4 million barrels a day this year. The downward revisions in Canada, Brazil and Colombia broadly offset upward revisions in the U.S., U.K., Russia and Azerbaijan. OPEC forecast U.S. production this year will fall by 420,000 barrels a day from 2015 to 13.57 million barrels a day. Total U.S. output will decline by 150,000 barrels a day in the second half of this year compared with the first half as producers cut production that is become unprofitable with the low oil price environment. OPEC broke off its meeting earlier this month in Vienna without reaching an agreement on oil output, continuing a hands-off policy that members say could set up a new test for the group's relevance: shortages. Until last December, OPEC had a production ceiling of 30 million barrels a day, a mark it routinely exceeded by more than two million barrels a day. Members decided against a return to such a cap, saying repeatedly that the market is rebalancing, and citing rising demand in the U.S., India and other major consumers as playing a major role in their decision. OPEC's 13 members pumped 32.36 million barrels a day in May, 100,000 barrels lower than a month earlier mainly on production drops in Nigeria, Venezuela and Iraq, according to secondary sources such as shippers, analysts and industry executives. The cartel's kingpin Saudi Arabia saw its production last month rising to 10.24 million barrels a day from 10.157 million a month earlier, according to OPEC sources. The organization, which pumps about a third of the world's crude, said it expects demand for its oil this year to reach 31.5 million barrels a day. Write to Summer Said at summer.said@wsj.com Credit: By Summer Said
Subject: Supply & demand; Cartels
Location: India Brazil Russia United States--US Colombia United Kingdom--UK Azerbaijan Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795837305
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Moody's Sees Saudi Economic Reforms as Risky but Positive; Despite serious challenges, reducing oil focus should make the kingdom's finances 'more resilient', agency says
Author: Ahmed Al Omran
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 June 2016: n/a.
Abstract:
[...]because economic growth will remain largely driven by government spending, a broader revenue base will make the economy more resilient to future oil price swings," it added.
Full text: RIYADH--Saudi Arabia's plan to reshape its oil-dependent economy faces significant implementation risks but is credit-positive as it presents a credible path to achieving fiscal and economic diversification, says Moody's Investors Service. The kingdom last week unveiled details of plans to more than triple its non-oil revenue by 2020 while cutting state handouts and subsidies as part of an initiative called the National Transformation Program--a key part of a road map for long-term economic reform known as Vision 2030. "Past experience suggests that the government may face political difficulties in implementing reforms. Aside from political challenges, the logistical challenges of implementing such a broad set of reforms in an environment that has proven so resistant to change in the past are very significant," Moody's said in a report on Monday. Still, even if Saudi Arabia implements part of the NTP, the plan will benefit the sovereign's credit quality by supporting its fiscal and economic strength, the rating agency said. The five-year plan, which was approved by the Saudi cabinet last week, will cost about 270 billion Saudi riyals ($72 billion) to implement between now and 2020, a period in which Riyadh expects non-oil revenues to more than triple to 530 billion riyals. As part of the NTP, the government also plans to adopt more painful measures such as the reduction of spending on wages and salaries, cutting its civil service workforce and slashing fuel, water and electricity subsidies--which could help the kingdom save as much as 200 billion riyals by 2020. Moody's noted that the rise in non-oil revenue will likely be through measures such as income taxes on non-Saudi nationals, increased "sin" taxes on tobacco and sugary drinks and other sales taxes, higher government fines and fees, and a value added tax. This will help reduce the government's reliance on oil, which has historically accounted for around 90% of government revenue, and make government finances more resistant to future oil-price fluctuations, Moody's said. "Moreover, because economic growth will remain largely driven by government spending, a broader revenue base will make the economy more resilient to future oil price swings," it added. A sharp fall in the price of oil has weighed heavily on the kingdom's finances, forcing it to run a record budget deficit of about $98 billion in 2015. It has also dipped into its foreign-exchange reserves, which fell to about $581 billion at the end of April from a peak of $746 billion in August 2014. The International Monetary Fund expects Saudi economic growth to slow this year as cheap oil continues to strain the kingdom's economy. But it has also praised the country's efforts to promote changes and reduce its dependence on crude sales. Write to Ahmed Al Omran at Ahmed.AlOmran@wsj.com Credit: By Ahmed Al Omran
Subject: Taxes; Subsidies; Budget deficits; Economic growth
Location: Saudi Arabia
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 13, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795837443
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Value of Norway's Oil and Gas Fields Drops by $50 Billion; Rystad Energy report expects European demand for natural gas to remain weak toward 2020
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 June 2016: n/a.
Abstract:
Rystad Energy said it expected European demand for natural gas to remain weak toward 2020 amid competition from coal power and renewable energy, but expects the gas market to tighten in the longer run.
Full text: OSLO--The value of Norway's state-owned oil and gas fields has dropped by roughly a third in two years, or by more than $50 billion, mainly reflecting tanking oil and gas prices, the country's government said Monday. A report from oil-data firm Rystad Energy estimated the value of Norway's direct ownership in oil and gas fields at 810 billion Norwegian kroner ($97.9 billion), down from 1.23 trillion kroner in a similar estimate two years ago, the government said. "As a consequence of a gas-heavy portfolio and high expected gas production [in the next few years], the reduced gas price expectation is the single most important driver of the reduction in portfolio valuation from 2014 to 2016," said Rystad Energy in the report. The Norwegian government owns stakes in a huge portfolio of oil and gas fields in the North Sea, the Norwegian Sea and the Barents Sea, including aging giants like the Troll and Oseberg fields, and the Johan Sverdrup field, which is still under development. The stakes are managed by state-owned Petoro AS. Last year, Norway's derived half of its oil and gas revenue from production taxes, 43% from the government's direct ownership in oil and gas assets, and 7% from dividends paid by Statoil ASA, in which the government has a 67% stake. Rystad Energy said it expected European demand for natural gas to remain weak toward 2020 amid competition from coal power and renewable energy, but expects the gas market to tighten in the longer run. Government-owned oil and gas fields contributed 27% of Norway's total oil and gas output in 2015, or about one million barrels of oil equivalent a day. Production is expected to remain largely flat until 2024 and then fade gradually, Rystad Energy said. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Subject: Natural gas
Location: Norway Norwegian Sea Barents Sea North Sea
Company / organization: Name: Statoil ASA; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 13, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795902628
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1795902628?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Iran Shakes Up Leadership of State Oil Company; Replacement of managing director comes amid tension within government over how to handle return of foreign investment
Author: Faucon, Benoit
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 June 2016: n/a.
Abstract:
The changes by Oil Minister Bijan Zanganeh come after government officials expressed disagreement over how to handle foreign investment and what kind of terms should be offered to foreign companies.
Full text: Iran replaced the head of its state-oil company on Sunday amid tension within the government over how to handle the return of foreign investment after Western sanctions lifted in January. Ali Kardor, who as National Iranian Oil Co.'s investment chief played a key role in bringing foreign companies back to the country, will succeed Rokneddin Javadi, managing director since 2013, NIOC said on its website. Mr. Javadi, who resigned, has been appointed deputy minister in charge of supervising hydrocarbon resources, the company said. The changes by Oil Minister Bijan Zanganeh come after government officials expressed disagreement over how to handle foreign investment and what kind of terms should be offered to foreign companies. Those differences of opinion have contributed to delays in tendering new oil-development contracts, two people familiar with the process said. In remarks carried by the oil ministry's news agency Shana on Sunday, Mr. Zanganeh acknowledged that contracts for new oil projects had faced criticism and said he was optimistic the first ones could be signed within three months. Conservative lawmakers and members of a paramilitary force called the Basij have frequently written on their websites that deals could be too generous to foreigners. Mr. Javadi has also recently been criticized by conservatives in Parliament over an export deal with an Emirati company a decade ago, conservative news agencies Fars and Mehr reported. At the time, Mr. Javadi was an NIOC executive. The conservatives, the news agencies reported, claim Mr. Javadi negotiated gas prices that were too low. A spokeswoman for the oil ministry and Mr. Javadi couldn't be reached for comment. While it hasn't signed new deals to develop its fields, Iran has resumed sales of its oil to companies in the European Union after a three-year ban. Royal Dutch Shell PLC recently loaded one Iranian crude oil shipment as a spot cargo, NIOC's marketing chief, Mohsen Ghamsari, said in remarks posted on the company's website. Shell last week declined to comment on making a shipment to Iran, which would be a first for Shell since sanctions lifted. Mr. Ghamsari said Iran doesn't have a long-term deal with Shell. Overall, Iran is selling 400,000 barrels a day to the EU--two-thirds of its presanctions market share--and is planning to boost that level to 700,000 barrels a day, Mr. Ghamsari said in an interview in May. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoit Faucon
Subject: Foreign investment; Executives
Location: Iran
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 13, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795902633
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
The Three Changes Nigeria Needs; We are fighting corruption and rebalancing away from oil dependence to create durable economic growth.
Author: Buhari, Muhammadu
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 June 2016: n/a.
Abstract:
Government is doing its part to lower taxes on small businesses, eliminate bureaucracy to bring the informal economy out of the shadows and provide development funding for priority sectors such as agriculture.
Full text: Nigeria is at a crossroads. Just over a year ago, people voted in a historic democratic election to end corruption and business as usual, opting instead to build an economy that delivers for all Nigerians. The old order was based on an unsustainable commodities supercycle. While the boom had many positives and contributed to Nigeria becoming Africa's largest economy, it fostered an epidemic of corruption and inefficiency. Foreign businesses and financial institutions also benefited as some people spent and sometimes hid huge sums abroad, lifted by the rising tide of oil exports and dollar revenues. Now we are living in a new world of low energy prices. The economy has slowed while unemployment and inflation have jumped. Longstanding structural imbalances and overdependence on imports have been cruelly exposed. We are an oil-rich nation that imports most of our gasoline. We are a farming nation that imports most of our basic food staples. This is simply not acceptable or sustainable. Related Articles * Nigeria's New Broom * The Horror of Boko Haram * Nigeria Needs U.S. Help Against Boko Haram Our solutions must be in proportion to the challenges. Fundamental change takes time and we are driving not one but three changes to reposition Nigeria for inclusive growth. * Restore trust We have begun to tackle the endemic corruption and mismanagement that is crippling our economy and corroding trust in our institutions. The anticorruption fight is at the heart of combating poverty and improving security. We have stepped up enforcement and new prosecutions to get our house in order, and I have called for foreign governments to work with us to identify where funds stolen during previous administrations are lodged and for multistate cooperation to combat oil theft. Fighting corruption is not enough. We need accountable government and a public sector that can do more with less. We have already taken initial steps by bringing all government finances into a single treasury account where we can monitor spending and impose discipline, implementing zero-based budgets and benchmarks targeted at waste and fraud, and establishing electronic platforms for government agency interface. * Rebalance our economy In a world of lower oil prices and dollar revenues, the only sustainable path is to reduce Nigerians' overreliance on imports. We must rebalance our economy by empowering entrepreneurs and producers, big and small, to create more of what their fellow Nigerians demand. The supply of foreign exchange to the economy must be increased. This requires radically increasing exports and productivity and improving the investment climate and ease of doing business. Nigeria's growth and job creation will be led by the private sector. We are a young, entrepreneurial society with vibrant success stories in new industries such as telecommunications, technology and entertainment. Government is doing its part to lower taxes on small businesses, eliminate bureaucracy to bring the informal economy out of the shadows and provide development funding for priority sectors such as agriculture. The central bank has moved to introduce greater flexibility in our exchange-rate policy. These actions are a downpayment on our people's ability to succeed. * Regenerate growth We must reposition our economy by attracting investment in domestic industries and infrastructure. Nigeria has huge untapped gas reserves and also a critical shortage of electricity. Our private sector loses too much of its revenue due to brownouts and power outages. Half of my fellow Nigerians have no access to the power grid. Investment in our power infrastructure, restructuring of the state-run oil-and-gas sector and development of other industries such as solid minerals, metals and petrochemicals will help to create a virtuous circle of growth and exports while creating jobs and reducing poverty. I am optimistic that our actions are providing the breathing room Nigeria needs during this period of fundamental change. But we cannot improve living conditions and restore fiscal health without making people feel safe and secure--just as we cannot defeat militancy without reducing poverty and dislocation. One of our main achievements this past year has been to unite regional and global allies to push back Boko Haram. What we do in the next three years to build an economic bridge to Nigeria's future will be just as important for bringing lasting peace and prosperity. Mr. Buhari is the president of Nigeria. Credit: By Muhammadu Buhari
Subject: Informal economy; Electricity distribution
Location: Nigeria Africa
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 13, 2016
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1795966970
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Trial Begins in Sabine Oil and Gas Bankruptcy Case; Week-long trial to focus on restructuring plan that has sparked stiff resistance from its creditors
Author: Corrigan, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 June 2016: n/a.
Abstract:
Earlier in the year, Judge Chapman largely sided with the company in a fight with unsecured creditors, who sought court permission to bring lawsuits over a botched merger with Forest Oil Corp. in 2014.
Full text: Sabine Oil and Gas Corp. commenced a week-long trial on a $3 billion restructuring plan that has sparked stiff resistance from its creditors and eluded compromise for nearly a year. Lawyers for Sabine gathered Monday at the U.S. Bankruptcy Court in Manhattan to ask Judge Shelley Chapman to overrule creditors who have objected to the plan, which would bring the contentious chapter 11 case to a close. Houston-based Sabine filed for bankruptcy last year , joining many other oil and gas companies that have sought chapter 11 protection amid the downturn in oil prices. Sabine explores and develops onshore oil and gas properties in Texas and Louisiana. "We don't have any happy creditors in this case," Jon Henes, a lawyer for Sabine, told the judge Monday. "That's what happens when an industry goes into turmoil." Sabine's restructuring plan calls for top-ranking lenders to walk away with about 93% of the reorganized business. If approved, the restructuring proposal would wipe out more than $2.5 billion in debt. Unsecured creditors, who say they are owed as much as $1.4 billion, are slated to recover less than two cents on the dollar, sparking numerous objections and appeals. The creditors, who have pushed for a sale of the business, dispute the valuation of Sabine's assets and which of those assets count as senior lenders' collateral. Unsecured creditors also say oil prices have increased significantly since Sabine's experts last valued its assets. Monday, lawyers for unsecured creditors asked Judge Chapman to consider updated valuations based on more recent prices. Margot Schonholtz, a lawyer for Wells Fargo, which leads a group of senior lenders, said in court Monday that the unsecured creditors' arguments are based on "faulty legal analysis and fuzzy math." "The time has come for this costly and protracted chapter 11 case to end," she said. Two court-ordered mediation sessions held earlier this year didn't yield any compromises on a long list of disputes that have taken center stage during the bankruptcy. Earlier in the year, Judge Chapman largely sided with the company in a fight with unsecured creditors, who sought court permission to bring lawsuits over a botched merger with Forest Oil Corp. in 2014. Sabine also came out on top in a legal battle with pipeline operators , which fought the oil and gas company's bid to reject deals it made before filing for bankruptcy. Sabine and its creditors have each agreed to limit themselves to 24 hours of arguments and testimony spread out over at least seven days. Sabine Chief Executive David Sambrooks was the first witness to take the stand Monday. Write to Tom Corrigan at tom.corrigan@wsj.com Credit: By Tom Corrigan
Subject: Bankruptcy reorganization; Bankruptcy; Natural gas utilities
Location: Texas Louisiana
Company / organization: Name: Forest Oil Corp; NAICS: 211111; Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 13, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796037806
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796037806?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Venezuela Oil Production Drops Sharply in May; Petroleum exporter faces cash crunch and widespread food shortages
Author: Vyas, Kejal; Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 June 2016: n/a.
Abstract: None available.
Full text: Venezuela registered its biggest monthly oil-production decline in a decade in May, according to data released Monday by the Organization of the Petroleum Exporting Countries, signaling further trouble for a country already enduring severe economic hardship. The decline of 120,000 barrels a day, to 2.37 million barrels a day, underscores the inability of state energy company Petróleos de Venezuela SA to maintain oil-industry investments, as the region's largest petroleum exporter suffers from a debilitating cash crunch, widespread food shortages and civil unrest. In recent months, major oil services companies, including Halliburton Co. and Schlumberger Ltd., said they were cutting back on operations in Venezuela as the country struggles to pay multibillion-dollar debts with partners. "This is very surprising," said Francisco Monaldi, a Latin American energy policy fellow at Rice University in Houston, who closely tracks Venezuela's oil industry. "If you want to point to the biggest problem, it is cash flow, which for PdVSA now looks worse than we had imagined." Venezuela, which relies on oil for nearly all of its income, is facing severe dollar shortages due to low oil prices as well as more than a decade of profligate spending under the ruling socialist government, which used oil-sector money to fund social programs. The country's oil output is far from the 6 million barrels a day that its officials have long targeted. Monthly oil production has fallen this much only once since 2003, when the country's oil industry came to a standstill during a devastating strike led by PdVSA workers seeking the ouster of then-President Hugo Chávez. The last time was in 2006, said Gary Ross, head of global oil at the consulting firm PIRA Energy Group, who added that the drop-off may give leverage to oil-field services companies that are now in payment negotiations with Venezuela. "There's an urgency there now that wasn't there before this happened, because of the lost production," Mr. Ross said. Venezuela, which boasts the world's largest crude reserves, needs significant investment in its Orinoco basin, a massive oil patch in the country's east, as part of its long-term plans to double oil output. The region's tar-like, heavy crude is costly to process and requires PdVSA to import light crude oil as a blending agent to extract the Orinoco crude and make it transportable. While the break-even price for Venezuelan oil is around $21 a barrel, Orinoco crude requires a price above $28 a barrel for PdVSA and its partners to make a profit on it, according to Eurasia Group analyst Risa Grais-Targow. Venezuelan oil fetched around $25 a barrel during the first three months of 2016. While the price has risen to nearly $40 a barrel over the last month, the production decline has eaten into PdVSA's revenues. Juan Forero contributed to this article. Credit: By Kejal Vyas and Timothy Puko
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 14, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796053619
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796053619?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall; U.S. Crude Stocks and Brexit in Focus; August Brent fell $0.44 to $49.91 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 June 2016: n/a.
Abstract:
Japan's Nikkei Stock Average was down 1.3%, Australia's S&P/ASX 200 was down 1.6% and Korea's Kospi lost 0.1%. [...]uncertainty before three major central bank monetary policy meetings this week in the U.S., Japan and Britain, will likely weigh on investor sentiment.
Full text: International oil benchmark Brent capped below $50 in early Asian trade Tuesday as investors stay risk-averse ahead of a referendum that could end Britain's membership in the European Union. Prices were also weighed by the prospect of bigger crude stocks in the U.S. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $48.45 a barrel at 0151 GMT, down $0.43 in the Globex electronic session. August Brent crude on London's ICE Futures exchange fell $0.44 to $49.91 a barrel. Shares in Asia were mostly lower on the growing suspense of the June 23 referendum, known as "Brexit", in which British voters will decide whether their country will remain in the EU. Japan's Nikkei Stock Average was down 1.3%, Australia's S&P/ASX 200 was down 1.6% and Korea's Kospi lost 0.1%. Moreover, uncertainty before three major central bank monetary policy meetings this week in the U.S., Japan and Britain, will likely weigh on investor sentiment. "You are already seeing some weakness in the global equities markets because of Brexit. We expect some short-term speculations amid the rising financial uncertainties," said Alan Oster, chief economist at National Australia Bank. According to some analysts, in the scenario that Britain leaves the EU, the British pound will likely take a hit and the greenback will appreciate. As oil trading is conducted in dollars, a strong dollar usually bodes badly for those who trade in foreign currencies. The WSJ dollar index was last up 0.04% at 86.44. But not all analysts think the Brexit hype has much influence over oil prices. "The Brexit issue is just a noise in the commodity space. It has brought down oil prices but we believe the supply and demand side of the oil market remains the main driver," said Barnabas Gan, an economist at OCBC. Oil prices retreated overnight after data provider Genscape Inc. tipped a 525,000-barrel increase in U.S. crude stockpiles in the week ended June 10. Prices have been under pressure since Monday after industry group Baker Hughes reported the number of rigs drilling for oil in the U.S. rose for the second-straight week. "The worry is that when prices reach $60 a barrel, we will see new investments in shale exploration," Mr. Gan added. Oil prices have been on a climb in recent months due to multiple supply outages across the globe. Continuous production declines in the U.S. is also keep the uptrend largely steady. According to the Organization of the Petroleum Exporting Countries, non-OPEC production will fall by 740,000 barrels a day from 2015 to 56.4 million barrels a day this year. Meanwhile, global demand will increase by 1.2 million barrels a day in 2016 to 94.18 million a day, led by India. "[This] underscores that the much anticipated swing to a deficit should not be taken for granted," said Tim Evans, a Citi Futures analyst. Investors will be watching out for the International Energy Agency report to be released later today as well as the weekly U.S. crude data on Wednesday. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 117 points to $1.5245 a gallon, while July diesel traded at $1.5040, 105 points lower. ICE gasoil for July changed hands at $446.00 a metric ton, down $6.25 from Monday's settlement. Dominique Fong contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Supply & demand; Investments; Futures; Crude oil prices
Location: United Kingdom--UK United States--US Japan Asia
Company / organization: Name: Genscape Inc; NAICS: 511140, 518210; Name: ICE Futures; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796068243
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796068243?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
World News: Venezuela Oil Output Drops Sharply in May
Author: Vyas, Kejal; Puko, Timothy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 June 2016: A.10.
Abstract:
The decline of 120,000 barrels a day, to 2.37 million barrels a day, underscores the inability of state energy company Petroleos de Venezuela SA to maintain oil-industry investments, as the region's largest petroleum exporter suffers a debilitating cash crunch, widespread food shortages and civil unrest.
Full text: Venezuela registered its biggest monthly oil-production decline in a decade in May, according to data released Monday by the Organization of the Petroleum Exporting Countries, signaling further trouble for a country already enduring severe economic hardship. The decline of 120,000 barrels a day, to 2.37 million barrels a day, underscores the inability of state energy company Petroleos de Venezuela SA to maintain oil-industry investments, as the region's largest petroleum exporter suffers a debilitating cash crunch, widespread food shortages and civil unrest. In recent months, major oil services companies, including Halliburton Co. and Schlumberger Ltd., said they were cutting back operations in Venezuela as the country struggles to repay multibillion-dollar debts to partners. "This is very surprising," said Francisco Monaldi, a Latin American energy policy fellow at Rice University in Houston, who closely tracks Venezuela's oil industry. "If you want to point to the biggest problem, it is cash flow, which for PdVSA now looks worse than we had imagined." Venezuela, which relies on oil for nearly all its income, is facing severe dollar shortages due to low oil prices, as well as more than a decade of profligate spending under the ruling socialist government, which used oil-sector money to fund social programs. Oil output is far from the 6 million barrels a day that its officials have long targeted. Monthly oil production has fallen this much only once since 2003, when the country's oil industry came to a standstill during a devastating strike led by PdVSA workers seeking the ouster of then-President Hugo Chavez. The last time was in 2006, said Gary Ross, head of global oil at the consulting firm PIRA Energy Group, who added that the drop-off may give leverage to oil-field services companies that are now in payment negotiations with Venezuela. "There's an urgency there now that wasn't there before this happened, because of the lost production," Mr. Ross said. --- Juan Forero contributed to this article. Credit: By Kejal Vyas and Timothy Puko
Subject: Petroleum production
Location: Venezuela
Company / organization: Name: PIRA Energy Group; NAICS: 541618; Name: Petroleos de Venezuela SA; NAICS: 211111
Classification: 8510: Petroleum industry; 9173: Latin America
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.10
Publication year: 2016
Publication date: Jun 14, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796117784
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796117784?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Global Oil Markets to Balance Out, IEA Says; Oil watchdog adjusts expected oversupply to 800,000 barrels a day, from 1.5 million barrels
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 June 2016: n/a.
Abstract:
Increasing Asian demand and world-wide disruptions to oil production could eat away today's oil glut by the end of 2016, the International Energy Agency said Tuesday.
Full text: Increasing Asian demand and world-wide disruptions to oil production could eat away today's oil glut by the end of 2016, the International Energy Agency said Tuesday. In its monthly report, the IEA said oil-production outages world-wide cut global supply by nearly 800,000 barrels a day in May, the first significant drop since early 2013. But the IEA warned that the surplus could reappear in the second half of next year. In the first quarter of 2016, global oil demand was 1.6 million barrels a day, the IEA said, raising its earlier estimate. It boosted its demand forecast for the rest of the year to 1.3 million barrels daily, up from 1.2 million in its May forecast. It also changed its outlook on the global oversupply that has driven oil prices down more than 50% since 2014. "Less oil has been stockpiled than we originally expected," the report said, lowering its estimate of global oversupply in the first half of 2016 from 1.5 million barrels a day to around 800,000. That is due partially to production outages in Nigeria , where attackers have blown up oil installations in recent weeks, negating supply increases in other member states of the Organization of the Petroleum Exporting Countries. The IEA said it also expects non-OPEC production to fall by 900,000 barrels a day this year from last year, to 56.8 million barrels a day. The decline is due in part to wildfires that have devastated Canada's oil sands . The IEA said non-OPEC oil production fell by more than 650,000 barrels a day last month from a month earlier to 55.9 million barrels a day. It forecast non-OPEC supply to rise 200,000 barrels a day in 2017, mainly as halted production from Canada and Brazil returns. The agency said it expects global demand to grow next year by 1.3 million barrels a day to 97.4 million barrels a day. But it said that production recovery in Canada, Nigeria or Libya could further drive supply up and prices down. U.S. shale production will decline next year, the IEA forecast. This year's average daily output of about 3.8 million barrels is down more than 500,000 barrels from last year, the IEA estimates. It predicts a further fall of about 190,000 barrels in 2017. OPEC, which pumps about a third of the world's crude, saw its output fall by 110,000 barrels a day in May to 32.61 million barrels. But OPEC member Iran saw output rise by 80,000 barrels a day to 3.64 million barrels--the highest since June 2011. Commercial stocks of oil in OECD countries increased by 14.4 million barrels from March to the end of April and stood at just over 3 billion barrels, up by 222 million barrels compared with a year earlier. Write to Summer Said at summer.said@wsj.com Credit: By Summer Said
Subject: Supply & demand; Cartels; Petroleum production
Location: Canada Nigeria
Company / organization: Name: Organization for Economic Cooperation & Development; NAICS: 928120; Name: International Energy Agency; NAICS: 926130, 928120, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796143915
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796143915?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Decline as Dollar Strengthens; Possibility the U.K. might leave the European Union has rattled global markets
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 June 2016: n/a.
Abstract:
On Monday, the Organization of the Petroleum Exporting Countries kept its forecasts for global oil supply and demand unchanged.
Full text: NEW YORK--U.S. oil prices fell to a three-week low Tuesday as the dollar strengthened and concerns about ample global supplies persisted. U.S. crude for July delivery settled down 39 cents, or 0.8%, to $48.49 a barrel on the New York Mercantile Exchange, the lowest settlement since May 23. Brent, the global benchmark, fell 52 cents, or 1%, to $49.83 a barrel on ICE Futures Europe, the lowest level since June 3. Prices have rallied sharply in recent weeks as natural disasters and violence cut production in some regions and U.S. output declined. The growing possibility that the U.K. might leave the European Union has rattled global markets this week, weighing on riskier assets such as commodities, and boosting safe-haven investments like the dollar. The WSJ Dollar Index recently traded up 0.5%. A stronger dollar can make oil, which is priced in dollars, more expensive for foreign buyers. "An exit of Britain from the EU would theoretically weaken the pound while boosting the U.S. dollar...placing further downside pressure on oil values," said energy-advisory firm Ritterbusch & Associates in a note. Traders are also concerned the global glut of crude hasn't shrunk as much as expected, even as unplanned production outages around the world have removed barrels from the market. In the U.S., the rally in oil prices from less than $30 a barrel in February to more than $50 a barrel last week could encourage producers to invest in new drilling, analysts say. The number of rigs drilling for oil in the U.S. has risen for two straight weeks, according to Baker Hughes Inc. "Expectations of U.S. production revival at $50 [are] weighing on sentiment," said consulting firm Energy Aspects in a note. The Energy Information Administration is due to release its latest U.S. production data Wednesday along with closely watched inventory data. Analysts surveyed by The Wall Street Journal expect the agency to report that U.S. crude stockpiles fell by 2.1 million barrels last week, while gasoline supplies fell by 200,000 barrels and stocks of distillates, including diesel fuel and heating oil, were unchanged. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 1.2-million-barrel increase in crude supplies, a 2.3-million-barrel increase in gasoline stocks and a 3.7-million-barrel increase in distillate inventories, according to market participants. The International Energy Agency on Tuesday said that supply and demand in the global oil market is likely to move close to balance in the second half of the year. The agency revised its global demand forecast higher for the year, though it also warned that currently halted production in Nigeria and Libya could return to the market, weighing on prices. On Monday, the Organization of the Petroleum Exporting Countries kept its forecasts for global oil supply and demand unchanged. "Even as both OPEC and the International Energy Agency talk about a tighter oil market, fear of the fallout from a U.K. exit from the eurozone is throwing global markets into a tizzy," said Phil Flynn, analyst at the Price Futures Group, in a note. For oil prices, he said, "turmoil surrounding the Brexit vote is perhaps...going to undo the green shoots of recovery." Gasoline futures settled down 1.49 cents, or 1%, to $1.5213 a gallon. Diesel futures fell 1.25 cents, or 0.8%, to $1.5020 a gallon. Summer Said contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Supply & demand; American dollar; Futures
Location: United States--US United Kingdom--UK
Company / organization: Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796230497
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796230497?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Brazil Court Accepts Sete Brasil Request for Bankruptcy Protection; A Brazilian court accepted the bankruptcy-protection request made by oil-rig venture Sete Brasil Participacoes, which now has 60 days to present a recovery plan for creditors.
Author: Jelmayer, Rogerio
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 June 2016: n/a.
Abstract: None available.
Full text: SÃO PAULO--A Brazilian court accepted the request made by oil-rig venture Sete Brasil Participacoes SA for bankruptcy protection. The company, which filed the request for bankruptcy protection in mid-April, now has 60 days to present a recovery plan for creditors. Sete Brasil has debt worth 18 billion reais ($5.21 billion). The major part of the debt is held by state-run banks Caixa Economica Federal and Banco do Brasil, with the remainder held by other local banks. Those banks already assumed provisions to cover potential losses with the company, according to a person close to the situation. The company is controlled by a group of around 10 shareholders, including state-run oil company Petroleo Brasileiro SA, or Petrobras; four local pension funds; Banco Santander and Banco BTG Pactual. Sete Brasil was created in 2010 to contract for the construction of oil rigs and other big equipment that Petrobras would need to explore large oil fields off the coast of Brazil. However, with the drastic drop of oil prices and a massive probe reaching certain Petrobras contracts, the original plan of the oil company to lease 28 rigs from Sete Brasil, dropped to less than half of this amount, currently. Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com Credit: By Rogerio Jelmayer
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 14, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796239303
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796239303?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Import Prices Rise at Fastest Pace Since 2012; May's 1.4% jump indicates rising oil prices are contributing to firming domestic inflation
Author: Anna Louie Sussman
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 June 2016: n/a.
Abstract:
The firming import prices come as Federal Reserve officials begin a two-day meeting to evaluate the state of the economy and consider adjusting monetary policy.
Full text: WASHINGTON--Prices for imported goods rose in May at their fastest pace in over four years, a sign that rising oil prices and the fading strength of the dollar are contributing to firming domestic inflation. May saw the third monthly rise in a row, marking the longest streak of increases since early 2014, as prices continued to strengthen for petroleum-related products and industrial supplies such as metals. Import prices rose 1.4% in May , the Labor Department said Tuesday, following an upwardly revised 0.7% increase in April. Economists surveyed by The Wall Street Journal had expected a 0.7% rise for May. The gains weren't limited to oil-related products, whose prices have been climbing since January when crude oil hit a low near $30 a barrel. Import prices excluding petroleum posted their first monthly advance since March 2014, with higher prices for finished goods such as cars and consumer products. Recent price increases for finished goods "suggest that the downward push of the firm dollar on import prices is beginning to fade," said Michael Moran, chief economist at Daiwa Capital Markets America, in a note to clients. The firming import prices come as Federal Reserve officials begin a two-day meeting to evaluate the state of the economy and consider adjusting monetary policy. May's dismal jobs report may be outweighing other positive signs for the economy, such as April's jump in consumer prices and recent robust consumer spending . The monthly increase largely reflected an uptick in oil prices. Import prices for petroleum and petroleum products advanced 17.4% in May, an acceleration from April's 11.0% rise. Over the year, petroleum prices are still down 29.1%. Prices for non-petroleum imports rose 0.4% from April, matching a March 2014 figure that was the highest since April 2011. Excluding the volatile food and fuel categories, import prices also rose 0.4% from April and are still down 1.7% from May 2015. "Core import prices are likely to move toward stability on a year-over-year basis in the months ahead" as the dollar loses its strength, said Joshua Shapiro, chief U.S. economist at MFR, Inc. Slowdowns in overseas economies had softened demand for many commodities in recent months, weighing on their prices on the global market. A stronger dollar, meanwhile, makes imports relatively cheaper for U.S. consumers and exports more expensive for overseas buyers. But the dollar has weakened since the beginning of the year, and oil prices have also firmed around $50 a barrel in recent weeks after hitting decade lows near $30 in January. Federal Reserve Chairwoman Janet Yellen said at a speech earlier this month she believes the strong dollar and low oil prices, the two factors weighing on inflation, "will likely prove only temporary." As those factors recede, she expects inflation to move toward 2%. The U.S. imports roughly $2.7 trillion annually in goods and services, or around 16% of GDP. The latest figures show import prices for nonfuel industrial supplies and materials, such as metals and building materials, rose 1.7% in May, after rising 0.4% in April. The rise in input prices could signal growing demand in the U.S. manufacturing sector, which expanded for the third straight month in May, according to the Institute for Supply Management. Overall import prices are still down 5.0% from a year earlier. The year-over-year figure has declined each month for 22 straight months, but the annual drops have been shrinking fairly steadily since September. U.S. export prices rose 1.1% in May from the prior month, its largest increase since March 2011. But export prices are still down 4.5% year-over-year. Fed officials held off on raising interest rates at the end of April, in part because of worries about when inflation would reach the central bank's 2% target. As measured by the Fed's preferred gauge, the price index for personal-consumption expenditures, inflation has undershot 2% for four years. Most economists surveyed by The Wall Street Journal expect the Fed to raise short-term interest rates later this summer. Just 6% said they believe the rate increase will come this week. Unlike other price gauges measured by the government, import prices aren't seasonally adjusted. Write to Anna Louie Sussman at anna.sussman@wsj.com Credit: By Anna Louie Sussman
Subject: Inflation; American dollar; Economic models; Price increases
Location: United States--US
Company / organization: Name: Institute for Supply Management; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 14, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796249771
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796249771?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The W all Street Journal
The Impossible Burger is Ready for Its (Meatless) Close-Up; A long-awaited vegan burger from Silicon Valley startup Impossible Foods hits select restaurants this month. But can coconut oil and potato proteins compete with the red-blooded original?
Author: Soller, Kurt
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 June 2016: n/a.
Abstract: None available.
Full text: FROM THE OUTSIDE, THE HEADQUARTERS of Impossible Foods looks like the set of "Office Space": a one-story Redwood City, Calif., industrial park with blacked-out windows, fronted by rows of plugged-in electric cars. Inside, there's none of that sleek, airy aesthetic for which Silicon Valley has become infamous. Rows of drab desks lead to back rooms packed with scientific equipment. "For four years, nobody outside the building knew we existed, which is how we wanted it," says CEO and founder Patrick O. Brown. Brown's father was in the CIA; a clandestine work environment may be in his blood. As we continue our tour, Lance Ignon, a communications consultant, quips: "It's not like investors are complaining about us wasting money on art." Investors have hardly been an issue so far. The company, founded in 2011, is one of the best-funded food startups of the decade, with $182 million over four rounds from top venture-capital firms and Bill Gates, who joined the latest round in 2015 . "This has all gone a lot easier for Pat because he has so much credibility," says Samir Kaul, a founding partner at Khosla Ventures, which was the only investor during the first round and has participated in every subsequent one. Today, Brown works just a few miles from the Stanford campus, where he spent almost three decades as a top biochemist. At 61, he bears a passing resemblance to Apple CEO Tim Cook. A regular marathoner, he's spry and trim in his wardrobe of dad jeans, T-shirts branded with his company's logo (they're free to visitors) and a hoodie from American Giant, which Slate once called "the best sweatshirt known to man." He's casual in his manner, occasionally sarcastic, prone to delivering research-driven soliloquies while avoiding eye contact. While at Stanford in the 1990s, he pioneered a new type of DNA mapping called microarray, which some in his field believe could one day earn him a Nobel Prize. More Future of Everything * What Are You Printing for Dinner? * Are Shipping Containers the Future of Farming? * Is the Jetpack Movement Finally Taking Off? * The Future of Everything: June 2016 At Impossible Foods, Brown, along with 125 colleagues--pedigreed scientists, nutritionists, techno-marketing experts--is working to perfect a vegan version of the all-American ground-beef patty. His elevator pitch is straight-up Silicon Valley: meatless burgers as a "platform to disrupt" the international meat supply. Cows, according to Brown, are "an inefficient technology" requiring too many inputs to create beef, an output that hasn't evolved since the Paleolithic age. "The whole mission of this company is to make eating animals unnecessary," he says. "So, we don't want our product to just be delicious, we want it to be as delicious as meat." He would never describe his innovation as "a veggie burger," which conjures images of bland, frozen constellations of grains and beans. His patty is officially "a combination of proteins, fats, amino acids and vitamins derived from wheat, the roots of soybean plants, coconuts, potatoes and other plant sources." The goal? To reverse-engineer flavors and textures heretofore exclusive to cows. Brown's meat-disrupting motivations are manifold. Industrial animal farming uses a third of the planet's land, while also destroying millions of trees and sucking up one-third of our water supply; methane gases expelled by cows are contributing to climate change. These problems scale up as countries like China and India develop a taste for beef and the global population as a whole continues to skyrocket. Brown is confident that everyone knows this stuff, but thinks no one is taking it seriously. "We're getting into this very scarily unstable area where we've never gone before in terms of pushing the boundaries of a stable planetary system," he says. "We're driving toward the cliff with our foot on the accelerator--and nobody was working on this as a solvable problem." But in fact, there's a cottage industry of technology companies attempting to save the planet by redirecting our food supply. Hampton Creek successfully lobbied the Food and Drug Administration to name its canola-oil-based, egg-free spread Just Mayo; Memphis Meats is using stem cells to culture pork and beef, though an edible product is likely years away. The furthest along is Beyond Meat, which sells plant-based "chicken," "meatballs" and Beyond Beef beefy crumbles in cute resealable packages, plus a new Beyond Burger, being rolled out in a few Whole Foods stores and sold fresh in the meat aisle. The Impossible Burger is also sold raw, intended for cooking, and engineered to mimic the taste, textures and chemical characteristics of ground beef . "It's the single biggest category of meat in the U.S.," Brown says. "We never thought about launching with some feeble, easy, low-impact thing." Brown is, unsurprisingly, a vegan and hasn't eaten the sort of burger he's trying to emulate in at least 40 years. Still, he's focused on carnivores and uninterested in appealing to his fellow abstainers. "We can have a successful product that would sell to people who are looking for meat alternatives," he says. "We're not interested in that." AS WE PUT ON HAIRNETS TO ENTER THE LAB, Brown points out two women working on a melty, vegan version of American cheese. Behind them sits a giant kettle filled with sweet-smelling yeast similar to that used to make Belgian beer. It's here that Impossible Foods is refining its secret sauce: a compound called heme, which helps meat taste meaty--and which Brown credits for conferring the same property on the Impossible Burger. Heme shows up in animal muscles as myoglobin, and it's the reason raw beef is red and bloody. It's also a catalyst for imbuing vitamins, sugars and amino acids with a richer taste. "I knew that in all of the things we call meat, they have s---loads of heme in them," Brown says. He also knew, from his years as a biochemist, that nitrogen-fixing legumes--like clovers or soybeans--also contain heme. But according to Brown, no one had isolated the compound for flavoring purposes. "It was surprising to me that this was still left to be discovered, given that people have been eating meat for millions of years," he says. The team's next task was to identify plant proteins and other vegan components that work in tandem with heme to approximate ground beef. Rather than picking vegetables with an inherent beefiness, like mushrooms or carrots, "we started with a bunch of ingredients that in no way resembled a burger," Brown says. His staff used a machine that isolates compounds on a molecular level so scientists could determine which plants might lend desirable properties. Potatoes were selected for a protein that firms up when heated, giving the Impossible Burger that essential exterior crust. Coconut oil, which starts as a solid and melts as it cooks, adds fat and juiciness. Another machine, used to identify specific scents--the scientific equivalent of Smell-O-Vision--helped researchers determine that something in honeydew melon mirrors the scent of cooked beef. But smell and taste aren't the only reasons meat is entrenched in the human diet. In most of the world, beef is a luxury good--a uniquely efficient source of protein, iron and calories in a deliciously convenient package. The cattle industry has made it available at a relatively low cost. For the Impossible Burger to have a shot, it needs to replicate the sensory experience, dietary benefits and affordability of ground beef. Nutrition was the easiest part. Brown had his burger tested to make sure its plant-based protein is just as abundant and "bio-available" as the protein in beef. A four-ounce Impossible Burger contains more sodium and saturated fat than its red-meat inspiration, along with 10 fewer calories. But it lacks cholesterol, hormones, antibiotics, fecal matter, "pink slime" and other unsavory byproducts of industrial meat production. Cleanliness and eco-friendliness come at a price; in 2014, The Wall Street Journal reported that a single patty cost about $20 to produce (and tasted like a turkey burger). Impossible Foods said that number "has dropped substantially," but declined to give specifics. The company expects production costs to decrease further when its Oakland, Calif., production facility ramps up over the next six months, but the burger will be launching, like other Silicon Valley breakthroughs, as a niche product for the rich. Brown, of course, understands that pricing will be the barrier to wide adoption. This year, the company surveyed 600 "hard core middle America burger lovers," as he calls them, about their eating habits and asked them whether they'd choose a plant-based burger if it was identical--in taste and cost--to the beef version. Nearly 70% said they would. "People are addicted to meat, and it's going to be a long time before they move away from it," he says. "But what that tells you is that the fact that meat's made from an animal is not part of its value proposition." And that was before the company mentioned that the Impossible Burger also emits 75% less greenhouse gas than its beefy competitor and uses up a comparatively tiny fraction of both water and land. This July, a half-decade after the project began, the Impossible Burger will become available for public consumption. Jardinière, a tony San Francisco restaurant, will begin by offering burgers on special occasions, and a small number of restaurants will start selling the Impossible Burger later this summer, starting in New York. Production is limited--the company could manufacture a million pounds this year, less than a tenth of a percent of U.S. beef consumption--so the rollout is calibrated to target high-end diners first. According to Impossible Foods, the retail price has not been set. By the time the Impossible Burger hits supermarkets--"in the next few years," according to the company--Brown hopes to have built enough buzz that grocers will display his meat prominently in the butcher's case, instead of hiding it in the frozen-food aisle. He's following the model used to launch Kite Hill, a brand of nut-milk products he co-founded in 2014, which is now among the few nondairy lines stocked in cheese cases at Whole Foods. The idea is to grow slowly, ensuring his burger is increasingly in demand among consumers while the company itself remains small enough to fly under the radar of beef lobbyists. "My feeling is, right now, that we're in the fortunate position where the beef industry is not inclined to feel threatened by anyone like us," Brown says. "We're not having a war of aggression on the meat industry--at least overtly." I LEAVE THE IMPOSSIBLE FOODS LAB with a lunchbox full of raw, slider-size burgers and head to the San Francisco restaurant Jardinière. Chef-owner Traci Des Jardins is a consulting chef at Impossible Foods, where she has spent the past year developing recipes and teaching scientists about flavors and cooking techniques. Today, she's making a version of the Impossible Burger that she plans to serve in July. The patty sizzles like beef in the pan, which gets my appetite going. But the burger Des Jardins delivers to the dining room is improbably loaded with condiments. Inside a small potato roll, a seared patty is covered with dijonnaise--made with vegan Just Mayo, of course--avocado slices, mashed avocado, caramelized onions, tomato and gem lettuce. If a burger needs this many add-ons, how good can it be? Surprisingly good, it turns out. The rich crust gives way to a soft, slightly tannic pink center. The taste is complex--fruitier, funkier and more barnyardy than any other plant-based veggie burger. The aroma, which accounts for about 80% of what we experience as taste, is exactly like cooked beef. But the texture is slightly off. When I roll a crumb of burger between my fingers, it goes grainy, lacking meat's melty quality. Still, there's a bona fide beefiness to the patty; Des Jardins's accoutrements aren't hiding anything. I ask for the chef's opinion. "There's a little bit of a cereal note to it," she says. "But I equate this to when grass-fed beef first hit the market. Initially consumers were skeptical, but now some prefer it." Part of grass-fed beef's appeal is its artisanal nature and the way it varies from purveyor to purveyor, which is something an engineered mix of isolated compounds can never provide. So the Impossible Burger lacks the elemental excitement of a burger blend made from what was once live animals. To Brown, that idea of tastiness is arcane. "We're going into completely unexplored territories, where there might be flavors and qualities humans have never experienced before," he says. Already, his team has accidentally veered into pork territory a few times, then set those experiments aside. They're entirely focused on replicating 80% lean, 20% fat, middle-of-the-road ground beef. But in chasing that goal, Impossible Foods may have optimized itself into a corner. The burger is designed for a crisp char and sears nicely in a pan, but Des Jardins admits it hasn't worked as well when cooked over a grill. Supermarket beef is far from an ideal product, and an engineered, Silicon Valley version is...what, exactly? It's a vegan take on carnivorism--delicious, admirable and still somewhat anemic. Later, as I'm driving to the airport, I notice that my hands are sticky with juices that seeped from the burger at lunch. Tentatively, I lick my fingers, expecting beef, but finding nothing. In that moment, I'm convinced that the Impossible Burger is a simulacrum, a brilliantly concocted facsimile of the real thing. When a simulation comes this close to reality, the shortcomings are impossible to ignore. Especially since, as a flight attendant distributes tiny bags of pretzels, I realize that I still want lunch. Corrections & Amplifications Impossible Foods and Beyond Meat both make plant-based burgers that are raw and intended for cooking. An earlier version of this article incorrectly suggested the Impossible Burger was the only such burger. (June 17, 2016) Credit: By Kurt Soller
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 14, 2016
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796260479
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796260479?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Mexican Peso Hit by Risks From Brexit to Trump; Currency has continued to slide despite recovery in oil prices that is positive for government revenue
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 June 2016: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexico's peso slid Tuesday to its weakest level against the U.S. dollar since February, moving toward the record lows that prompted the central bank earlier this year to raise interest rates and intervene directly in the foreign exchange market. The prospects of higher U.S. interest rates in coming months, concerns that the U.K. will vote next week to leave the European Union, and the possibility that Donald Trump could win the U.S. presidential election in November have all put downward pressure on the currency in the past month. The peso weakened for a fourth consecutive session Tuesday, briefly moving above 19 to the dollar and trading in Mexico City around 18.97 in early afternoon. The Bank of Mexico hasn't intervened in the exchange market since Feb. 17, when it sold $2 billion just days after the peso had fallen to its weakest ever at 19.4485 to the dollar. The central bank also raised interest rates at the time by a half percentage point following an unscheduled meeting. "With USD/MXN making new highs for this move, the February all-time high near 19.45 looms closer," Brown Brothers Harriman said in a note. "We downplay any imminent action to support the peso, but acknowledge that the Bank of Mexico may hike rates at the June 30 meeting if currency weakness persists." Related Coverage * Bank of Mexico Sticks to 2016 Growth Outlook, Trims 2017 Forecast (May 25) * Bank of Mexico Minutes Show a Hawkish Tone (May 19) * Weaker Mexican Peso Raises Expectations of Central Bank Action (May 18) * Bank of Mexico Keeps Interest Rates on Hold (May 5) Bank of Mexico Gov. Agustín Carstens said at a May 25 press conference that the bank hasn't noted the kind of automated trading against the peso that led to the intervention in February, and that there was no evidence of a speculative attack on the currency. "There have been fundamental reasons that explain that depreciation," he said. The peso has since continued to slide, however, despite a recovery in world oil prices that is positive for government revenue and for cash-strapped state oil company Petróleos Mexicanos. Recent polls showing the British leaning toward a vote to leave Europe have added to the pressure. Even though a U.K. exit from the EU is unlikely to have much direct impact on Mexico's economy, it could hurt the peso by tightening global financial conditions and increasing global risk aversion, said Nomura Latin America strategist Benito Berber. A leave vote on June 23 could push the peso, one of the world's most-traded currencies, to a new all-time low at 19.50 to the dollar and prompt the central bank to intervene, said Gabriela Siller, head of research at Mexico's Banco Base. Analysts note that the peso depreciation accelerated when Mr. Trump virtually clinched the Republican presidential candidacy given his plans to build a wall along the U.S.-Mexican border and claims he will make Mexico pay for it by threatening to curb remittances from Mexicans in the U.S., impose trade tariffs or restrict visas. "The peso is perhaps one of the most vulnerable currencies to the impact of the policies proposed by Mr. Trump," Mr. Berber said. In anticipation of further risks ahead, the Mexican government in May obtained a new two-year flexible credit line with the International Monetary Fund, extending the amount to $88 billion from $67 billion. The government and central bank cited risks including low oil prices, slowing global growth and lower trade and capital flows, as well as uncertainty over the pace at which the Federal Reserve will raise interest rates. The Fed is widely seen leaving interest rates unchanged Wednesday following a weak May employment report, but could fuel risk aversion by leaving increases on the table for July. The Bank of Mexico is expected to follow any Fed interest-rate increases by raising the local rate as it did in December, although several analysts think the bank could move before the Fed if the peso continues to sell off. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 14, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796338983
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796338983?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Judge Approves Penn Virginia's Restructuring Deal; Approval doesn't prevent bankrupt oil and gas producer from continuing to negotiate with other stakeholders
Author: Stech, Katy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 June 2016: n/a.
Abstract:
In papers filed in U.S. Bankruptcy Court in Richmond, Va., Republic Midstream lawyers said their own reorganization strategy is cheaper for Penn Virginia to execute and would provide $30 million for the company to restart drilling operations in Texas, where the company and its affiliates own roughly 100,000 net acres.
Full text: The judge overseeing oil and gas producer Penn Virginia LLC's bankruptcy approved a restructuring deal that would enable the struggling company to take in $50 million by selling new common stock. At a hearing on Monday, Judge Keith L. Phillips cleared Penn Virginia officials to formally enter a restructuring agreement with a group of lenders, though the approval doesn't prevent Penn Virginia officials from continuing to negotiate with other stakeholders who have alternate ideas . Penn Virginia officials have also received a proposal from Republic Midstream, a company that has been hired to build a pipeline for nearly all of Penn Virginia's crude oil pulled from Texas' Eagle Ford drilling region. In papers filed in U.S. Bankruptcy Court in Richmond, Va., Republic Midstream lawyers said their own reorganization strategy is cheaper for Penn Virginia to execute and would provide $30 million for the company to restart drilling operations in Texas, where the company and its affiliates own roughly 100,000 net acres. Republic Midstream is indirectly owned by a fund managed by ArcLight Capital Partners LLC, a private-equity firm that manages $15.7 billion, according to court papers. Penn Virginia, one of the largest oil and natural gas drillers in the Eagle Ford region, halted drilling in February. Penn Virginia officials said plummeting oil and natural gas prices prompted them to negotiate a break with lenders on more than $1.2 billion of debt. The 96-worker company, based in Radnor, Pa., near Philadelphia, also drills in Oklahoma and in Pennsylvania's Marcellus Shale. As of Dec. 31, the company said it has 44 million barrels of oil equivalent in total proved reserves, according to court papers. Founded in 1882 as Virginia Coal & Iron Co., Penn Virginia mostly profited by leasing coal properties until 2001, when company officials expanded to focus on other land-management activities like timber sales. Penn Virginia also expanded its oil- and natural gas-exploration footprint by acquiring properties throughout the Appalachia region and in states such as Texas, Louisiana and Mississippi. The energy-price crash , which has prompted dozens of other oil and gas producers to seek bankruptcy protection , cut the company's revenue in half during the span of one year. Last year, Penn Virginia took in $305 million in revenue, down from $637 million in revenue recorded in 2014, court papers said. "In the fall of 2014, oil prices plummeted due principally to global oversupply and have yet to recover," Chief Restructuring Officer R. Seth Bullock said in earlier court papers. In response, Penn Virginia officials laid off employees and reduced the number of operating rigs in the Eagle Ford Shale to one from eight. But the cost-cutting wasn't enough. In January, the company was delisted from the New York Stock Exchange for having a share price below the minimum allowed. Write to Katy Stech at katherine.stech@wsj.com Credit: By Katy Stech
Subject: Bankruptcy reorganization; Bankruptcy; Court hearings & proceedings; Stock market delistings; Natural gas prices
Location: Texas
Company / organization: Name: Bankruptcy Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 14, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796353635
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796353635?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Drop to Multiweek Low on Growing Supply; Brent crude fell $0.76 to $49.07 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 June 2016: n/a.
Abstract:
Prices started to tumble last Friday when industry group Baker Hughes Inc. reported the second consecutive rise in the number of active oil rigs in the U.S., a sign that rising prices was luring shale producers back to the oil field.
Full text: U.S. prices sank to a more than three week low in early Asian trade Wednesday as the prospect of bigger U.S. crude stocks indicate the global oil glut could be more stubborn than previously thought. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July was last down $0.73 at $47.76 a barrel, after dropping to $47.55, the lowest intraday level since May 23. August Brent crude on London's ICE Futures exchange fell $0.76 to $49.07 a barrel, the lowest level since early June. Earlier in the session, the grade fell to $48.91, the lowest intraday day level since June 2. Prices have climbed in recent months as wildfires in Canada and political upheavals in Africa wiped out some productions. U.S. output has also declined dogged by waning investment. But many market observers had predicted the price rally was vulnerable given the market is still amply supplied. Prices started to tumble last Friday when industry group Baker Hughes Inc. reported the second consecutive rise in the number of active oil rigs in the U.S., a sign that rising prices was luring shale producers back to the oil field. Adding to the worries was the latest forecast from the American Petroleum Institute which suggested a 1.2-million barrel increase in U.S. crude stocks for the week ended June 10. A survey of analysts by The Wall Street Journal had estimated a 2.1-million barrel drop. Official data from the Energy Information Agency will be released later today. If the EIA data confirms the expansion, it would be "a counter-seasonal build in stocks that at least interrupts the prior downtrend," said Tim Evans, a Citi Futures analyst. With a British referendum on its fate in the European Union around the corner and several central banks meeting this week, investors are mainly in a wait-and-see mode, said Avtar Sandhu, a commodities analyst at Philip Futures. The growing possibility that the U.K. might leave the EU has rattled global markets this week, weighing on riskier assets such as commodities, and boosting safe-haven investments like the dollar. The WSJ Dollar Index recently traded up 0.5% at 86.86. A stronger dollar can make dollar-pegged oil more expensive for foreign buyers. "The overall market sentiment is soft because even though production has slowed, supply is still in excess of demand and a rebalance has not yet started," said Mr. Sandhu. His view is echoed by the International Energy Agency. On Tuesday, the group said global oil market is moving close to balance, but not until the second half of the year. The energy watchdog warned of an "enormous inventory overhang" which is sure to dampen prospects of a significant increase in oil prices. The IEA sees oil demand growing by 1.3 million barrels a day in 2017. Supplies from the Organization of the Petroleum Exporting Countries is expected to see a modest rise of 200,000 barrels a day. OPEC production is seen growing modestly in 2017 and global oil stocks will build slightly in the first half of next year before falling in the second half. For the whole year, it estimates a small stock draw of 100,000 barrels. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 368 points to $1.4845 a gallon, while July diesel traded at $1.4797, 223 points lower. ICE gasoil for July changed hands at $438.75 a metric ton, down $4.75 from Tuesday's settlement. Nicole Friedman and Summer Said contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: Supply & demand; American dollar; Stocks; Futures
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: International Energy Agency; NAICS: 926130, 928120, 541720; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New Y ork, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796370506
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796370506?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Lower on Oversupply Concerns; Traders not convinced drawdowns are ample enough to dent supply
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 June 2016: n/a.
Abstract:
Apache Corp., for example, based its budget this year on U.S. oil prices of $35 a barrel, so it is "not unreasonable" to think the company could add five rigs in the Permian basin with oil now near $50, analysts at Piper Jaffray Cos.' Simmons & Co. International said in a note Wednesday.
Full text: Oil prices fell for the fifth-straight session, hitting a three-week low as traders fear signs of easing oversupply may be only temporary. U.S. government data Wednesday showed crude stockpiles shrank by less than half of analysts' expectations, down just 933,000 barrels last week. It was a larger drawdown than industry estimates, which helped prices spike briefly, but other signs of a stubborn glut kept pulling the market back into losses. Ultimately, that decline isn't likely enough to dent a glut of crude that has weighed on oil markets for two years, brokers and analysts said. Stockpiles also grew by 525,000 barrels at the key crude delivery hub of Cushing, Okla. That may be a sign that Canadian production is coming back online after forest fires had limited the country's output, and that more Canadian crude will be flooding back into U.S. markets during the coming weeks, analysts said. "This just continues more of the same saga," said Donald Morton, senior vice president at Herbert J. Sims & Co., who runs an energy-trading desk. "You have a bear cycle setting in, and this data that came in today is not enough to change that thinking." U.S. oil for July delivery settled down 48 cents, or 1%, at $48.01 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 86 cents, or 1.7%, to $48.97 a barrel on ICE Futures Europe. The market has been taking sharp losses since Friday when oil-field services company Baker Hughes Inc. said the number of rigs drilling for oil in the U.S. rose for a second-straight week. On Monday and Tuesday, data provider Genscape and the industry group American Petroleum Institute also suggested stockpiles are growing. On Wednesday, analysts at Goldman Sachs Group Inc. called the recent recovery in oil "fragile." Prices had been up as much as 95% in four months as of last week, boosted in large part by fires in Canada and strife in Africa that has shut down oil production and pipelines. But that may not be enough to ultimately drain stockpiles that grew to historic heights in recent years. "Outside of these disruptions, the rationalization of the oil market's surplus remains nascent at best," the Goldman analysts said in a note. Canadian production is already restarting and other major exporters keep producing more than expected, they added. And the recent rise in prices -- from below $30 a barrel all the way back up above $50--makes it likely that production cuts will fall short of expectations, especially in the U.S., they added. There would have to be further disruptions, maybe in Nigeria or Venezuela, to move U.S. prices sustainably above $49 a barrel in the next three months, the bank said. The market's current path is likely to bring a surplus back by early 2017. That has been a widespread concern as many shale-drilling oil companies in the U.S. have lowered costs and showed a willingness to drill more wells at current prices. Apache Corp., for example, based its budget this year on U.S. oil prices of $35 a barrel, so it is "not unreasonable" to think the company could add five rigs in the Permian basin with oil now near $50, analysts at Piper Jaffray Cos.' Simmons & Co. International said in a note Wednesday. Geopolitical factors around the world are also blunting the effect of the EIA report, a broker and analysts said. Market volatility has spiked, central banks are meeting this week, the dollar has been on the rise for the better part of a week and the U.K. has a coming referendum on leaving the European Union. That has investors wary and heading to the sidelines. Many have been bullish on oil and closing out means selling, lowering prices, said Scott Shelton, broker at ICAP PLC. "When you see moves like that, people start taking down risk," he added. Gasoline futures fell 1.99 cents, or 1.3%, to $1.5014 a gallon, a one-month low after five-straight losing sessions. Diesel futures also fell for a fifth-straight session--their longest losing streak since January--down 2.42 cents, or 1.6%, to $1.4778 a gallon. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Petroleum production; Oil service industry; Crude oil
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796452819
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Petronas Asks Banks for $7.2 Billion Loan Proposals for Project -- Source; Malaysia's national oil company is asking banks to submit proposals for a bridge loan of up to $7.2 billion to be used to fund its $16 billion refinery project.
Author: Ngui, Yantoultra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 June 2016: n/a.
Abstract: None available.
Full text: KUALA LUMPUR, Malaysia-Malaysia's national oil company, Petroliam Nasional Bhd, is asking banks to submit proposals for a two-year bridge loan of up to $7.2 billion to be used to fund its $16 billion refinery and petrochemical integrated development project in the southern state of Johor, a person familiar with the matter said on Wednesday. The loan comes as Petronas, Malaysia's only Fortune 500 company, has been hit by the global slump in oil prices. The company said in January that it would cut its spending by some $11.4 billion over the next four years. The unlisted firm, which accounts for most of the Malaysian government's oil and gas revenue, subsequently announced in March that it was also cutting 1,000 jobs as it navigates the weaker oil-prices environment. Petronas has given banks until end of the month to submit the proposals, according to the person familiar with the matter. A Petronas spokesman didn't immediately reply to a request for comment. The RAPID project is one of the cornerstones of Malaysian Prime Minister Najib Razak's Economic Transformation Program aimed at doubling Malaysians' incomes by 2020. The project is one of the largest single investments in Malaysia, and aims to grab a chunk of the more than $400 billion global market for specialty chemicals used in products from diapers to LCD televisions. Credit: By Yantoultra Ngui
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 15, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796692620
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
U.S. Producer Prices Climbed, Boosted by Pricier Energy; May's 0.4% increase indicates damping effect of cheap oil on overall inflation is fading
Author: Leubsdorf, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 June 2016: n/a.
Abstract:
Overall price growth has undershot the Fed's 2% annual target for the past four years by the central bank's preferred measure, the Commerce Department's personal-consumption expenditures price index.
Full text: WASHINGTON--Rising energy prices are starting to put upward pressure on U.S. inflation after a long stretch of broadly sluggish price growth. The producer-price index for final demand, which measures changes in the prices that U.S. firms receive for goods and services, increased a seasonally adjusted 0.4% in May from the prior month after rising 0.2% in April, the Labor Department said. Economists surveyed by The Wall Street Journal had expected a 0.3% increase. The headline reading in Wednesday's report "was boosted by hefty rebounds in gasoline and fuel oil prices, but we think both need to rise further to come fully into line with market prices," Pantheon Macroeconomics chief economist Ian Shepherdson said in a note to clients. Global oil prices have climbed in recent months after a steep, sustained decline that began in 2014. The effects are starting to show up at gasoline stations and in broad measures of U.S. inflation. Last month's jump in the PPI was concentrated in energy goods, with prices surging 2.8% from April, and in trade services, which saw a 1.2% increase in May. The trade-services category measures margins received by wholesalers and retailers and can be volatile from month to month. To be sure, underlying inflationary pressures still appear tame. Prices fell 0.1% in May when excluding food, energy and trade services, which partly reversed April's 0.3% rise in the category. Compared with a year earlier, overall prices fell 0.1% in May after a flat annual reading in April. Prices excluding food and energy were up 1.2% on the year. Prices excluding food, energy and trade services rose 0.8% from May 2015. "Through the volatility, the core data are not showing much change in trends," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics, in a note to clients. Even before oil prices fell, U.S. inflation was subdued in the wake of the 2007-2009 recession. There are now signs of firming price and wage growth as oil prices move higher and the labor market tightens. At the same time, there has been slippage in some measures of expectations for future inflation that are closely watched by Federal Reserve officials. "I expect to see inflation moving up to 2% over the next couple of years," Fed Chairwoman Janet Yellen said in a speec h last week. But, she added, "If inflation expectations really are moving lower, that could call into question whether inflation will move back to 2% as quickly as I expect." Overall price growth has undershot the Fed's 2% annual target for the past four years by the central bank's preferred measure, the Commerce Department's personal-consumption expenditures price index. The Labor Department on Thursday will release another closely watched gauge of U.S. inflation, the consumer-price index. Economists surveyed by the Journal expect the CPI rose 0.3% in May from the prior month and that prices excluding food and energy rose 0.2% from April. Write to Ben Leubsdorf at ben.leubsdorf@wsj.com Credit: By Ben Leubsdorf
Subject: Inflation; Food; Consumer Price Index; Fuel oil prices
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 15, 2016
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796692767
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
North Dakota Suffers Record Drop in Monthly Crude-Oil Production; April's output declines by 70,414 barrels a day
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 June 2016: n/a.
Abstract:
The sharp drop in output reflects a steep downturn in crude prices, which has cut into profit margins from wells in the Bakken Shale, a formation centered in North Dakota where extraction costs are higher than in many other oil fields.
Full text: North Dakota's crude-oil production fell by the largest amount ever for a single month, sinking 6.3% in April. The sharp drop in output reflects a steep downturn in crude prices, which has cut into profit margins from wells in the Bakken Shale, a formation centered in North Dakota where extraction costs are higher than in many other oil fields. Production of crude in the state fell to 1.04 million barrels a day in April, down from a revised 1.11 million barrels a day in March, according to the latest data from the North Dakota Department of Mineral Resources. That 70,414 barrel a day monthly decline dwarfed a previous record of about a 50,000 barrel a day fall in December 2013 and marks the lowest output level for the state since May 2014. "We were expecting a large production drop and it arrived," Lynn Helms, Director of the Department of Mineral Resources, said at a press conference in Bismarck. "It was the one we were kind of waiting for as we saw rig count drop below 30," he said. There are 28 drilling rigs, a barometer of future production, currently active in the state, up from 27 in May which was the fewest since July 2005. At its peak, North Dakota had 218 rigs drilling in May 2012. Mr. Helms said oil production levels may drop below the one million barrel a day mark before the end of the year if prices remain below $50 a barrel. However, output could stabilize or even rise slightly this summer with prices of $50 a barrel or higher, he said. Output totaled 31.2 million barrels of oil in April, the latest data available, compared with 34.5 million barrels in March, the state said. Natural-gas production in North Dakota fell 5.5% in April to 1.62 billion cubic feet a day, according to state data. Operators burned off, or flared, about 9.2% of the natural-gas produced in March, down from a high of 36% in September 2011. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Petroleum production; Mineral resources; Price increases
Location: North Dakota
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 15, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796800976
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Exxon Seeking Injunction Against Climate-Change Investigation; Oil company want to block a Massachusetts subpoena seeking documents dating back 40 years
Author: Olson, Bradley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 June 2016: n/a.
Abstract:
In its Wednesday filing, Exxon said the probes are "the culmination of years of planning," referring to a 2012 meeting in which environmental activists discussed a strategy that included using the subpoena power of attorneys general to obtain records of fossil fuel companies.
Full text: Exxon Mobil Corp. is seeking an injunction against the Massachusetts attorney general, alleging that a wide-ranging investigation into the oil company is politically motivated and violates its constitutional rights. Exxon, based in Irving, Texas, wants to block a Massachusetts subpoena that sought documents relating to climate change science research and investor communications on the topic dating back 40 years. The company filed its motion on Wednesday in a federal court in the Northern District of Texas in Fort Worth. New York Attorney General Eric Schneiderman, Massachusetts Attorney General Maura Healey and U.S. Virgin Islands Attorney General Claude Walker are all investigating whether Exxon misrepresented its understanding of climate change to investors and the public. The company already has turned over hundreds of thousands of pages of documents to Mr. Schneiderman. Related * Exxon Fires Back at Climate-Change Probe Exxon, in its court filing, called Ms. Healey's allegations "nothing more than a weak pretext for an unlawful exercise of government power to further political objectives." Exxon also said that the subpoena violates its right to free speech, Fourth Amendment protection against unreasonable search and seizure and the 14th Amendment's equal protection clause. "Our investigation is based, not on speculation, but on inconsistencies about climate change in Exxon documents which have been made public," Ms. Healey's office said. The 33-page injunction filing is the company's most sharply worded rebuttal so far to investigations launched last year into what Exxon has known about climate change since the 1970s. Republican lawmakers have criticized the probes into Exxon by Democratic state attorneys general, a development that shows the degree to which the matter has become political football. The initial probe began last year when Mr. Schneiderman subpoenaed Exxon. It took on renewed urgency in March when he, Ms. Healey and Mr. Walker joined former Vice President Al Gore and several state representatives gathered to discuss their work to examine the company's record. In its Wednesday filing, Exxon said the probes are "the culmination of years of planning," referring to a 2012 meeting in which environmental activists discussed a strategy that included using the subpoena power of attorneys general to obtain records of fossil fuel companies. Participants in the legal gathering, which took place in La Jolla, Calif., also discussed how such documents could pave the way for litigation akin to that leveled successfully against tobacco companies for their role in researching and misconstruing the risks of smoking. Exxon and its supporters dismiss the comparison with tobacco. Write to Bradley Olson at Bradley.Olson@wsj.com Credit: By Bradley Olson
Subject: Attorneys general; Climate change; Injunctions; Subpoenas
Location: Texas Massachusetts Fort Worth Texas New York
People: Gore, Albert Jr
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 15, 2016
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796859076
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796859076?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Saudi Prince Visits U.S. to Improve Kingdom's Image; Deputy Crown Prince Mohammed bin Salman seeks support for a plan to wean the kingdom's economy off dependence on oil revenues
Author: Schwartz, Felicia; Stancati, Margherita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 June 2016: n/a.
Abstract:
Prince Mohammed's visit to New York is likely to include meetings at the United Nations, where Secretary-General Ban Ki-moon acknowledged publicly that the Saudis had pressured officials there into editing a U.N.-prepared list of militaries that kill and injure children to omit the Saudi-led coalition in Yemen.
Full text: WASHINGTON--Saudi Arabia's Deputy Crown Prince, Mohammed bin Salman, is in the U.S. this week on a charm offensive to promote his country's new plans for economic engagement and its foreign policy, a visit that comes during a year marked by fraying U.S.-Saudi tensions. A key focus for the visit will be the kingdom's public image, which has suffered this year as a Saudi-led military campaign in Yemen has dragged on and as Obama administration officials have been more vocal in their critiques of the longtime U.S. ally. Prince Mohammed met with Secretary of State John Kerry on Monday and has plans to meet with Defense Secretary Ash Carter and other senior administration officials before he heads to Silicon Valley and New York, primarily for business engagements. The White House has yet to say whether Prince Mohammed will meet with President Barack Obama while he's in Washington, though Saudi officials expect it will happen Friday. In meetings on Capitol Hill Wednesday, Prince Mohammed focused on the Middle East, including Yemen, Iran, Syria and Iraq, according to lawmakers and aides. Sen. Tom Cotton (R., Ark.), who along with the Senate Armed Services Committee met with Prince Mohammed, said the meeting was "a productive and open exchange." "Our main focus was our mutual security interests, including counterterrorism efforts against al-Qaeda and the Islamic State and the threat posed by Iran's aggression in Syria, Iraq, Yemen, and the broader Middle East," Mr. Cotton said. Prince Mohammed's visit to New York is likely to include meetings at the United Nations, where Secretary-General Ban Ki-moon acknowledged publicly that the Saudis had pressured officials there into editing a U.N.-prepared list of militaries that kill and injure children to omit the Saudi-led coalition in Yemen. A renewed debate in the U.S. about whether Riyadh played any role in the attacks of Sept. 11, 2001, has also put a strain on relations. Saudi officials are expected to address the expected declassification of portions of a congressional report, in which 28 pages reportedly address Saudi Arabia's posture regarding the hijackers in the terrorist attacks. A bill passed by the Senate would allow victims of the 2001 attacks to sue Saudi Arabia over its possible role. The White House has threatened to veto the legislation, and Saudi Arabia strenuously denies any role in the 2001 attacks. "Saudi Arabia is perceived as a partner whose values the broader American public doesn't share," said Andrew Bowen, a researcher with the Washington-based National Council on U.S.-Arab Relations. "It's going to take more than just this visit to overcome the sour populist mood in the U.S." Prince Mohammed and other Saudi officials visiting the U.S. this week and next are eager to convince people on Wall Street, in Silicon Valley and in Congress that its new economic plan is worth supporting. Riyadh revealed plans in April to free Saudi Arabia from its dependence on oil revenues, in part by selling a stake in its state-owned oil company and creating the world's largest sovereign-wealth fund. The project, Prince Mohammed's brainchild, is called "Saudi Vision 2030." "No one is going to say at this stage if this is going to work because they all want a slice of the action--if they don't say nice things, they won't be included," said Simon Henderson, an expert on Saudi Arabia at the Washington Institute for Near East Policy. Prince Mohammed has become one of the most powerful figures in Saudi Arabia, and oversees the important defense and economic portfolios. "It looks like he's going to be king of Saudi Arabia and the U.S. will have to live with that," said Mr. Henderson. Corrections & Amplifications: The House hasn't voted yet on a bill that would allow victims of the 2001 terror attacks to sue Saudi Arabia over its possible role. An earlier version of this article incorrectly said both the Senate and House had passed the bill. (June 20, 2016) Write to Felicia Schwartz at Felicia.Schwartz@wsj.com and Margherita Stancati at margherita.stancati@wsj.com Credit: By Felicia Schwartz and Margherita Stancati
Subject: Presidents; Bills
Location: United States--US Iran Iraq Yemen Syria Saudi Arabia Middle East New York
People: Obama, Barack Ban Ki Moon Mohamed bin Salman, Prince of Saudi Arabia Cotton, Tom Carter, Ashton Kerry, John F
Company / organization: Name: United Nations--UN; NAICS: 928120; Name: Senate-Armed Services, Committee on; NAICS: 921120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 15, 2016
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796922414
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Falls for the Sixth Day on U.S. Oil Data, Brexit Risk; Brent crude exchange fell $0.34 to $48.63 a barrel
Author: Hsu, Jenny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 June 2016: n/a.
Abstract:
"While the outlook for global oil fundamentals remains constructive, with slight global crude and product draws expected in the second half of this year, the current mood in the oil markets is risk averse, and the U.S. weekly report did not do anything to change that," say analysts at Societe Generale.
Full text: Crude oil futures fell for six straight sessions in early Asia trade day Thursday, dragged by a somewhat disappointing U.S. oil data and looming risk of Britain's departure from the European Union. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $47.55 a barrel at 0229 GMT, down $0.46 in the Globex electronic session. August Brent crude on London's ICE Futures exchange fell $0.34 to $48.63 a barrel. Global oil prices have been on a downward streak for days, first pushed down by the prospect that the decline in U.S. shale production since April last year could be reversing as rig counts rise. In the week ended June 10, U.S. crude stockpiles shrank less than expected, decreasing 933,000 barrels. Stockpiles also grew by 525,000 barrels at the key crude delivery hub of Cushing, Okla. However, production fell by 29,000 barrels to 8.72 million barrels a day. "While the outlook for global oil fundamentals remains constructive, with slight global crude and product draws expected in the second half of this year, the current mood in the oil markets is risk averse, and the US weekly report did not do anything to change that," say analysts at Société Générale. The apprehension among investors is that as prices climb, more U.S. producers will be lured to drill new wells or complete the ones that were half-way developed before the price plunge. Apache Corp., for example, based its budget this year on U.S. oil prices of $35 a barrel, so it is "not unreasonable" to think the company could add five rigs in the Permian basin with oil now near $50, analysts at energy-focused investment bank Simmons & Co. International, part of Piper Jaffray Cos., said in a note Wednesday. Prices have also been stunted by nervousness regarding the June 23 British referendum on leaving the EU which has buoyed the greenback, making it less profitable for oil traders using foreign currencies as oil is pegged to the dollar. "Risk aversion continues to stay on the table, even as the Federal Open Market Committee votes to leave interest rates unchanged at 0.5%," said Barnabas Gan, an economist at Singapore bank OCBC. Some analysts say that while keeping interest rates flat may provide some support to commodities prices, the dovish action can also be interpreted as a sign that the Fed is becoming more cautious about U.S. economic growth. Oil investors will be keeping a close eye on the U.S. rig count report by Baker Hughes Inc. tomorrow. Data by the industry group has showed an uptick in U.S. oil drilling activity for the last two weeks. "For now, the fundamentals of the oil market will remain as the primary price movers. The fact is the world still has too much oil," said Gao Jian, an energy analyst at SCI International. Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 51 points to $1.4963 a gallon, while July diesel traded at $1.4691, 87 points lower. ICE gasoil for July changed hands at $435.00 a metric ton, down $6.00 from Wednesday's settlement. --Timothy Puko contributed to this article. Write to Jenny Hsu at jenny.hsu@wsj.com Credit: By Jenny Hsu
Subject: International markets
Location: United States--US
Company / organization: Name: Societe Generale; NAICS: 522110, 522120, 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 16, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1796981026
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1796981026?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Business News: Exxon Seeks to Block State's Order for Files
Author: Olson, Bradley
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 June 2016: B.4.
Abstract:
Exxon said the probes are "the culmination of years of planning," referring to a 2012 meeting in which environmental activists discussed using the subpoena power of attorneys general to obtain records.
Full text: Exxon Mobil Corp. is seeking an injunction against the Massachusetts attorney general, alleging that a wide-ranging investigation into the oil company is politically motivated and violates its constitutional rights. Exxon, based in Irving, Texas, wants to block a Massachusetts subpoena that sought documents relating to climate change science research and investor communications on the topic dating back 40 years. The company filed its motion on Wednesday in a federal court in the Northern District of Texas in Fort Worth. New York Attorney General Eric Schneiderman, Massachusetts Attorney General Maura Healey and U.S. Virgin Islands Attorney General Claude Walker are all investigating whether Exxon misrepresented its understanding of climate change to investors and the public. The company already has turned over hundreds of thousands of pages of documents to Mr. Schneiderman. Exxon, in its court filing, called Ms. Healey's allegations "nothing more than a weak pretext for an unlawful exercise of government power to further political objectives." Exxon also said that the subpoena violates its right to free speech, Fourth Amendment protection against unreasonable search and seizure and the 14th Amendment's equal protection clause. "Our investigation is based, not on speculation, but on inconsistencies about climate change in Exxon documents," Ms. Healey's office said. The 33-page injunction filing is the company's most sharply worded rebuttal so far to investigations launched last year into what Exxon has known about climate change since the 1970s. Republican lawmakers have criticized the probes by Democratic state attorneys general, a development that shows the degree to which the matter has become political football. Exxon said the probes are "the culmination of years of planning," referring to a 2012 meeting in which environmental activists discussed using the subpoena power of attorneys general to obtain records. Credit: By Bradley Olson
Subject: Climate change; Supreme Court decisions
Location: Massachusetts
People: Healey, Maura T
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2016
Publication date: Jun 16, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1797030278
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1797030278?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Finance: Nigeria Will Allow Its Currency to Float --- Central-bank chief to remove peg to dollar as nation battles the effect of low oil prices
Author: Akingbule, Gbenga; McGroarty, Patrick
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 June 2016: C.3.
Abstract:
A weaker currency could force the central bank to raise interest rates in a bid to fight inflation, a move that could weigh on investment and hurt domestic corporations.
Full text: ABUJA, Nigeria -- Nigeria's central bank abandoned a currency peg that economists and businesses had long blamed for exacerbating a slide toward recession in Africa's largest economy. Central Bank of Nigeria Gov. Godwin Emefiele said Wednesday that the country's naira currency will trade at a market-determined rate beginning Monday, rather than the 197-per-U.S.-dollar level the bank has mandated for more than a year. The black-market exchange rate has shot to about 370 naira to the dollar after the central bank choked off most legal channels for procuring greenbacks. Nigeria's currency has been under pressure since late 2014, when oil prices began the precipitous slide that has upended the country and other commodity-reliant economies from Saudi Arabia to Venezuela. Nigeria has been hit harder than most. The country recently ceded its longtime title as the continent's top crude producer to Angola as a result of militant attacks on pipelines and rigs in the Niger Delta. The violence is motivated in part by complaints that President Muhammadu Buhari isn't living up to the campaign pledges he made ahead of his unexpected victory last year to clean up Nigeria's rampant corruption and create jobs for a largely impoverished population of some 180 million. The global commodity crash hasn't made Mr. Buhari's job any easier. Plunging oil sales have yanked Nigeria's foreign-exchange earnings below $1 billion monthly from $3.2 billion a month in 2014, Mr. Emefiele said Wednesday. The economy contracted 0.4% in the first quarter, and inflation in May spiked to nearly 16% annually. A weaker currency could force the central bank to raise interest rates in a bid to fight inflation, a move that could weigh on investment and hurt domestic corporations. Also, many emerging-market countries have substantial dollar-denominated debt, and a stronger dollar could make it harder for them to service those obligations. Economists have long argued that holding the naira's value unnaturally high was only making critical imports like fuel and food even more scarce. "I'm surprised it lasted as long as it did," John Ashbourne, Africa economist at Capital Economics, said of the peg. "They've been pretty stoic in the face of a lot of criticism." Mr. Emefiele defended a campaign that has consumed nearly half of the $43 billion in foreign-exchange reserves the bank held two years ago. He said he would continue to intervene in markets to defend the naira's value "as the need arises." "The [central bank] will not allow the system to be undermined by speculators and rent-seekers," he said. Meanwhile, on Tuesday, index provider MSCI Inc. said it would speed up its decision on whether to remove Nigeria from its frontier-markets index in light of sharp declines in foreign-exchange reserves that have made it difficult for international investors to repatriate capital from the country. In September, Nigeria was removed from J.P. Morgan Chase & Co.'s emerging-market bond index, triggering billions in redemptions from bondholders. "The investability of the Nigerian equity market is being questioned," MSCI said, a sentiment that reflects broader questions among investors about the long-presumed inevitability of Africa's economic rise. Nigeria is the latest emerging market to struggle with foreign-exchange shortages, exacerbated by a strong dollar and, in some cases, falling commodity prices. Egypt's central bank devalued its currency in March, and said it would adopt a more flexible exchange-rate policy as it seeks to ease an acute dollar shortage that is hurting the economy. --- Ira Iosebashvili and Julie Wernau contributed to this article. Credit: By Gbenga Akingbule and Patrick McGroarty
Subject: Central banks; Commodities; Float; Foreign exchange controls; Economic conditions
Location: United States--US Nigeria
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2016
Publication date: Jun 16, 2016
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1797030293
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Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-23
Database: The Wall Street Journal
Oil Prices Fall to One-Month Low; Concerns about the U.K. referendum and possible rise in U.S. oil production trigger largest one-day price loss since April
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 June 2016: n/a.
Abstract:
Crude prices have fallen for six straight days, as traders assessed global economic uncertainty and the prospect that U.S. oil production could start rising again.
Full text: U.S. oil prices on Thursday posted their largest one-day loss since April, dragged down by market jitters over the looming U.K referendum. Crude prices have fallen for six straight days, as traders assessed global economic uncertainty and the prospect that U.S. oil production could start rising again. U.S. crude for July delivery settled down $1.80, or 3.7%, to $46.21 a barrel on the New York Mercantile Exchange, the lowest settlement since May 13. Brent, the global benchmark, fell $1.78, or 3.6%, to $47.19 a barrel on ICE Futures Europe, the lowest level since May 10. Oil has fallen alongside global stocks, which have sold off in recent days amid fears that a British vote to exit the European Union will disrupt financial markets and the economy. U.S. stocks fell early Thursday but pared losses later in the day. "I don't think it's any coincidence that you see both energy down ...and equities down," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "It's a 'risk-off' environment that we're operating under globally." Investors also are assessing whether U.S. oil production, which has declined for about a year, is set to start rising again. Output has fallen from its April 2015 peak as low oil prices forced producers to cut spending on new drilling. But U.S. prices have rallied more than 75% from their February lows, and the number of rigs drilling for oil has risen for two straight weeks. The U.S. Energy Information Administration said Wednesday domestic crude stockpiles shrank less than expected, decreasing by 900,000 barrels. Stockpiles also grew by 900,000 barrels at the key crude delivery hub of Cushing, Okla. Production fell by 29,000 barrels to 8.72 million barrels a day, the EIA said. It had risen the previous week. Gasoline futures settled down 3.61 cents, or 2.4%, to $1.4653 a gallon. Diesel futures fell 5.49 cents, or 3.7%, to $1.4229 a gallon. Georgi Kantchev and Jenny W. Hsu contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: International finance; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2016
Publication date: Jun 16, 2016
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1797124979
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1797124979?accountid=7117
Copyright: (c) 2016 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
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